Court dismisses SK Innovation lawsuit against LG Chem

The first domestic legal ruling in the “battery brawl” between LG Chem and SK Innovation was made in favor of LG on Thursday.

The ruling regarded one civil suit SK Innovation had filed against LG Chem at Seoul Central District Court in October 2019, requesting its larger rival halt ongoing suits regarding electric vehicle (EV) battery technology and pay 1 billion won ($843,500) in damages.

The court dismissed both requests.

The two major battery makers have been fighting multiple legal battles in Korea and the United States after LG Chem reported SK Innovation to the U.S. International Trade Commission (ITC) in April 2019, claiming the smaller company stole trade secrets related to its pouch-type lithium-ion batteries.

However, SK claimed LG broke a 10-year agreement to avoid legal conflicts regarding battery technology on separators — patented under the registration No. 775,310 in Korea. It was signed in 2014 after LG lost two rounds of legal battles in Korea claiming patent infringement. That same technology was registered as U.S. patent No. 7,662,517, which was one of the five patents LG claimed was violated in its U.S. legal action.

LG Chem’s argument was that the two patents are different as they were registered in different countries.

The Seoul court agreed. Its judgement was that the 2014 agreement between the two companies “did not include [a pledge] to refrain from suing in regards to U.S. patents,” according to a Thursday statement.

“The court’s decision clearly proves that SK Innovation’s lawsuit was an unreasonable claim intended to mislead legal battles on trade secret and patent infringement in the United States,” LG Chem said in response to the ruling.

On the other end, SK Innovation expressed “deep regret” and said it will appeal to a higher court.

“The 2014 agreement was intended to clear legal battles on ceramic coating separators for 10 years in Korea and overseas. For our part, there was no reason to agree with a pledge with influence limited to Korea — this does not match the original intent of the agreement,” the company argued.

At the moment, LG Chem is highly likely to win a battle against SK at the U.S. ITC. In March, the ITC made an initial determination that SK Innovation did steal trade secrets related to lithium-ion batteries in the process of recruiting former LG Chem employees since 2017. A final determination will be made in October.

If the ITC upholds its default ruling, SK Innovation will have to halt imports of EV batteries, parts and manufacturing equipment to the United States, where it has an EV battery plant under construction in Georgia.

The two companies are holding discussions to reach an agreement outside the court, but according to local reports, the talks are not going smoothly.

While SK finished its Thursday statement saying the company “hopes to continue cooperation for the battery industry’s growth,” LG Chem stated it intends to “push through all legal procedures to the very end if SK Innovation does not show sincerity.”

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]