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SK Innovation countersues LG Chem for 1 billion won

June 11,2019
The fight between LG Chem and SK Innovation reached new heights on Monday, and this time the battlefield is going to be in Korea.

Korea’s No. 3 electric vehicle (EV) battery maker SK Innovation filed a lawsuit at Seoul Central District Court against industry leader LG Chem, claiming 1 billion won ($840,000) in damages.

In April, LG Chem filed a complaint with the U.S. International Trade Commission (ITC) to request that imports of SK Innovation batteries be halted, claiming they were produced using stolen trade secrets from former employees. The ITC launched an investigation into the claim late May.

SK Innovation has chosen to countersue LG Chem in a Korean court.

“We concluded there’s immense damage - both tangible and intangible - caused from the lawsuit and more obstacles to come as a result from it,” SK explained.

It repeated the claim that LG’s attacks were groundless and that it will not tolerate the competitor “dragging down” its business.

“The purpose of the suit is to claim damage from defamation and confirm there was no act of violating trade secrets,” SK said.

It further warned in the statement that Monday’s suit will only be the start of “strong action” against LG’s groundless criticism if it continues. If more damage is found during the lawsuit, the company will raise the compensation claimed from the current 1 billion won, it added.

SK strongly criticized LG’s U.S. suit as a “typical scattergun approach” in which the company has no sound proof but places a suit anyway to find out whether there actually was a breach of trade secrets.

“Uncertainties are escalating in the EV battery market with other countries catching up and the European Battery Alliance,” SK said, as it criticized LG’s U.S. suit as being against national interests. “It’s of utmost importance to establish market dominance. A more beneficial move for the competitor would be expanding the local industry based on well-intentioned competition.”

LG Chem immediately fought back in a statement Monday afternoon, defending its U.S. suit with the ITC as a “justifiable legal action intended to protect its rights” and technology.

It also expressed “severe concerns” over its counterpart being “naive” to regard the allegation as “ungrounded,” especially when the ITC had already decided to launch an investigation.

LG Chem accuses SK Innovation of hiring 76 of its former employees and unlawfully acquiring trade secrets, citing a captured image of an application form used in the hiring process. The form asked each applicant for information on their previously undertaken projects, duration of the work and the number of coworkers and project leaders, including their names.

SK explained the form had been drawn up in consultation with outside human resources agencies while LG argued such a format was not “normal” for any industry.

LG also called SK’s claim that its lawsuit was hurting the local industry “absurd.”

“Our technology and intellectual property are the result of long years of research and investment,” it said. “If latecomers are allowed to make use of competitors’ core technology and trade secrets, no company will be willing to invest in the future and foreign companies will try to take advantage of the practice.”

The feud comes at a time when the EV battery market is growing rapidly with high future potential. Dublin-based firm Research and Markets said in a report last month that between 2019 and 2023, the EV battery market will grow at an average speed of 23 percent per year. Market watcher SNE Research forecasts that demand will far surpass supply by 2023.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]