KB Securities “SK Innovation, Litigation Uncertainty Will Be Reduced Due to Possible Agreement with LG”

Input 2021.02.15 08:56

KB Securities was established by the US International Trade Commission (ITC) on the 10th (local time) with LG Energy Solutions. SK innovation (096770)It was predicted that there would be a negative impact on SK Innovation in relation to the decision to win LG Energy Solutions in the final decision on the trade secret infringement lawsuit between the two parties. However, as LG Energy Solution and SK Innovation are highly likely to reach an agreement, uncertainty related to the lawsuit was rather lowered.

In a report on the 15th, Baek Young-chan, a researcher at KB Securities, said, “With the final decision of the ITC in the United States, the negative impact of SK Innovation’s battery business in the United States is inevitable.” It is because it is difficult to predict a positive outcome of the lawsuit even in civil lawsuits related to infringement.”

Prior to this, ITC reported that SK Innovation’s battery cells, modules, packs, and related parts and materials violated Article 337 of the U.S. Customs Act (sanctions that deal with unfair activities such as intellectual property rights infringement). Ordered a ban on imports in the United States for years.

However, researcher Baek predicted that there is a high possibility that LG Energy Solution and SK Innovation will resolve this issue through an agreement. He said, “If the veto is not exercised during the president’s deliberation period for 60 days after the final ITC decision, the ITC decision will be finalized.” I can see it.”

The reason why the veto is unlikely is that it can be vetoed in the interests of the United States, but there is little justification for the veto due to the exception of Ford and Volkswagen’s battery import ban. In addition, as trade disputes with China continue, there is no need to lower the US’s own strong cause for protection of intellectual property rights.

“SK Innovation also regrets the ITC ruling, but it is a situation in which an agreement is essential for battery production and sales in the United States.” He said, “As the likelihood of an agreement between the two companies has increased, the uncertainty related to the lawsuit has rather decreased.”

If an agreement is reached at least in the first half of the year, LG Energy Solutions will maintain trade secrets and protect intellectual property rights, and SK Innovation will eliminate the uncertainty in the US battery business, Baek said.