Czech Nuclear Power Plant Bidding Conditions ‘Third-Party License Granting Rights’ Westinghouse ‘No Korea’

Czech Nuclear Power Plant Bidding Conditions ‘Third-Party License Granting Rights’ Westinghouse ‘No Korea’

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The issue at the Czech Nuclear Power Plant is whether Korea violated the clause ‘Third-Party License Granting Rights’, which is a bidding condition, and Korean media outlets began reporting that ‘the rights were purchased for 40 billion won’, but avoided making a judgment on the right to grant licenses for core technologies.

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The Kookmin Ilbo reported on the 24th that <Korea Hydro & Nuclear Power purchased the rights (License Agreement) from Westinghouse in 1997 for a large sum of money. According to this, Korea is allowed to export nuclear power plants to countries ‘except for the American continent’. According to the confirmation by KHNP on this day, the rights contracted at that time are still valid>, and <Professor Jeong Beom-jin of the Department of Nuclear Engineering at Kyunghee University, who is the president of the Korean Nuclear Society, said, “How can there be an IP issue when Hanwha purchased the rights for about 40 billion won?” and “If Westinghouse was confident, they would have filed a lawsuit regarding the IP, but they did not do so and are only engaging in a public opinion war.”

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On the 27th of last month, ‘International Nuclear News (WNN)’ reported in an article titled <Appeal of the Czech Nuclear Bidding Process> that <Westinghouse issued a statement and stated that it filed an appeal because “the bidding required suppliers to prove that they have the right to transfer and sublicense the nuclear technology proposed in the bidding to CEZ and local suppliers.”> and that <KHNP’s APR1000 and APR1400 plant designs utilize Westinghouse-licensed Generation II System 80 technology. KHNP does not own the underlying technology without Westinghouse’s consent and has no right to sublicense to third parties. It also reported that “only Westinghouse has the legal right to obtain the necessary approval from the U.S. government to export the technology.”> and completely separated the licensed technology usage fee from the ‘right to grant third-party licenses.’ ‘WNN’ then reported that <Westinghouse and KHNP are in an ongoing dispute over intellectual property rights, which is subject to international arbitration, and Westinghouse stated that the process is not expected to be concluded before the second half of 2025> and <Reuters reported that KHNP stated that it will “sufficiently respond to the dispute with Westinghouse to avoid negative impacts on the Czech nuclear power project.”>

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Regarding the Export Control Act, ‘Kookmin Ilbo’ reported that <It is true that it is a procedure that must be followed from Korea’s perspective. This is because it is ‘technology transferred’ from the US to Korea> and <However, it does not require ‘approval’ as reported by some media outlets. In reality, exporting Korean nuclear power plants to the Czech Republic is subject to ‘reporting.’ However, the reporting entity must be an American> and reported it as a ‘procedural violation.’

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The Kukmin Ilbo concluded that it was not a dump, stating, “The situation has changed compared to when it was exported to the UAE,” and “At the time of the export to the UAE, the three core technologies were not domestically produced, so Toshiba, which owns Westinghouse, supplied the turbine, and Westinghouse supplied the cooling pump. Suspicion was raised that the same situation could happen again this time, but now all of these technologies have been domestically produced.” However, it showed an “evasion of judgment” on whether Korea, which is the key player in the Czech contract for core technologies, had secured the “right to grant third-party licenses,” which is a condition of the Czech contract.

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The Czech public procurement law stipulates that if there is an error in the notation of a binding bid proposal, the bidder is disqualified, and in 2012, Areva of France was “deprived” of bids in three locations. Areva appealed the decision, but the Czech Anti-Monopoly Office dismissed it.

The 'license purchase' that KEPCO paid a huge amount of money for at the time was for Korean nuclear power plants, and the license for the original technology was still held by GE, which Westinghouse purchased. It seems that Korean professors, government, and media interpreted the 'Korean nuclear power plant usage license' as a "purchase of rights (license agreement)."

At a press conference for the summit with the Czech president on the 19th, in response to a Czech reporter's question about "how are the legal disputes between Hanwha Solutions and Westinghouse going?" President Yoon said, "The governments of Korea and the United States share a firm consensus on cooperation in nuclear power plants. I believe and am confident that it can be resolved well."

 

The title of the article in the ‘Kookmin Ilbo’ is <The Truth About Czech Nuclear Power Plants… “Export OK Despite Westinghouse Dispute”> with the subtitle <Westinghouse and Export Control Act Controversy, No Nuclear Power Plant Export Restrictions, Dumping Controversy Also Unclear, Experts Call Various Suspicions ‘Absurd’>.
See <Presidential Office ‘Notice’ on Reconsideration of Design Imitation of Korea in Czech Nuclear Power Plant Bid, September 5, 2024>
<World Nuclear Power Report Reveals Major Defects in Korea’s Barakah Nuclear Power Plant, Excess of $4.4 Billion, September 6>