Battery Lawsuit, The Day of Reckoning

[Asia Economy Reporter Park So-yeon] The final verdict in the battery trade secret infringement lawsuit between LG Chem and SK Innovation, which has been ongoing for over a year and a half, is approaching. The U.S. International Trade Commission (ITC) is scheduled to deliver its final ruling on the 26th (local time). It is expected to be announced around the morning of the 27th in Korean time.

◇ Will the early loss ruling against SK be overturned in the final verdict? = LG Chem filed a lawsuit in April last year, claiming that SK Innovation infringed on its electric vehicle battery trade secrets by poaching a large number of its employees. In February this year, the ITC issued a preliminary decision ruling against SK Innovation. If the final ruling confirms SK Innovation’s loss, an import ban on SK Innovation’s battery products in the U.S. will take effect, making normal business operations difficult.

Industry insiders predict that the ITC may find it burdensome to issue a one-sided ruling against SK Innovation. This is because not only LG Chem but also SK Innovation is a company that has made large-scale investments in the U.S., building battery plants and generating economic effects such as employment. The state of Georgia, where SK Innovation’s plant is located, and automakers that receive batteries from SK Innovation have expressed support for SK Innovation.

Accordingly, there is speculation that the ITC may acknowledge SK Innovation’s loss but attach a public interest evaluation considering the impact on the U.S. economy as a condition. If the ITC issues a 'modification' order that effectively reexamines the preliminary ruling, the lawsuit could enter a new phase. For LG Chem, the most favorable scenario is the confirmation of SK Innovation’s loss, while for SK Innovation, a modified ruling is the most advantageous.

Even after this final ruling, both companies can appeal, and since a patent infringement lawsuit is also underway separately from the trade secret infringement case, the legal battle between the two companies is expected to be prolonged. However, both sides still keep the possibility of settlement open, and there is speculation that the final ruling could accelerate a settlement.

◇ Movements of both sides after the ruling = In this lawsuit ruling, the most important issues are whether LG Chem’s trade secret infringement claim is recognized and whether SK Innovation’s import ban is enforced. LG Chem is expected to focus on receiving damages based on the recognition of trade secret infringement. An LG Chem official said, "From LG’s standpoint, no matter what scenario unfolds, as long as trade secret infringement is recognized, a claim for damages is possible." This is interpreted as meaning that LG Chem will resume the civil lawsuit in the U.S. District Court for the District of Delaware after the ITC ruling.

SK Innovation is expected to focus on nullifying the effect of the import ban order if it receives a final loss ruling from the ITC. First, it can post a bond to temporarily suspend the effect of the ITC’s import ban order. If it requests a review from the U.S. administration, a conclusion on whether to impose the import ban will be reached within 60 days. SK Innovation may also appeal the ITC decision to the U.S. Court of Appeals for the Federal Circuit. During this process, if the two companies reach a settlement within 60 days after the ITC ruling, the import ban will be lifted.

Currently, both companies are increasingly eager to reach a settlement. LG Chem is struggling to prolong the battery lawsuit amid shareholder backlash over electric vehicle fires and the physical division of its battery division. SK Innovation also needs a swift settlement to secure investment for next-generation battery business amid a downturn in the refining industry. An LG Chem representative said, "Our position that the door to dialogue remains open has not changed." SK Innovation emphasized, "A settlement is necessary for the advancement of K-battery in the global battery supremacy war."

This content was produced with the assistance of AI translation services.