LG Energy Solution, the global leader in pouch-type lithium-ion battery technology, prevailed Wednesday over SK Innovation and SK Battery America in a multi-billion dollar trade secret dispute at the U.S. International Trade Commission. Today’s Commission decision blocks the importation, domestic production, and sale of SK Innovation batteries for electric vehicles that unlawfully rely on LG Energy Solution’s trade secrets.
“SKI’s total disregard of our warnings and intellectual property rights gave us no choice but to file this case and we are grateful to the International Trade Commission for protecting our innovations and significant economic investments in the United States,” said Jong Hyun Kim, CEO of LG Energy Solution. “As a global leader and technology innovator, we will further strengthen the protection of intellectual property rights going forward.”
In April 2019, LG Chem and its US-based manufacturing unit filed a complaint with the International Trade Commission accusing SK Innovation and SK Battery America (“SKI”) of trade secret theft by hiring dozens of engineers, manufacturing, and critical business services staff. In December 2020, LG Chem spun off its electric battery division into a new wholly-owned subsidiary, LG Energy Solution, which now owns the trade secrets at dispute.
Citing a record that proved SKI extensively and intentionally destroyed evidence of its trade secret theft, an administrative law judge issued an initial determination that imposed a default judgment in favor of LG Chem in February 2020. That decision, which found SKI had acted in bad faith to hinder the court’s investigation and administration of justice, was upheld today by the full Commission.
The Commission’s final determination provides two significant remedies to SKI’s theft, including imposing a ten-year long exclusion order to stop any importation of batteries, battery cells, battery modules, battery packs. The Commission also imposed a complementary cease and desist order to prevent SKI from making or selling any such products in the US. The Commission provided a limited exception to allow SKI to supply Ford with electric batteries for its EV F-150 pick-up trucks for four years and to Volkswagen for its MEB line for the North America Region for two years, after which the full force and effect of the exclusion and cease-and-desist orders will remain in place. The order also allows for the repair or replacement of batteries for Kia vehicles sold by the date of the order and originally equipped with SKI batteries, as agreed by LGES and the Commission staff.
Using LG Energy Solution’s stolen technology, SKI improperly secured lucrative contracts with US auto manufacturers, whose orders totaled in the billions, and negotiated historic subsidies and incentives from state and local governments to build a new manufacturing facility in Georgia. SKI’s new Georgia plant would have relied on LG Energy Solution’s stolen trade secrets, and the ITC’s ruling has definitively prohibited use of LG Energy Solution’s misappropriated technology.