LG·SK Agree on Total 2 Trillion Won Including 1 Trillion Each in Cash and Royalties... Other Lawsuits Also Withdrawn (Update)

Agreement to End Battery Dispute with KRW 1 Trillion Cash and KRW 1 Trillion Royalties
Domestic and International Lawsuits Also to End... "Healthy Competition and Friendly Relations"

[Asia Economy Reporter Choi Dae-yeol] LG Energy Solution and SK Innovation announced on the 11th that they have agreed to settle their battery dispute with a total of around 2 trillion won, including 1 trillion won in cash and 1 trillion won in royalties. They also decided to end all ongoing lawsuits both domestically and internationally.

On the same day, the two companies jointly released a statement containing this agreement. They stated, "We have agreed to terminate all battery disputes currently underway at the U.S. International Trade Commission (ITC)," adding, "Accordingly, all litigation procedures that have been ongoing since April 2019 have been concluded."

Previously, following the ITC decision in February, SK was scheduled to be prohibited from exporting batteries or related components to the U.S. starting from the 11th (local time), but this ITC measure has been nullified by the current agreement. The agreement was reached dramatically just one day before the deadline for U.S. President Joe Biden's veto decision.

According to the agreement, SK, which was found to have infringed on trade secrets, will pay LG 2 trillion won. The payment method and timing were not disclosed in detail. Regarding royalties, it is expected that they will be linked to the scale of SK's battery sales in the U.S., as in previous cases.

Furthermore, they decided to drop all ongoing lawsuits both domestically and internationally. The two companies are currently engaged in patent infringement litigation at the U.S. District Court for the District of Delaware. They also agreed not to pursue any additional disputes for the next 10 years.

Kim Jong-hyun, President of LG Energy Solution, and Kim Jun, President of SK Innovation, expressed gratitude to the Korean and U.S. governments for mediating the agreement process, stating, "We have agreed to engage in healthy competition and friendly cooperation for the development of the electric vehicle battery industry in both Korea and the U.S."

They also stated, "In particular, we will jointly strive to strengthen the battery supply chain and promote eco-friendly policies as pursued by the Biden administration in the U.S."