The chief executive of LG Chem Ltd. said on Thursday that the company will sternly deal with SK Innovation Co. in the battery technology trade secret infringement case and vowed to demand its rival pay “due compensation.”
The strong remarks by LG Chem Vice Chairman and CEO Shin Hak-cheol indicate the slimmer chance of a possible settlement between the two sides out of court.
“From my global business experience over the last three decades, the ITC’s ruling and its mentioning of (SK’s) corporate culture underlines the gravity of the matter,” Shin said at LG’s annual shareholders’ meeting.
“At a time when global companies are quickly embracing ESG (environment, social and governance) management standards, respect for intellectual property rights and trade secrets is basic in running a company. We can’t just turn a blind eye to the matter and move forward.”
He also said he will do his best to enhance LG’s corporate value and protect the interest of its shareholders and investors by taking the right action to receive “reasonable” compensation from SK.
LG Chem is the parent of its wholly owned electric vehicle battery-making affiliate LG Energy Solution Ltd.
The two South Korean EV battery makers are currently locked in a legal battle in the US over allegations of misappropriation by SK of LG's battery-related trade secrets.
Last month, the US International Trade Commission ruled in favor of LG Energy in the legal battle. Under the final verdict, the SK Group unit will be banned from importing some lithium-ion batteries and their components to the US over the next 10 years, rendering it almost impossible to run its battery plants in Georgia.
The decision is subject to President Joe Biden's approval by April 11. The US president has the power to veto the ruling after a 60-day review period.
SK Innovation is currently constructing two battery plants in Georgia. The first plant is scheduled to begin operations in the first quarter of next year, with the second plant set to begin mass production in 2023.
LG Chem Vice Chairman and CEO Shin Hak-cheol speaks at the shareholder meeting. NO COMPROMISE, NO BIDEN VETO PUT SK'S GEORGIA PLANT AT RISK
If the US president does not veto the ruling or the two Korean companies fail to reach a compromise within the review period, SK’s battery plant construction plan could be put in jeopardy.
The two sides earlier tried to find ways to resolve the row, but failed largely due to a wide gap over the settlement amount.
LG Energy is demanding around 3 trillion won ($2.7 billion) in compensation, while SK is said to be limiting its payment to 1 trillion won.
Earlier this month, SK Innovation’s board members advised the company not to accept LG’s demand. They also reprimanded SK’s top management for failing to properly handle the judicial proceedings in the US, saying that the ITC didn't touch on the core issue of the dispute.
In its battle against LG, SK recently hired Sally Quillian Yates, a US attorney for the northern district of Georgia, as its business adviser. She served as the US deputy attorney general under the Obama administration.
SK has also sent Kim Jong-hoon, the company’s board chairman and former trade minister of Korea’s foreign affairs ministry, to the US to discuss ways to persuade President Biden to exercise his veto right over the issue.
SK has said the closure of the Georgia factory would cost Americans jobs and disrupt the crucial EV supply chain in the US.
Write to Man-Su Choe at bebop@hankyung.com In-Soo Nam edited this article.
