‘If SK Innovation developed its own product without violating the trade secrets of LG Energy Solution, it would have taken 10 years’. This is the gist of the 96-page final opinion that the US International Trade Commission (ITC) released on the 4th (local time) of the two companies’ lawsuit. While the Joe Biden administration reviewed the ITC’s final ruling, which came out on the 10th of last month, the basis for ITC’s hand in hand with LG Energy Solutions was presented in detail.
‘Battery Litigation’ Final Opinion Released
LG “Clearly proved infringement of trade secrets”
SK “Sorry for hearing without actual verification”
LG 2~3 trillion, SK 500~600 billion
There is a big difference in the settlement fee, but there is also a possibility of compromise
The opinions stated that SK Innovation’s act of deleting documents, excuses that this is a regular practice, and attempts to conceal the act of deleting documents were due to’flagrant bad faith’. Moreover, he pointed out that the attempt to conceal evidence was conducted company-wide under the direction of the high-level. Accordingly, 22 trade secrets in 11 categories submitted that LG Energy Solutions had been infringed were judged as the subject of the legal remedy order. The 11 categories are overall process, raw material and parts specification information, and jig formation (data related to battery cell activation).
Final ruling on patent infringement lawsuit in November
The two companies’ lawsuits ignited in April 2019 when LG Chem, before the separation of LG Energy Solutions, filed a lawsuit in ITC and the U.S. Federal Court for infringing trade secrets from SK Innovation. Afterwards, when SK Innovation filed a suit against LG Chem for infringing some patents, LG Chem also filed a counter-action lawsuit, claiming that the person who infringed the patent was SK Innovation. The trade secret infringement lawsuit has already been concluded, and the final judgment before the patent infringement lawsuit is expected to come out at the end of November. Patents are subject to a certain screening process on the premise of’disclosure’ of technology, and after filing, the holder has exclusive and exclusive use rights for a certain period of time. Unclear) and different.
Graphic = Reporter Park Chun-hwan [email protected]
The ignition point before the lawsuit related to the infringement of trade secrets was the competition for battery orders between the two companies against Volkswagen, Germany in September-October 2018. ITC admitted that at the time, SK Innovation had obtained the competitive price information of LG Chem, which is a trade secret, and offered to supply its batteries to Volkswagen at a lower price than LG and received the order.
ITC even revealed the final opinion, but the difference between the two companies remains. This is because even if an agreement is reached, there is a large sum of money. An official at LG Energy Solutions said, “It has been clearly proven that the infringement of trade secrets (SK Innovation’s) in all areas of the battery business, including development, production, and sales, has been demonstrated.” On the other hand, on the 5th, SK Innovation issued a position statement and said, “Since the two companies have different methods of developing and manufacturing batteries, there is no need for a trade secret of LG Energy Solutions. I made a supply contract with an automobile manufacturer, but ITC regretted that I was hearing it on the basis of procedural defects in the lawsuit (document deletion, etc.) without substantial verification.” Specifically, it is a position that “even though it is determined that it is infringing on the trade secret, it is still not able to determine what the trade secret was infringed and how it was violated.” He emphasized that “LG could not provide evidence of infringement, and no evidence of infringement of trade secrets, the essence of this issue, was revealed in any ITC opinion.”
Regarding this, Kim Jung-min of Law Base Law Firm analyzed that “ITC recognized 22 trade secret infringements more than the industry expected,” and said, “It means that SK Innovation saw the infringement of trade secrets as serious.” Attorney Kim said, “The 10-year ban on imports (SK Innovation’s bringing in battery production products into the United States) is that the technology gap between the two companies is that big. It would have had an effect on the decision.” He added, “If SK Innovation’s data is insufficient, ITC will have to refer to LG Energy Solution data more.”
The possibility of an agreement between the two companies remains open depending on the background of Chinese competitors’ speed and national interests. However, there is a large difference in the amount of the settlement amount. According to the industry, LG Energy Solutions is considering 2 to 3 trillion won in settlement money, and SK Innovation is considering 500 to 600 billion won. LG Energy Solutions left a space at an online press conference on the 5th, saying, “If SK Innovation accepts the final decision of the ITC and negotiates sincerely, the settlement amount can be flexibly set.” A business official predicted that “the global electric vehicle battery market is fiercely competitive, and the two companies have a large cost burden due to prolonged lawsuits. . However, Han Woong-jae, head of the legal department of LG Energy Solutions, warned that there could be disadvantages beyond the ITC decision, such as the use of the punitive damages system in the United States, saying, “If there is no agreement, we will go according to the principles.”
SK considers plans to continue business with deposits
The SK side is in an atmosphere of being passive about the agreement right now. We look forward to President Joe Biden’s right to veto the import ban. The ITC ruling is finalized when President Joe Biden goes through a Presidential Review and approves it. SK delivered an opinion to the White House stating that’in the ITC’s decision, there was no judgment as to what trade secrets were violated and how it was violated.’ President Joe Biden decides whether to exercise the veto within 60 days of the final ITC decision. SK is also reported to be considering a plan to continue the business by paying a deposit to the court for agreement on goods subject to a decision to ban importation and temporarily suspending its effect.
Reporter Lee Chang-gyun [email protected]
