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LG Chem sues SK Innovation for Infringing Secondary Battery Trade Secrets
Filing lawsuits with U.S. Courts
LG Chem sues SK Innovation for Infringing Secondary Battery Trade Secrets
  • By Jung Min-hee
  • April 30, 2019, 16:28
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LG Chem has taken legal action against SK Innovation in the United States, saying its key technologies related to secondary batteries have been leaked to SK Innovation.

LG Chem said on April 30 that it has filed a complaint with the U.S. International Trade Commission (ITC) and a local court in Delaware against SK Innovation for "infringement of trade secrets."

LG Chem asked the ITC to ban SK Innovation from importing cells, packs and samples into the U.S., and filed a compensation suit with the district court in Delaware, where the U.S. subsidiary of SK Innovation's battery business is incorporated.

LG Chem claimed it has found evidence that its secondary battery-related core technologies have been leaked to SK Innovation since 2017.

LG Chem said it has sued SK Innovation in the United States because the discovery procedure of the U.S. ITC and federal courts makes it difficult for a litigant to conceal evidence. Discovery is a pre-trial procedure in which each party can obtain evidence from the other party or parties by means of discovery devices such as interrogatories, requests for production of documents, requests for admissions and depositions.

LG Chem asserted that SK Innovation pulled 76 key employees from all areas, including research and development, production, quality control, procurement and marketing, of LG Chem's battery business headquarters for two years from 2017. They included officials who participated in the next-generation electric car project that LG Chem was carrying out with a specific automaker.

It also said that SK Innovation is hiring more key LG Chem employees who could leak core technologies.
SK Innovation's employment application documents released by LG Chem asks the applicant to write down details of the work they carried out at LG Chem and the real names of the project leaders and other employees who worked together for the projects.

For example, applicant A's job application documents describe the details of LG Chem's project related to the electrode manufacturing process, ranging from the current state, background and purpose of the project to suggestions to improve the result.

LG Chem claimed that the applicants colluded in a group to leak LG Chem's core process technologies, and downloaded some 400-1,090 documents related to key technologies per individual from the company system before the transfer.

In October 2017 and this month, LG Chem sent a content-certified official document to SK Innovation asking it to "stop the hiring process for personnel who are highly likely to leak business secrets and technology information."

It also warned that it will consider legal action if "any violation of business secrets is found or there is a risk of leaking business secrets."

“Despite such requests for restraint, it seems that SK Innovation is using business secrets leaked from the recruitment process of key personnel to develop secondary batteries and win orders,” LG Chem said, adding that it has decided to take legal action because such actions continue even now.

"This case is beyond the scope of personal freedom to choose jobs, and hiring a large number of key personnel from LG Chem's secondary batteries and to systematically obtaining trade secrets constitutes a serious violation of the law," LG Chem said.

Earlier this year, LG Chem finally won a lawsuit it filed in 2017 against five key employees who moved to SK Innovation. The court banned the employees from working for SK Innovation for two years in recognition of the possibility of business secret leaks and the gap in technology capabilities between the two companies, and the verdict was confirmed by the Supreme Court.

Regarding the lawsuit in the United States, the ITC will make a preliminary ruling in the first half of next year and a final ruling in the second half of the year if it decides to launch a probe this month.

"LG Chem's secondary battery business has been achieved through bold investment and dedication for nearly 30 years since the early 1990s," said Shin Hak-chul, vice chairman of LG Chem. "The lawsuit is an inevitable step to protect core technologies and intellectual property rights secured by long-term research and huge investments from the rival companies and to develop a sound industrial ecosystem with legitimate competition."

SK Innovation protested the move, saying that it raised unnecessary issues about a company's legitimate business activities.

SK Innovation said its battery business employs experienced workers at home and abroad through transparent open recruitment methods, and its employees voluntarily decided to work for SK Innovation, taking into account improved treatment and the possibility of future development.

SK Innovation also expressed regret for LG Chem taking domestic issues to the court of the United States, saying that it could undermine national interests.

"We have been doing business through fair competition based on transparency and win-win," said SK Innovation. "We will clearly identify the issues raised by LG Chem and clarify them through necessary legal procedures."