US commission backs LG in high-profile trade secret dispute

The US International Trade Commission (ITC) affirmed a preliminary ruling delivered in February 2020 to support LG's claims that SK used stolen trade secrets to develop its electric vehicle (EV) batteries.

Washington: A US trade panel has ruled in favour of South Korean battery maker LG Energy Solution Ltd, in a trade secret case and issued a 10-year import ban on some lithium-ion battery products by SK Innovation Co.

The US International Trade Commission (ITC) affirmed a preliminary ruling delivered in February 2020 to support LG’s claims that SK used stolen trade secrets to develop its electric vehicle (EV) batteries.

---

The ITC on Wednesday issued “a limited exclusion order” for 10 years to ban import of some lithium-ion batteries and its components by SK Innovation, but permitted shipment of components for domestic production of its clients, including Ford Motor, Volkswagen and Kia, considering “public interests.”

The limited exclusion order permits SK Innovation to import components for domestic production of lithium-ion battery products for Ford Motor EV F-150 programme for four years and for Volkswagen’s EV production line in North America for two years to permit these third parties to transition to new domestic suppliers, the ITC said in the ruling.

It also allows SK Innovation to import articles for repair and replacement of EV batteries for Kia vehicles that had been sold to U.S. customers as of the date of the orders and were originally equipped with SK batteries, reports Yonhap news agency.

The final ruling deals a heavy blow to SK Innovation, which has been building a factory in Georgia, to be completed by 2022, to provide EV batteries to Volkswagen and Ford.

It also is building its second plant in the site and has pledged to hire 2,600 people by 2024.

LG Energy Solution, wholly owned by LG Chem Ltd., has accused SK of hiring its former engineers to gain access to sensitive information on LG’s battery technology.

The world’s No. 2 EV battery maker supplies batteries to Tesla, General Motors, Volkswagen, Hyundai Motor and a number of other automakers. It already produces batteries in a plant in Michigan and is building another factory in Ohio to supply Utlium Cells, its battery joint venture with GM.

The Biden administration has 60 days to review the ITC’s ruling. Unless Biden vetoes the ruling, it becomes final.

LG and SK are mired in tit-for-tat battery patent infringement disputes filed in the U.S. in 2019, with decisions are expected later this year.