The US International Trade Commission (ITC) on Wednesday ruled in favor of LG Energy Solution against SK Innovation, in the pair’s lawsuit over trade secrets.
SK Innovation was issued a 10-year import ban on its batteries. However, its supplies to Ford and Volkswagen were suspended by four years and two years, respectively.
ITC’s determination will go into affect unless there is a presidential veto within 60 days. There has been no case so far where a US President exercised their right to veto, when the matter involved trade secret.
SK Innovation will have to approach LG Energy Solution for a settlement.
Going forward, LG Energy Solution will likely have a strong advantage in its ongoing civil lawsuits with SK Innovation. LG had filed a trade secret violation lawsuit against SK to the district court in Delaware in April of 2019. The damages SK may have to pay will likely exceed billions of dollars due to past violations and punitive damages.
SK Innovation’s battery, battery cell, battery module and pack supplied to Ford for the latter’s electric pick-up truck F-150 will be allowed, however, for the next four years. It will also be able to supply parts for Volkswagen’s electric cars made in the US for two years. Thanks to this, at least SK Innovation has avoided potential damages it has to pay its customers for failing to supply them.
However, the Korean energy company has so far won over 20 trillion won in battery orders in the US. The four year suspension will be difficult to swallow for the company. It has also already invested over 5 trillion won in building its battery factory in Georgia.
In a statement following the ITC’s determination, SK Innovation said it was regrettable that the lawsuit didn’t practically reveal a violation of trade secret, which is the core of the case. It also said it was a relief that there was a suspension period so that it could supply batteries to Ford and Volkswagen.
SK Innovation also said its Georgia factory is a requisite for US government’s environmentally friendly electric car industry drive. As the factory could produce thousands of quality jobs, it will relay the effect the factories has on the public good in the US, the company said.
Also in a statement, LG Energy Solution welcomed ITC’s judgment, saying it showed clearly proved SK Innovation’s technology theft. The determination proved that, not only patents but trade secrets were very important in the battery industry.
On whether the pair can reach a settlement, LG said SK should stop its behaviors that distorted the situation of their lawsuits and accept ITC’s determination humbly and propose a [settlement fee] to match to end their dispute as soon as possible.
The pair’s dispute began when LG filed a trade secret violation lawsuit against SK to the district court of Delaware in April 2019. Since then, the two companies has been embroiled in multiple lawsuits in South Korea and the US.