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Korean Government Going between SK and LG Groups to Prevent Battery War
Two Groups Likely to Resolve Dispute out of Court
Korean Government Going between SK and LG Groups to Prevent Battery War
  • By Michael Herh
  • September 4, 2019, 11:41
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The Korean government is going between the LG and SK Groups to prevent a battery war.

The Korean government is actively moving behind the scenes to stop a battery war between LG Chem and SK Innovation. LG Chem filed a complaint against SK Innovation with the U.S. International Trade Commission (ITC) in April for encroaching upon its battery trade secrets and SK Innovation recently said that it would file a counterclaim with the ITC against LG Chem.

Cheong Seung-il, deputy minister of trade, industry and energy, recently met with top executives of the LG Group and the SK Group to listen to their opinions related to the lawsuit.

Although the lawsuit could determine who was right and who was wrong, it should not harm the Korean battery industry as a whole, Cheong was quoted as saying. Cheong also asked them to open a behind-the-scenes channel for dialogues.

"The government is closely watching the legal battle between the two companies," a government official said. The government's intention is not to find out who was right and who was wrong, but to prepare a negotiation table for the two companies if there is room for reaching an agreement out of court, the official said. “If the lawsuit has a negative impact on the Korean secondary battery industry as a whole, the Korean government has no choice but to take strong action,” the official added.

“However, this is not the time for the government to step forward for arbitration,” the official said. This is because the trial process has not yet begun, and the two companies are locked in an eyeball-to-eyeball confrontation.

In fact, a preliminary ruling by the ITC is expected to come out in June next year, and the discovery process will be completed later this year. The discovery system forces parties in a lawsuit to disclose evidence they have.

The government carefully predicted that both sides could agree before the ITC preliminary ruling in the light of past precedents. "The litigation between the two companies may be a natural process of arriving at an agreement when compared to the past patent litigation between Samsung and Apple," the official said.

In fact, both sides have begun to mention the word “dialogue” little by little recently. “We are always keeping our door to a dialogue open as we believe that it is more productive to proactively try to solve the problem through a dialogue and cooperation,” SK Innovation said on Aug. 30. LG Chem did not reject the proposal. But LG Chem suggested a sincere apology and a promise to prevent recurrence from SK Innovation and a discussion of compensation measures as vital prerequisites for a dialogue.