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The US International Trade Commission (ITC) confirmed the victory of LG Energy Solutions in the final decision on the last 10 days (local time) of LG Energy Solutions and SK Innovation’s rechargeable battery `Trade Secrets infringement` lawsuit. The agreement is drawing attention.
Since the two-year lawsuit from 2019 has deepened the emotional goal of both sides, the agreement may face difficulties. Even just before the final decision of the ITC, LG presented a settlement amount ranging from 2 to 3 trillion won, and SK presented a settlement amount ranging from 100 billion to several hundred billion won without acknowledging the infringement of trade secrets.
In fact, there was no contact between the two sides during the Lunar New Year holidays when the ITC decision was made. However, in the business world,’negotiation is a matter of time’. This is because, as the ITC decision was finalized, there was room for managers who were relieved of the burden of resignation to begin negotiations in earnest. Specifically, there are observations that negotiations may be caught before and after the inauguration of SK Group Chairman Choi Tae-won as chairman of the Korea Chamber of Commerce in early next month. Also, on the 18th of this month, the board of directors of the Korea Battery Industry Association is scheduled. The CEO of three domestic battery companies will attend, and attention is being focused on whether the meeting between LG Energy Solutions President Kim Jong-hyun and Ji Dong-seop, CEO of SK Innovation’s battery business will be established, and what stories will come and go.
◆ ITC admits LG allegations of’infringement of trade secrets’
On the 10th, the ITC confirmed the’infringement of trade secrets’ raised by LG Energy Solutions, and ordered ’10 years to ban imports from the US’, saying that SK Innovation violated Article 337 of the US Customs Act. However, Ford’s electric pickup truck F-150 battery parts and materials were allowed for four years, and Volkswagen MEB battery parts and materials were allowed for two years. It also allowed the import of battery products for repair or replacement of batteries for Kia electric vehicles already sold in the US. In addition, ITC issued a ’10-year order to stop infringing trade secrets’, prohibiting production, distribution, and sales of infringing items that have already been imported. In this decision, ITC acknowledged all of LG Energy Solutions’ claims that SK Innovation caused economic damage by stealing the business secrets related to LG Energy Solutions’ secondary batteries and using them in a wide range of areas such as R&D, production, testing, order receipts, and marketing. did. In this ITC lawsuit, LG Energy Solutions has given great significance in that the intellectual property rights it has accumulated through investments of tens of trillions of won over 30 years have been properly protected. An official from LG Energy Solutions said, “It will be an opportunity to protect and recognize the technology of domestic battery makers by putting a brake on possible manpower and technology takeovers from global competitors.”
Investment Bank Credit Suisse also said in its report after the final decision of the ITC that “the settlement is expected to be over 5 trillion won”.
◆ SK “Sorry, but not the worst”
Although SK Innovation responded that it was unfortunate about this decision, it was “not the worst”. In response to this ITC decision, SK Innovation said, “We are sorry for the fact that there was no substantial judgment on the infringement of trade secrets, and to correct the decision through the Presidential Review, etc., I will do my best.” The ITC makes a final decision after going through a US presidential review within 60 days of the ruling.
An official from SK Innovation said, “SK battery is the’world’s safest battery,’ which has never had safety problems in the past 10 years, and if it cannot be supplied to US consumers through US automobile companies, it is a big deal for US companies and consumers. “I will emphasize that it is a loss.” The official said, “The battery factory that SK Innovation is building in Georgia, USA, is a scale that can create up to 6,000 high-quality jobs with an investment of up to 5 billion dollars.” He emphasized, “We will actively communicate that we have no choice but to affect the US economy beyond just SK.”
However, the possibility of a presidential veto is low in the industry. This is because ITC has already put a grace period for allowing imports for Volkswagen and Ford. In addition, it is explained that there is no precedent for the exercise of veto rights regarding the stealing of trade secrets, not patent infringement, and that the Joe Biden administration has always emphasized intellectual property rights.
◆ Both companies”quick negotiations’ rise to the test
Inside and outside the business world, there is a voice that the two companies should promptly engage in massive discussions and cooperation.
At a press conference immediately after the announcement of the final ITC decision, LG Energy Solutions said, “The reason we have not reached an agreement with SK Innovation is because it has not admitted infringement of trade secrets.” “You have to negotiate in line with that.” Along with this, LG Energy Solutions demanded, “We hope for a reasonable apology based on a sincere attitude to SK Innovation.”
SK Innovation said, “With SK Innovation’s battery division sales of less than 2 trillion won last year, it is difficult to realistically accept the settlement amount required by LG.” However, “We will review the agreement at any time before and after the presidential review.” This supports the fact that the two companies can reach an early agreement as early as next month. The inauguration ceremony of Chairman Choi and the President of the United States of America will each reach the deadline within a month or two.
Sohn Seung-woo, a professor at Chung-Ang University’s Department of Industrial Security, said, “This ruling could lead to a huge disadvantage if LG filed an additional lawsuit against SK in Europe and China.” You shouldn’t,” he said. Professor Jae-pil Cho of the Department of Energy and Chemical Engineering at UNIST said, “SK Innovation plans to supply advanced batteries with a nickel content of 90% or more to the Ford F series. If the lawsuit results, SK Innovation will not be able to use the technology properly. “The way K-Battery develops is to rush to reach agreement with each other.”
[이윤재 기자 / 최근도 기자]
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