U.S. ITC delays decision on LG Chem, SK Innovation trade secret case

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FILE PHOTO: The logo of LG Chem is seen at its office building in Seoul
FILE PHOTO: The logo of LG Chem is seen at its office building in Seoul, South Korea, October 16, 2020. REUTERS/Kim Hong-Ji/File Photo

October 26, 2020

By David Shepardson and Heekyong Yang

WASHINGTON/SEOUL (Reuters) – The United States International Trade Commission (ITC) on Monday delayed a decision in a trade secrets case involving South Korean battery makers LG Chem Ltd and SK Innovation Co Ltd to Dec. 10.

LG Chem, an EV battery supplier for Tesla Inc and General Motors Co, filed its trade complaints against SK Innovation in April 2019 in the United States over allegations of trade secret theft, seeking to block SK from producing battery cells in the United States and importing the components necessary to make the cells. SK denied wrongdoing.

An adverse ruling by the ITC could lead to the import ban of SK Innovation’s batteries and necessary components, potentially causing setbacks for Volkswagen <VOWG_p.DE> and Ford Motor as they move to build new electric vehicles. The automakers have said the dispute between the South Korean battery makers could disrupt supplies of the key EV parts and cost U.S. jobs during the COVID-19 pandemic.

“It is clear that this delay has resulted in a longer litigation process,” SK Innovation said in a statement, adding it “hopes that the two firms could make a wise decision to wash off uncertainties caused by prolonged litigation by ending this dispute promptly and to focus on businesses.”

Bert C. Reiser, counsel to LG Chem, said the delay does not “signal an outcome that might acquit this theft.” He added the company remains “extremely confident that the commission will hold SK Innovation responsible for their theft and issue appropriate remedies to make LG Chem whole.”

SK Innovation is building two EV battery factories in Georgia to manufacture batteries for Volkswagen and Ford electric vehicles. LG Chem has set up an EV battery cell venture plant with GM in Ohio.

Roh Woo-ho, an analyst at Mertiz Securities, said the delay could indicate the ITC “is facing difficulties making the final determination on the case, considering the impact it will bring to industrial issues in the United States including job issues.”

He also noted the delay pushes a decision past the Nov. 3 U.S. election. Opinion polls show a tight race between Republican President Donald Trump and Democratic candidate Joe Biden in Georgia, with an Atlanta Journal-Constitution poll released on Monday showing Biden favored among likely voters 47% to 46%.

The ITC decision had previously been planned for Oct. 6.

(Reporting by David Shepardson in Washington and Heekyong Yang in Seoul; Editing by Sandra Maler and Grant McCool)

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