LG-SK, Battery ITC Final Verdict D-3... Three Possible Scenarios

Provisional Ruling Most Likely Cited
Battery and Parts Imports from US to Be Banned if SK Innovation Loses
SK Innovation Can Operate US Plant if 'Public Interest' Investigation Ruling Issued
Full Review Ruling Would Effectively Mean LG Loses
LG-SK Expected to Resume Settlement Talks After Ruling

[Asia Economy Reporter Hwang Yoon-joo] The final ruling by the U.S. International Trade Commission (ITC) on the trade secret infringement lawsuit between LG Energy Solution and SK Innovation over electric vehicle batteries is just three days away. Despite an unusual intervention by Prime Minister Chung Sye-kyun, who personally urged a resolution to the three-year-long battery dispute, both sides ultimately failed to narrow their differences. The two companies are expected to resume negotiations after the ITC's final ruling scheduled for the 10th (local time).

◆ The Fateful Day on the 10th... A Tense Battle of Wills

Currently, there are three major possible decisions the ITC can make. Among them, the most likely decision is to uphold the preliminary ruling issued by the ITC in February last year. Previously, the ITC issued a preliminary ruling of 'early loss' against SK Innovation. If SK Innovation's final loss is confirmed, the import of batteries and related parts into the U.S. will be banned. SK Innovation can appeal to the Federal Circuit Court, but the import ban will not be suspended, and the ban will remain in effect until the appeal is won.

However, even if a loss decision is made, it is not the end. Although SK Innovation's position becomes very unfavorable, it can negotiate with LG Energy Solution to adjust the scale of the import ban and damages. The U.S. President may also exercise a veto on administrative actions within 60 days of the final ruling. If this happens, SK Innovation can continue its battery business in the U.S. by posting a bond during this period.

The second possibility is that the ITC upholds the early ruling but issues a decision to investigate the 'public interest' to determine whether there is harm to the U.S. economy. Depending on the outcome, the import ban may not be imposed, allowing SK Innovation to operate its U.S. plant. However, uncertainty remains a risk factor for SK Innovation depending on the severity of the ITC's decision.

The last possibility is a full reconsideration (remand) ruling. This means the ITC orders a re-investigation of the facts. Since the administrative judge cannot issue the same decision as before, this effectively means LG Energy Solution loses. If a full reconsideration ruling is made, it is expected to take about six months to issue a final decision again. If a trial pending in the Delaware federal court continues after the final decision, the lawsuit could extend for at least another year and a half.

◆ Both Companies Likely to Resume Settlement Talks After Final Ruling

The positions of both sides remain divided over the ITC's final ruling. In the past 10 years, the ITC has handled a total of six trade secret infringement cases. All received import ban administrative measures ranging from five to 25 years. Five of these cases were appealed, but none resulted in a changed outcome. LG Energy Solution is also paying attention to the Biden administration's emphasis on intellectual property rights. A representative from LG Energy Solution said, "In the 100-year history of the ITC, there has never been a veto issued in a trade secret infringement case."

On the other hand, SK Innovation argues that most of the battery technology at issue in the lawsuit is already publicly disclosed technology and therefore cannot be considered trade secret infringement. They are hopeful that the ITC will issue a final decision considering the 'public interest' aligned with the Biden administration, which is fostering the electric vehicle industry.

An industry insider said, "Since this lawsuit is about dominance in the electric vehicle battery market, the key issue is whether imports will be banned in the U.S. If the preliminary ruling is upheld, SK Innovation's battery business will face setbacks, and if SK Innovation continues its business in the U.S., it can be considered a loss for LG Energy Solution."

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