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| LG Chem engineers are holding rigid-type battery packs at the company's battery manufacturing plant in Ochang, North Chungcheong Province, Sunday. Korea Times file |
By Kim Yoo-chul
"Default is the only appropriate remedy," said the U.S. International Trade Commission (USITC) regarding its recent default judgment over the bitter patent infringements fight between LG Chem and SK Innovation (SKI). The judgment was based on its observation of SKI's "spoliation of evidence."
A 135-page public document signed by USITC's administrative law judge, Cameron Elliott, a copy of which was obtained by The Korea Times, showed what the blockbuster LG Chem-SKI trade secrets misappropriation fight went through specifically, including actions and reactions by the two electric vehicle (EV) battery manufacturers.
In the document, the USITC found that SKI "deliberately sought to gain LG Chem proprietary information through the interviews and subsequent employment of LG Chem personnel, and then, after receiving information, distributed it amongst its teams with the instruction to use the information for their own work."
Since the very beginning of the dispute, LG Chem, a top-tier EV battery manufacturer claimed its patented technologies and secrets were stolen by SKI with the latter hiring the former's battery experts, "illegally," while SKI claimed its recruiting was based on an "open process."
"These examples alone are sufficient to show 'might have been' relevance to SKI's use of LG Chem trade secrets in any imported accused product. SKI's assurance that 'LG Chem has all of the evidence it needs to show any actual use of its alleged trade secrets in the accused products' is both self-serving and misses the point," the document showed.
USITC added SKI's "assertion" that "LG Chem nowhere cites evidence showing that any alleged trade secrets exists in any SKI product or process similarly misses the point of the present inquiry, which is ascertaining the nature of documents SKI destroyed that it had the duty to preserve.
The document also included other sensitive specifics of LG's claims and SKI's counterclaims over the latter's alleged theft of the former's battery secrets.
"For the reasons presented above, LG Chem's motion is granted. Respondents SK Innovation SK Battery America are hereby found to be in default, and pursuant to Commission Rule. All pending motions are denied as moot. As there are no other respondents to the investigation, and LG Chem does not seek a general exclusion order, there are no further issues in this investigation to be adjudicated. Accordingly, the investigation is hereby terminated in its entirety. This initial determination, along with supporting documentation, is hereby certified to the Commission," it concluded.
The document also elaborated "the record overwhelmingly shows both that the destroyed evidence was relevant to the issues in this investigation and prejudicial to LG Chem."
The USITC is set to make a final ruling in the case on October 5 this year. If the USITC makes it without changes from the default judgment, then SKI would be unable to import its battery cells, modules and other components and materials into the United States. At the time of the announcement of the default judgment, SKI expressed "regret" at the ruling which it said "had not fully acknowledged arguments from SKI."
Regarding its next steps after the release of the document, an official at LG Chem said it was regretful that SKI destroyed documents related to its hiding and stealing the patented technologies "for a long time" and added the company will seek compensation from SKI. But he declined to specify what type of compensation.
LG Chem supplies EV batteries to Ford Motors, Tesla and other global carmakers. Its chief rival Samsung SDI is a dominant supplier to BMW; while SKI, which was quite late in the promising EV battery market, is aiming to supply Volkswagen among others.
The SK Group's battery affiliate was on track to construct a $1.7 billion battery-production facility in Georgia, the United States, with Volkswagen procuring its batteries for vehicles manufactured at its factory in Tennessee.
