SK Innovation Facing U.S. Import Ban on its Batteries
The U.S. International Trade Commission (ITC) released on March 22 a public document regarding its recent default judgment against SK Innovation in the trade secret infringement suit filed by LG Chem.
In the document, the USITC found that SK Innovation "deliberately sought to gain LG Chem proprietary information through the interviews and subsequent employment of LG Chem personnel, and then, after receiving information, distributed it amongst its teams with the instruction to use the information for their own work."
The ITC’s default judgment against SK Innovation was based on its observation of the company’s "spoliation of evidence."
The destruction of evidence by SK Innovation not only damaged LG Chem's legal proceedings, but also hindered the judge from conducting a fair and efficient trial, according to the 135-page document.
The ITC emphasized that the default judgment decision was not only a punishment for SK Innovation, but is also intended to prevent similar violations that may occur in other cases. It noted that SK Innovation destroyed documents related to the lawsuit or left them being destroyed, even though it was subject to an obligation to preserve the evidence from April 9, 2019.
Earlier, SK Innovation raised an objection to the ITC’s initial determination on March 3. The ITC must decide whether to review the appeal by April 17. If the ITC accepts the request for a review, it is expected to decide by Oct. 5 whether SK Innovation violated Article 337 of the U.S. Customs Act and, if it did, whether to prohibit imports of its products to the United States.
If the ITC rejects the appeal, SK Innovation will be guilty of violating Article 337 of the Customs Act and the ITC will finally determine in October relevant actions and the amount of deposits for SK Innovation. If SK Innovation makes the deposit after the ITC’s final ruling, the import ban will be temporarily suspended during the 60-day presidential deliberation period.
However, according to the ITC's 2010-2018 statistics, initial determinations were held unchanged in all trade secret infringement cases. Accordingly, industry experts say that U.S. authorities are highly likely to ban imports of SK Innovation's electric vehicle (EV) battery products beginning this October.
Regarding its next steps after the release of the document, an LG Chem official said the company will seek compensation from SK Innovation, but he declined to elaborate on details.