The US Trade Commission has given a preliminary ruling on the legal dispute between the two South Korean battery manufacturers LG Chem and SK Innovation in the USA. The Trade Commission has ruled in favour of LG Chem, and a final decision is expected by 5 October 5th.
Near the beginning of 2019, LG Chem filed a suit against SK Innovation in the USA. The dispute goes back to late 2016 when SK Innovation allegedly poached 77 employees from LG Chem when a a “significant number” of engineers passed on LG Chem’s protected know-how in the development and manufacture of lithium-ion pouch cells to SK Innovation. Later in 2019, SK Innovation turned the tables and launched a counter-suit for patent infringement.
In December, US court files examined by Reuters showed that both companies were trying to prevent each other from importing and selling batteries intended for electric SUVs from Volkswagen and Ford in the USA, among others. LG Chem claimed that SK Innovation won the contract to supply battery cells for Volkswagen’s MEB only because employees hired by LG Chem allegedly disclosed said trade secrets.
The dispute has governments and international automaking giants on tenterhooks. The South Korean government pleading approached both companies for a resolution to the embarrassing disagreement that threatens to disrupt battery supply both Volkswagen and Ford in the USA. At the end of last year, Industry Minister Sung Yoon-mo said that they were watching the dispute closely, wanting to support an outcome that would bring about a “positive outcome for the country overall”. Now it seems, both sides are open to talks.
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The sentiment communicated by an LG Chem spokesperson to The Korea Times was: “There will be no change in that LG Chem will be sincere in the remaining litigation process. However, we won’t nail down our decision. We are also open to talking with SK Innovation for a possible settlement.” LG Chem said that it is open to “talking about making progress towards repairing its relationship with the SK Group affiliate,” as the Korean newspaper wrote. It seems that SK Innovation is similarly open to talks, saying that LG Chem is still its “business partner to develop the battery industry’s ecosystem together,” which would indicate an inclination to move beyond the corporate war zone.
According to The Korean Times, an analyst from the Korean battery industry said that “Both LG Chem and SKI want to reach a settlement ending their long legal tussle because neither of them wants to lose their customers, which are EV makers.”
If the final decision of the US Trade Commission follows the preliminary one, this could mean that SK Innovation will not be allowed to import the battery components into the US required to supply the US factories for Volkswagen and Ford Motors.
>> With reporting by Stefan Köller, Germany.
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