U.S. trade commission sides with LG Chem

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U.S. trade commission sides with LG Chem

The U.S. International Trade Commission (ITC) made a default ruling in favor of LG Chem on Sunday regarding its electric vehicle (EV) battery trade secret complaint against SK Innovation.

In the preliminary ruling, the ITC made an initial determination that SK Innovation stole trade secrets on lithium-ion batteries in the process of recruiting former LG Chem employees since 2017.

As the default judgment ruling requires no additional hearings, the ITC is only left with making a final determination by Oct. 5.

If the ITC upholds its default ruling for the final determination, 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 that is set to mass produce batteries for Volkswagen from 2022.

After the ITC launched an investigation into LG Chem’s complaint in May, the company asked for “an order for default judgment” against SK Innovation while reporting that SK Innovation did not comply with an ITC data request by intentionally destroying evidence and not following forensic investigation orders.

LG Chem claimed that SK Innovation sent out instructions internally to EV battery-related departments beginning in April pinpointing which documents and emails should be erased.

It also argued that SK Innovation did not abide by ITC orders by doing forensics on only one out of 75 total spreadsheets while intentionally excluding an expert from the LG Chem side during the process.

The brawl between the two Korean EV battery makers started when LG Chem and its branch in Holland, Michigan, reported SK Innovation and its U.S. branch in Atlanta to the ITC in April, alleging that SK Innovation stole confidential technology secrets for rechargeable EV batteries in the process of hiring former LG Chem employees since 2017.

Korea’s largest battery maker by shipments also sued its rival in the U.S. District Court of Delaware. SK Innovation’s U.S. battery arm is located in Delaware.

SK Innovation countersued LG Chem at the Seoul Central District Court in June, asking for 1 billion won ($845,000) in damages from LG Chem for “dragging down” its business with “absurd” claims.

In the ITC complaint, LG Chem accused SK Innovation of hiring 76 of its employees and unlawfully acquiring trade secrets, citing a captured image of an application form used in the hiring process. The form asked each applicant for information on their previously undertaken projects, duration of the work and number of co-workers and project leaders, including their names.

SK Innovation responded then that it was “doing business based on fair competition,” adding that the form was drawn up in consultation with outside human resources agencies.

The ITC ruling is expected to work in favor for LG Chem in the rapidly growing global EV battery market. Dublin-based firm Research and Markets said in a report last year that the EV battery market will grow at 23 percent per year on average between 2019 and 2023, while market watcher SNE Research forecast that demand for EV batteries will far surpass supply by 2023.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]

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