No deal looms between LG Chem and SK Innovation over trade secret case

LG Chem and SK Innovation — Korea's top two electric vehicle (EV) battery makers — appear unlikely to produce a breakthrough in their high-stakes trade secret case over EV batteries ahead of next week's final ruling in the United States, industry officials said Monday.

A key issue is whether SK Innovation misappropriated and used EV battery trade secrets of its local rival as alleged by LG Chem.

In April last year, LG Chem filed a pair of lawsuits with the U.S. International Trade Commission and the U.S. District Court of Delaware, claiming that SK Innovation misappropriated and used its EV battery trade secrets by hiring its former employees.

LG Chem also called for an embargo on importing EV battery-related products from SK Innovation and demanding compensation for the theft of trade secrets.

In February, the U.S. panel made a preliminary ruling in favor of LG Chem in the case. The U.S. panel is set to give its final ruling on Oct. 26.

Some industry officials said the most probable outcome is that the U.S. panel could rule in favor of LG Chem, citing its record that no preliminary rulings on trade secret cases have been overturned.

LG Chem has also said it believes that the U.S. trade panel could uphold its default judgment.

Still, SK Innovation has said it expects the U.S. commission to remand its preliminary ruling, claiming that its technology is second to none and there was no need for the company to infringe upon its rival's trade secrets.

In July, LG Chem Vice President Lee Myoung-seok said a settlement is possible if it is a reasonable level based on an objective basis.

But the two sides are reportedly miles apart over the amount of compensation.

An official of SK Innovation said that the possibility of striking a deal with LG Chem "appears to be low at this point."

The official said SK Innovation could have difficulties in running its EV battery plants being built in the U.S. state of Georgia if the company loses the trade secret case.

A defeat also means that SK Innovation could face difficulties in supplying its EV batteries to its clients in the United States, including Ford Motor, the SK official.

SK Innovation has been building its first EV battery plant with a capacity of 9.8 gigawatt hours in Georgia. The first plant is on track to begin mass-producing EV batteries in 2022.

SK Battery America, which is wholly owned by SK Innovation, also broke ground on the second EV plant with a capacity of 11.7 gigawatt hours in July.

The investments in the United States would raise SK Innovation's global output capacity to 71 gigawatt hours, enough to supply batteries to more than 1.4 million EVs.

SK Innovation said it aims to boost its capacity to 100 gigawatt hours by 2025.

Currently, SK Innovation has three plants in operation: one each in South Korea, China and Hungary.

The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.

Yonhap