LG, SK – Point Of No Return Over EV Battery Feud

Inside of SK Hynix's factories

A feud between LG Chem and SK Innovation over rechargeable batteries for electric vehicles (EVs) escalated further after police searched the offices of the latter, according to industry analysts, on Wednesday.

Their legal battle in the United States has spread to Korea, accusing each other of patent infringement and employee poaching. The police investigation killed the already slim possibility for future talks between LG Chem CEO Shin Hak-cheol and SK Innovation CEO Kim Jun.

“So far our stance has been addressing the dispute through talks because neither SK Innovation nor LG Chem wants to spend a huge amount on legal costs,” an SK Innovation official said.

“Since the police search took place abruptly, we have yet to decide whether to change this stance and be more active in fighting LG Chem’s claims, but our senior management is considering this, given LG Chem’s litigation aims against our employees too.”

LG Chem’s accusation of SK Innovation stealing secret information on EV batteries led to the Seoul Metropolitan Police Agency searching SK Innovation’s headquarters in Jongno-gu, Seoul.

The news was made public by LG Chem detailing charges against SK Innovation in a lengthy press release. LG Chem claims SK Innovation violated, through employee poaching, the Act on Prevention of Divulgence and Protection of Industrial Technology. LG Chem said it filed a complaint with police in May.

“The rival company (SK Innovation) used our corporate secrets and carried out aggressive marketing activities,” LG Chem said in the release. “Through these activities, SK Innovation has damaged the fundamentals of fair market competition.”

An LG Chem official said, “Our stance is clear that we can talk when SK Innovation makes an apology and offers compensation,” and the company will do “whatever is best for the company’s interest.”

Meanwhile, SK Innovation stated and stressed that there was no irregularity involved with hiring former LG Chem employees. It said it offered jobs in open recruiting sessions. In the statement, SK said it wanted to solve the issue in talks with LG Chem, but the police investigation and LG’s disclosure changed this.

LG Chem and SK Innovation’s dispute started in April when the former filed lawsuits against the latter with the U.S. International Trade Commission (ITC) claiming that SK Innovation allegedly stole confidential information through employee poaching.

SK Innovation, in response, filed patent infringement lawsuits against LG Chem with the ITC and a U.S. court. It also filed lawsuits against LG Chem’s U.S. subsidiary LG Chem Michigan and LG Electronics with another U.S, court.

Industry officials said that as the dispute escalates between LG Chem and SK Innovation resolving the issues through talks was unlikely.

A senior official at a domestic battery company said, “This shows the companies are sharing no common ground in handling the issue, and there is no turning back.” “Given LG Chem CEO Shin Hak-cheol’s pragmatic and business-oriented management style, SK’s logic of saving the domestic battery industry will not work at all.”

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