Patent Infringement Lawsuit Likely to Reach Supreme Court... Signs of Prolonged Conflict Between LS and Daehan Over Electric Wires

Second-Instance Ruling in 'Patent Infringement' Lawsuit
Daehan Cable Intends to Appeal: "Will Review Decision"
Kia Motors Lawsuit Already Under Supreme Court Review
LS Cable & System Filed Supreme Court Appeal in January
Police Investigating Technology Leakage Related to HVDC Plant

The conflict between LS Cable & System and Daehan Cable, the leading companies in South Korea's cable industry, which has recently intensified following allegations of technology leakage and patent infringement, appears set to deepen further following the second-instance ruling on the 'patent infringement' lawsuit issued on the 13th. Both companies, entangled in multiple disputes, are expected to take this case to the Supreme Court for a final judgment, suggesting that the legal battle will be prolonged and the conflict will deepen, according to industry analysis.

LS Cable

One of the representative cases between LS Cable & System and Daehan Cable, the 'patent infringement' lawsuit, received its second judicial ruling that afternoon. However, Daehan Cable has expressed its intention to appeal, indicating that the case will likely receive its final judgment at the Supreme Court.

The 24th Division of the Patent Court (Chief Judge Woo Seong-yeop) held the second-instance verdict hearing at 2 p.m. that day and ruled that Daehan Cable must pay LS Cable & System 1.5 billion KRW in damages. This amount is nearly four times the 490 million KRW awarded in the first instance.

In 2019, LS Cable & System filed a lawsuit claiming that Daehan Cable infringed on its patented technology by manufacturing and using joint kits for bus ducts. A bus duct is a power distribution facility that delivers electrical energy within buildings. The joint kit is a component that connects bus ducts, and LS Cable & System's patent applied to some parts of this joint kit. Daehan Cable argued that it had been using the joint kit for several years and that many prior patents already existed in countries such as the United States and Japan. Therefore, LS Cable & System's patent was merely a modification of prior inventions, and Daehan Cable claimed it did not infringe on the patent.

However, in January 2022, the first-instance court accepted some of LS Cable & System's claims and ordered Daehan Cable to pay 490 million KRW, which is 12% of the 4 billion KRW claimed by LS Cable & System. Both companies appealed: Daehan Cable on the grounds that it did not infringe the patent, and LS Cable & System arguing that the damages awarded were grossly insufficient.

After the ruling was announced, LS Cable & System appeared to accept the outcome, while Daehan Cable stated, "We will carefully review the judgment and decide whether to appeal," indicating that the case will not be settled by this ruling. Daehan Cable also said, "We have consistently argued that prior patents similar to LS Cable & System's registered patent already exist in the U.S., Japan, and other countries, making it a freely usable technology lacking inventiveness and novelty. Furthermore, the problem-solving principles and operational effects of the two products are not identical, so it does not constitute patent infringement. It is regrettable that these points were not recognized. We believe there are issues with the judgment on the problem-solving principles and operational effects under patent law, as well as with the calculation of damages."

Daehan Electric Wire

If Daehan Cable appeals this case to the Supreme Court, the number of lawsuits between the two companies to be judged by the Supreme Court will increase to two. LS Cable & System and Daehan Cable were sued by Kia Motors in relation to a power outage incident at Kia Motors' Hwaseong plant in September 2018. Kia Motors filed a lawsuit in June 2019, claiming severe damages due to the shutdown of six vehicle production lines caused by the power outage, and sought damages from LS Cable & System, which installed the transmission lines, and Daehan Cable, which supplied the materials. Both the first and second instances recognized sole responsibility for the negligence in construction on the part of LS Cable & System and awarded damages only against LS Cable & System. The case is currently under Supreme Court review following LS Cable & System's appeal in January.

Since June last year, the police have been investigating allegations of technology leakage during the architectural design process of the high-voltage submarine cable (HVDC) plant in Dangjin, Chungnam Province, involving LS Cable & System and Daehan Cable. The Industrial Technology Security Investigation Unit of the Gyeonggi Nambu Provincial Police Agency has registered A Architectural Office, which participated consecutively in the construction of both companies' plants, on charges including violation of the Unfair Competition Prevention Act. According to the police, this office was responsible for the architectural design of LS Cable & System's HVDC plant from 2008 to 2023 and later took charge of constructing Daehan Cable's first submarine cable plant. The plant was completed and opened on June 3. The police suspect that the office leaked submarine cable-related technologies secured during the design of LS Cable & System's plant while designing Daehan Cable's plant. It is also reported that the police are investigating whether Daehan Cable was involved in this matter.