Visuals-Battery War
LG Energy Solutions (formerly LG Chem’s battery division) won the battery dispute with SK Innovation for nearly two years. This is because the US International Trade Commission (ITC) made a final decision acknowledging LG’s allegations in the case of infringement of trade secrets filed by LG Energy Solutions against SK Innovation on the 10th. The attention is focused on the agreement between the two companies. As LG Energy Solutions took the initiative, it seems clear that SK Innovation is at a disadvantage. However, due to the significant difference in the gap between the settlement funds set internally by the two companies, a fierce tug of war is expected to reach an agreement.
According to the industry on the 14th, LG Energy Solutions acknowledged the infringement of trade secrets to SK Innovation and requested more than 3 trillion won as a reasonable settlement. In response, it is reported that SK Innovation has suggested a level of 600 billion to 800 billion won, saying that it is an “irrational amount”. The gap between the two sides in the settlement amount exceeds 2 trillion won.
LG’s position is that the amount of the settlement amount has been decided based on the US Federal Trade Secret Protection Act (DTSA). According to DTSA, the proof and calculation of damage takes into account the actual damage suffered by the plaintiff, the unfair gains taken by the victim, and the expected future damage. In particular, the US has a punitive damage compensation system, so if the perpetrator intentionally violates the trade secret, the amount is added for the purpose of punishment and prevention of recurrence. LG officials are reluctant to disclose the specific amount of the settlement amount, but “It is unfortunate that SK is still not acknowledging the infringement of trade secrets even when the final ITC decision has been reached.” I will have to work on it.”
However, SK Innovation’s position is different. He argues that it is difficult to accurately predict the future value of electric vehicle batteries, which has just begun, and the scale of fines of an average of 250 billion won arising out of the lawsuit for infringing trade secrets in the United States so far. In addition, it is explained that the phase loss of the’K battery’ that will be suffered in case of disruption in the production of SK Innovation batteries in the U.S. through this ITC decision should be considered. SK Innovation was banned from importing, producing, distributing, and selling in the US for the next 10 years as a result of ITC’s final ruling. Currently, SK Innovation is building two factories capable of producing a total of 430,000 electric vehicle batteries in Jackson County, Georgia, with a cost of $2.6 billion (about 3 trillion won).
What SK Innovation is holding on to hope is the possibility of US President Joe Biden’s veto over ITC’s final decision. The President of the United States may exercise his veto within 60 days after the final ITC decision when it is determined that it has a public purpose. Georgia’s Governor Brian Kemp, who is concerned about massive job losses, has requested a veto from President Biden on the 12th. This is a region where President Biden won a new victory with a difference of about 12,000 votes in the last presidential election, and it is a place that attracts attention as an outpost of eco-friendly businesses such as electric vehicles and batteries in order to develop the’green energy’ industry, one of the major pledges. LG, however, is confident that the possibility is not high, given that the US president has never vetoed a ruling on ITC trade secret infringement.
In the end, the key is how to close the settlement fund gap. As Prime Minister Jeong Sye-gyun also urged an agreement last month, saying, “If the two companies fight, they will only do good things,” some observers say whether SK Chairman Choi Tae-won and LG Chairman Gu Kwang-mo will come forward. In particular, as Chairman Choi is about to take office as chairman of the Korea Chamber of Commerce and Industry, which represents the business world, there is no small prospect whether or not to enter into negotiations as soon as possible. An official from SK Innovation said, “Under reasonable conditions, we can negotiate an agreement at any time.”
Ryu Jong-eun reporter [email protected]
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