Matthews International Announces Positive Ruling in Arbitration with Tesla

Rhea-AI Summary

Matthews International (MATW) received a favorable arbitration ruling against Tesla on February 5, 2025, confirming the company's right to sell its proprietary Dry Battery Electrode (DBE) technology to other customers in the electric vehicle market. The decision acknowledged Matthews' extensive pre-Tesla experience in manufacturing DBE technology.

The dispute began over a year ago when Matthews sought a declaratory judgment through arbitration regarding its rights to sell DBE solutions. Tesla subsequently filed federal court litigation alleging trade secret theft. Matthews was recently awarded U.S. Patent No. 12,136,727 B2 for DBE manufacturing systems on November 5, 2024.

CEO Joseph C. Bartolacci emphasized that this ruling validates their rights to the technology and their decade-long experience in the battery space. The company plans to immediately resume marketing and delivering DBE products to battery and automobile manufacturers globally.

Positive

• Favorable arbitration ruling allows MATW to sell DBE technology to other customers
• Recently awarded U.S. Patent No. 12,136,727 B2 for DBE manufacturing systems
• Can immediately resume marketing and sales in the growing EV market

Negative

• Ongoing legal dispute with Tesla could impact business relationships
• Facing trade secret theft allegations in federal court

Insights

Legal & IP Expert

The arbitration ruling represents a significant legal and commercial victory for Matthews International, with far-reaching implications for the EV battery technology market. The decision effectively removes a major obstacle to Matthews' market expansion and validates their intellectual property position in the important DBE technology space.

The timing of this ruling, combined with Matthews' recently granted patent (No. 12,136,727 B2), creates a powerful strategic advantage. The patent's focus on DBE manufacturing systems positions Matthews to capitalize on the rapidly growing demand for advanced battery technologies in the EV sector. This is particularly significant as global automakers and battery manufacturers seek to improve production efficiency and reduce costs.

From a competitive standpoint, this ruling establishes Matthews as a credible independent player in the DBE technology space, separate from Tesla's influence. The freedom to market and sell their technology to other customers could potentially unlock substantial revenue streams, especially given the increasing adoption of electric vehicles globally and the push for more efficient battery production methods.

The resolution of this dispute through arbitration, despite Tesla's attempt to pursue federal court litigation, also demonstrates the strength of Matthews' legal position and contract enforcement. This outcome likely enhances Matthews' negotiating position with future partners and customers, while potentially increasing the company's enterprise value through validated intellectual property rights.

Market Research Analyst

This ruling strategically positions Matthews to capture a larger share of the expanding DBE market, which is important for next-generation EV batteries. The company's validated technology and newly affirmed market access rights create multiple revenue opportunities across the global EV supply chain.

The DBE technology is particularly valuable because it can potentially reduce battery production costs by eliminating the need for solvents and drying processes, while improving energy density and performance. These advantages make Matthews' solutions attractive to both established automakers and emerging EV manufacturers seeking to optimize their battery production capabilities.

The market timing is optimal, as global EV battery manufacturing capacity is projected to grow significantly over the next decade. Matthews' ability to freely market their technology could lead to multiple high-value contracts with major battery manufacturers and automakers, potentially transforming their revenue model from a single-customer relationship to a diverse portfolio of clients.

This development could trigger a re-evaluation of Matthews' market position, as their addressable market has effectively expanded overnight. The combination of their patent protection and validated technology creates a strong competitive moat, potentially leading to premium pricing power for their DBE solutions.

Arbitrator affirms Matthews’ right to continue selling its proprietary Dry Battery Electrode technology to other customers

PITTSBURGH, Feb. 06, 2025 (GLOBE NEWSWIRE) -- Matthews International Corporation (Nasdaq GSM: MATW) (“Matthews” or “the Company”) today provided an update on the ongoing business dispute involving Tesla.

On February 5, 2025, an arbitrator issued a decision on an arbitration demand filed by Matthews against Tesla in January 2024. This ruling acknowledged Matthews’ extensive, pre-Tesla background in manufacturing advanced Dry Battery Electrode (“DBE”) technology and affirmed that the Company has the right to sell its solutions to customers other than Tesla. Matthews intends to immediately resume marketing, selling and delivering its DBE products to other customers in the growing electric vehicle market, where battery and automobile equipment manufacturers from around the world seek to adopt Matthews’ innovative solutions.

“This ruling confirms our rights in this groundbreaking technology and re-establishes what we have been saying for years – that we have valuable solutions to support the advancement of dry battery electrode technology,” said Joseph C. Bartolacci, President and Chief Executive Officer. “Matthews has been working in the battery space for over a decade, and we look forward to realizing the value of our DBE solutions and related intellectual property and continuing to innovate within the space.”

On November 5, 2024, Matthews was awarded U.S. Patent No. 12,136,727 B2 entitled Systems for Manufacturing a Dry Electrode, and Matthews expects this foundational work to lead to further innovations and developments to support the expanding DBE industry.

Background to the Dispute

After exhausting efforts to negotiate a resolution to a dispute with its DBE customer Tesla that arose over a year ago, Matthews was forced to seek a declaratory judgment in a binding arbitration regarding Matthews’ rights to continue selling its innovative DBE solutions to others. While this arbitration was ongoing, Tesla initiated duplicative litigation in federal court, vaguely alleging that Matthews had stolen Tesla’s trade secrets, notwithstanding its agreement to arbitrate all such disputes.

