US ITC Rules "SK Inno Violated LG Trade Secrets" (Comprehensive)

In ITC Final Decision Opinion: "Clear Evidence Destruction"
"Battery Development Delayed 10 Years Without LG"
SK Inno "Insufficient Verification, Strongly Requests Presidential Veto" Protest

[Asia Economy Reporter Hwang Yoon-joo] On the 5th, the U.S. International Trade Commission (ITC) released an opinion stating that SK clearly infringed on LG Energy Solution's trade secrets in the final ruling regarding the electric vehicle battery technology leak between LG Energy Solution and SK Innovation. Earlier, on the 11th of last month, the ITC had issued a decision to ban the production and import of SK Innovation's lithium-ion batteries in the U.S. for 10 years. In response, SK Innovation argued that the ITC failed to properly investigate the trade secret infringement and stated, "We will strongly request the U.S. President to exercise the veto power." ▶Related article on page 3

On the same day, the ITC stated, "SK Innovation's evidence destruction was judged to be at an extraordinary level," and disclosed 22 trade secrets infringed, including ▲trade secrets of the entire process ▲trade secrets of the Bill of Materials (BOM) for raw materials and components ▲trade secrets of battery pouch sealing and electrolyte ▲trade secrets of pricing for specific automobile platforms. This matches the 11 categories and 22 trade secrets LG Energy Solution has claimed were infringed so far.

The ITC pointed out, "SK's evidence destruction was carried out company-wide under the direction of senior management and by organizational leaders," and added, "SK Innovation excused document deletion as a regular practice, but the deletion and concealment attempts were carried out with malice." Furthermore, the ITC stated, "If SK did not have the infringed LG trade secrets, it would not have been able to develop the relevant information within 10 years," and added, "SK did not possess the personnel or capability to develop the infringed technology within 10 years."

Regarding the final ruling, SK Innovation argued for a one-year import ban period, and the Office of Unfair Import Investigations (OUII) under the ITC proposed a minimum of five years, but the ITC ultimately decided on 10 years, which appears to stem from this judgment.

Additionally, the ITC explained the four-year and two-year import ban grace periods granted to Ford and Volkswagen respectively as "providing time for switching to other battery suppliers that did not infringe LG's trade secrets."

SK Innovation expressed regret, stating, "The ITC has never substantively verified LG's trade secret infringement claims," and announced that it will strongly request the President to exercise veto power regarding the final ruling.

SK Innovation emphasized, "LG Energy Solution and SK Innovation have different battery development and manufacturing methods, so LG Energy Solution's trade secrets are unnecessary, and based on over 40 years of independent development, SK Innovation had already signed supply contracts with global automakers as early as 2011." They also added, "The basis for calculating the periods for the products of Ford and Volkswagen, which received grace periods, is unclear," and "As is known, both companies claim that the grace periods are absolutely insufficient and that there are no alternative methods available."