ITC ruling on Korean battery dispute delayed until February

[YONHAP]

The U.S. International Trade Commission (ITC)’s final ruling on the high-profile battle between Korean battery makers LG Chem and SK Innovation was postponed for a third time to February 2021.

Under the original schedule, a final verdict was supposed to come out on Oct. 5. That date was put off to late October and once again to Thursday. Now a ruling is promised on Feb. 10.

That extends the ITC suit to nearly two years since LG Chem reported its rival to the U.S. government body on April 2019, accusing it of stealing trade secrets on technology for electric vehicle (EV) batteries. LG Chem and SK Innovation are Korea’s first and third largest suppliers of EV batteries.

The ITC did not disclose a reason for the delay.

At the moment, LG has the upper hand. In February, the commission made a preliminary ruling in the top battery supplier’s favor, saying SK Innovation had destroyed evidence — a serious issue for the ITC. All of the ITC’s initial determinations on trade secret violations were upheld in final rulings between 2010 and 2018.

From that point on, victory should have been a matter of time for LG — that is, until the final announcement kept on being delayed. Now the question is: Is the postponed schedule a sign that ITC stance might change?

In respective statements released after the ITC’s notice, LG Energy Solution and SK Innovation suggested mixed possibilities. As LG Chem’s wholly owned battery subsidiary that spun off this month, LG Energy Solution inherited the legal brief.

“The ITC did not give a definite reason, but more than 50 rulings have been postponed this year due to various reasons including the coronavirus pandemic — we believe that’s the case for us as well,” LG Energy Solution said in a Thursday statement.

The leading battery maker added that among 14 ITC suits which had final rulings postponed, nine cases found the defendant guilty of violating customs law.

SK Innovation, on the other hand, bet on the possibility that the delay signals resistance among ITC judges to uphold the initial determination.

“The ITC has once again postponed the announcement by a full two-month period, and that proves that the commission is thoroughly reviewing the core agenda on violation of trade secrets as well as the economic impact the ruling will have on the U.S. economy,” the company said in a statement.

For SK’s part, the ITC reconsidering the case with a stronger focus on trade secret violations wouldn’t be a loss, as the initial determination in February was grounded on the company having damaged evidential data.

The battery maker also has two plants under construction in the U.S. state of Georgia — projects lauded by state officials as among the region’s largest foreign investment ever. Its client carmakers Volkswagen and Ford had also come out in support of SK, submitting statements to the ITC earlier this year expressing concern of a supply disruption.

In its statement, SK Innovation expressed hope that an agreement could be reached.

“The prolonged lawsuit that now enters its third year also extends a period of uncertainty,” the company said in its Thursday statement. “We hope both parties can end the dispute in the near future and focus resources on their respective business.”

The two companies have engaged in talks to reach an agreement after the initial determination was made in favor of LG. But according to local reports, they failed to narrow down their opinions on the scope of the damage and the volume of compensation.

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