Given Tesla’s decision to file a public action against Matthews in June of 2024 and in light of the importance of the arbitrator’s ruling, Matthews is compelled to update the market on this matter.

About Matthews International Corporation

Matthews International Corporation is a global provider of industrial technologies, memorialization products and brand solutions. The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, décor and tissue industries. The Memorialization segment is a leading provider of memorialization products, including memorials, caskets, cremation-related products, and cremation and incineration equipment, primarily to cemetery and funeral home customers that help families move from grief to remembrance. The SGK Brand Solutions segment is a leading provider of packaging solutions and brand experiences, helping companies simplify their marketing, amplify their brands and provide value. The Company has approximately 12,000 employees in more than 30 countries on six continents that are committed to delivering the highest quality products and services.

Forward-Looking Statements
Any forward-looking statements contained in this release are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the proposed joint venture transaction, and may be identified by the use of words such as “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from management’s expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company’s results to differ materially from the results discussed in such forward-looking statements principally include the possibility that the terms of the final award to be issued by the Arbitrator in the Tesla dispute may differ from the terms of the interim award issued by the Arbitrator and may be challenged, our ability to satisfy the conditions precedent to the consummation of the proposed joint venture transaction on the expected timeline or at all, our ability to achieve the anticipated benefits of the proposed joint venture transaction, uncertainties regarding future actions that may be taken by Barington in furtherance of its intention to nominate director candidates for election at the Company’s 2025 Annual Meeting, potential operational disruption caused by Barington’s actions that may make it more difficult to maintain relationships with customers, employees or partners, changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company’s products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company’s acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company’s internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company’s control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, the Company’s plans and expectations with respect to its exploration, and contemplated execution, of various strategies with respect to its portfolio of businesses, the Company’s plans and expectations with respect to its Board, and other factors described in the Company’s Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.

Additional Information
In connection with the Company’s 2025 Annual Meeting, the Company has filed with the U.S. Securities and Exchange Commission (“SEC”) and commenced mailing to the shareholders of record entitled to vote at the 2025 Annual Meeting a definitive proxy statement and other documents, including a WHITE proxy card. SHAREHOLDERS ARE ENCOURAGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED BY THE COMPANY AND ALL OTHER RELEVANT DOCUMENTS WHEN FILED WITH THE SEC AND WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Investors and other interested parties will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov, or from the Company at its website: http://www.matw.com/investors/sec-filings. You may also obtain copies of the Company’s definitive proxy statement and other documents, free of charge, by contacting the Company’s Investor Relations Department at Matthews International Corporation, Two NorthShore Center, Pittsburgh, Pennsylvania 15212-5851, Attention: Investor Relations, telephone (412) 442-8200.

Participants in the Solicitation
The participants in the solicitation of proxies in connection with the 2025 Annual Meeting are the Company, Alvaro Garcia-Tunon, Gregory S. Babe, Joseph C. Bartolacci, Katherine E. Dietze, Terry L. Dunlap, Lillian D. Etzkorn, Morgan K. O’Brien, J. Michael Nauman, Aleta W. Richards, David A. Schawk, Jerry R. Whitaker, Francis S. Wlodarczyk, Steven F. Nicola and Brian D. Walters. Certain information about the compensation of the Company’s named executive officers and non-employee directors and the participants’ holdings of the Company’s Common Stock is set forth in the sections entitled “Compensation of Directors” (on page 36 and available here), “Stock Ownership of Certain Beneficial Owners and Management” (on page 64 and available here), “Executive Compensation and Retirement Benefits” (on page 66 and available here), and “Appendix A” (on page A-1 and available here), respectively, in the Company’s definitive proxy statement, dated January 7, 2025, for its 2025 Annual Meeting as filed with the SEC on Schedule 14A, available here. Additional information regarding the interests of these participants in the solicitation of proxies in respect of the 2025 Annual Meeting and other relevant materials will be filed with the SEC when they become available. These documents are or will be available free of charge at the SEC’s website at www.sec.gov.

Matthews International Corporation
Corporate Office
Two NorthShore Center
Pittsburgh, PA 15212-5851
Phone: (412) 442-8200

Contacts
Matthews International Co.
Steven F. Nicola
Chief Financial Officer and Secretary
(412) 442-8262

Collected Strategies
Dan Moore / Scott Bisang / Clayton Erwin
MATW-CS@Collectedstrategies.com

FAQ

What was the outcome of MATW's arbitration with Tesla on February 5, 2025?

The arbitrator ruled in Matthews International's favor, confirming their right to sell Dry Battery Electrode technology to customers other than Tesla.

What patent did MATW receive for its DBE technology in November 2024?

Matthews was awarded U.S. Patent No. 12,136,727 B2 for Systems for Manufacturing a Dry Electrode on November 5, 2024.

How will the arbitration ruling impact MATW's business operations?

The ruling allows Matthews to immediately resume marketing, selling, and delivering its DBE products to battery and automobile manufacturers in the global electric vehicle market.

What legal challenges is MATW facing from Tesla as of 2024?

Tesla initiated federal court litigation in June 2024, alleging that Matthews had stolen Tesla's trade secrets, despite an agreement to arbitrate such disputes.