Final ruling by the United Stated International Trade Commission (ITC) on a trade secret infringement case of LG Chem and SK Innovation regarding electric vehicle battery has been postponed again until December. Although this will be the second postponement, the ITC did not disclose a clear reason why it decided to postpone a final ruling once again. Some believe that the commission decided to postpone its final ruling because both companies are carrying out large-scale investments in the U.S. as the presidential election approaches. Apart from the ITC deciding to postpone its final ruling, both companies have shown intentions to carry out separate conversations to reach an agreement.
On Monday, the ITC decided to postpone its final ruling regarding the case between LG Chem and SK Innovation until December 10. This will be the second time that the commission is postponing its final ruling after it already postponed it on October 5. The commission did not explain about a possible background and reason to why it decided to postpone the ruling once again.
LG Chem and SK Innovation interpreted the recent postponement differently.
“The second postponement tells us that the commission is looking into the case very deeply.” said SK Innovation. “We are going to continue to take a fair and honest approach to the case regardless of the recent postponement.”
LG Chem explained that the ITC decided to postpone its ruling due to the COVID-19 because the commission did not disclose any clear reason why it decided to postpone ruling twice. Its explanation comes from the fact there was already a case that got postponed four times due to the COVID-19.
“The recent postponement does not indicate that the ITC decided to reverse its ruling on early defeat by SK Innovation.” said an U.S. attorney who represents LG Chem. “We are certain the ITC will come up with a wise ruling.”
The case between the two companies started when LG Chem made a claim in April last year that SK Innovation took away trade secrets that were directly connected to LG Chem’s contracts while SK Innovation was going through a hiring process.
During a preliminary hearing, the ITC ruled an early defeat on SK Innovation. However, SK Innovation stated that the ruling was regarding its suspicion of destroying evidences and not infringing LG Chem’s trade secrets.
The industry believes that it is likely that LG Chem will win the case due to the fact that there has never been a case when the ITC’s preliminary ruling was reversed. It also believes that the two postponements by the ITC are largely related to the presidential election. SK Innovation announced its plan to invest $5 billion in Georgia where it is largely a republican state. Its investment will create thousands of jobs.
Chairman Choi Tae-won of SK Group once announced that the construction of SK Innovation’s electric vehicle battery production plant in Georgia is a mega project that will create around 6,000 jobs.
SK Innovation are currently building two plants with a $2.5 billion investment. It also announced its plan to make a preemptive investment in third and fourth plants. This indicates that SK Innovation plans to make investments first and secure projects afterwards rather than securing projects first and making investments afterwards. From the U.S. Government’s perspective, this is a welcoming news. However, it will be practically impossible for SK Innovation to operate its Georgia plants if it loses the case against LG Chem.
Because LG Chem has partnered up with GM and is building a $2.66 billion (3 trillion KRW) plant in Ohio and is planning to make additional investments as well, the ITC is facing a burden to take somebody’s side. Some say that this is the reason why the ITC decided to postpone its final ruling the second time.
Some also say that the ITC is giving a signal that the two companies need to resolve the issue through separate conversations.
One expert from the industry said that the ITC is practically telling the two companies that it will not provide a final ruling and that they need to resolve the conflict on their own.
Both companies are open to having conversations to reach an agreement. LG Chem stated that there are always opportunities for conversations as long as SK Innovation is sincere about the issue while SK Innovation stated that it hopes the two companies are able to resolve the conflict soon and focus on their respective businesses.
Staff Reporter Kim, Jiwoong | jw0316@etnews.com