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U.S. trade panel says SK stole LG trade secrets for EV batteries

Economy 11:30 March 05, 2021

SEOUL, March 5 (Yonhap) -- A U.S. trade panel has said SK Innovation Co. misappropriated trade secrets of its South Korean rival LG Energy Solution Ltd. for its development of electric vehicle (EV) batteries, in a decision that could jeopardize SK Innovation's battery businesses in the United States.

The U.S. International Trade Commission (ITC) said Thursday (local time) that SK Innovation's destruction of evidence "was ordered at a high level and was carried out by department heads throughout SK," calling SK Innovation's move "extraordinary."

The commission also said SK Innovation's conduct demonstrates flagrant bad faith in destroying documents, excusing that destruction as routine, and otherwise trying to hide that destruction.

This file image depicts the legal dispute between LG Energy Solution Ltd. and SK Innovation Co. (Yonhap)

The commission's opinion came about a month after it ruled in favor of LG Energy Solution in a trade secret case and issued a 10-year import ban on some lithium-ion battery products by SK Innovation.

In February, the commission affirmed a preliminary ruling delivered in February 2020 to support LG Energy's claims that SK Innovation used stolen trade secrets to develop its electric vehicle batteries.

The ITC 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 Co., Volkswagen AG and Kia Corp., considering "public interests."

On Thursday, the commission said it is clear that SK Innovation would not have been able to develop the information in the stolen trade secrets in anything less than ten years without the stolen trade secrets of LG Chem.

The commission said SK Innovation did not have the personnel or ability to simultaneously develop all the trade secret technology it misappropriated from LG Energy Solution in less than ten years.

LG Energy Solution is LG Chem Ltd.'s battery subsidiary launched in December and now is in charge of the battery lawsuits.

Also on Friday, SK Innovation expressed regret and said it will strongly ask U.S. President Joe Biden to exercise his veto power over the commission's decision.

SK Innovation has been building a factory in the U.S. State of Georgia, to be completed by 2022, to provide EV batteries to Volkswagen and Ford and is building its second plant at the site. It has pledged to hire 2,600 people by 2024.

SK Innovation Co.'s electric vehicle battery plant under construction in the U.S. state of Georgia is seen in this photo provided by the company on Aug. 28, 2020. (PHOTO NOT FOR SALE) (Yonhap)

The commission's decision could jeopardize SK Innovation's promises to create American jobs and complicate Biden's push to expand EV adoption under his Green New Deal initiative.

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

SK Innovation claims that it does not need LG Energy Solution's trade secrets as its development and manufacturing method of EV batteries is different from LG energy Solution.

entropy@yna.co.kr
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