Launch of New LG Battery Subsidiary... New Phase in LG-SK Litigation

[Asia Economy Reporter Park So-yeon] Attention is focused on whether the trade secret infringement lawsuit between LG Chem and SK Innovation at the U.S. International Trade Commission (ITC) will enter a new phase coinciding with the launch of LG Chem's battery subsidiary, 'LG Energy Solution.' Although the industry acknowledges that the long-running lawsuit has deeply entrenched animosity between the two parties, there is also hope that negotiations may resume with the launch of LG Energy Solution, potentially leading to a dramatic settlement.

According to industry sources on the 30th, the battery-related lawsuit that LG Chem has been pursuing against SK Innovation in the U.S. for over a year and a half will be taken over by LG Energy Solution, which is set to launch on December 1.

SK Innovation is expected to resume settlement negotiations regarding the battery lawsuit simultaneously with the launch of LG Energy Solution. It is reported that SK Innovation plans to enter full-scale renegotiations, considering that issues related to LG Group's battery spin-off and affiliate separation have been largely resolved. SK Innovation needs to complete negotiations by the first half of next year at the latest to begin operating its U.S. plant from early 2022.

The battery industry places its hopes on President Kim Jong-hyun playing the role of the top decision-maker at LG Energy Solution. President Kim is regarded as a first-generation executive of the 'K-battery' industry who contributed to the global growth of Korea's battery sector, possessing both practical capabilities and political acumen. Having worked in LG Group's Chairman's Office, LG Chem's Corporate Strategy Division, and Battery Business Division, he helped develop LG Chem into a global leading company. He also served as chairman of the Korea Battery Industry Association for two years starting in 2018, establishing extensive industry connections.

LG Chem maintains that the launch of the subsidiary will not significantly change the current stance on the lawsuit but remains open to the possibility of a settlement. An LG Chem official stated, "Regardless of the subsidiary launch, the essence of this lawsuit is to protect the rights to core technologies and trade secrets accumulated through massive investment and dedication over 30 years and to foster a healthy industrial ecosystem." He added, "If objective evidence that satisfies shareholders and investors is presented, the door to dialogue is always open."

Meanwhile, there is a considerable possibility that the ITC's final decision scheduled for the 10th of next month will be delayed again. This is due to the severe spread of the novel coronavirus (COVID-19) in the U.S., with recent outcomes of other ITC lawsuits also being continuously postponed.