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Battery dispute

ITC rules in favor of SK Innovation over LG Energy in US battery patent suit

Apr 01, 2021 (Gmt+09:00)

SK Innovation's EV battery plant under construction in Georgia
SK Innovation's EV battery plant under construction in Georgia

The International Trade Commission (ITC) has ruled in favor of SK Innovation Co. in a US battery patent suit filed by LG Energy Solution Ltd., which previously won a separate complaint against the Korean rival in a trade secret stealing case.

The ITC’s preliminary decision helped SK Innovation shares surge nearly 15% on the Korean bourse Thursday -- their biggest percentage gain in three months. The ruling is also expected to provide a tailwind for the planned initial public offering of SK IE Technology Co. (SKIET), a battery materials subsidiary of SK Innovation.

The ITC said on Wednesday (US time) that SK Innovation did not violate LG Energy Solution’s battery-related patents.

The US trade panel’s initial determination is a response to LG Energy’s filing in September 2019 of an allegation that SK infringed upon four of LG’s US patents for lithium-ion battery technology.

The ITC’s ruling effectively denies LG’s request to ban SK Innovation from importing materials with the lithium-ion battery technology in question into the US, according to an SK statement issued in Seoul on Thursday.

“We spent years developing SK’s lithium-ion battery technology and fully expected the ITC to confirm that SK’s technology was not violating patent rights in the US as asserted by LG,” SK Innovation said in the statement. “Wednesday’s decision recognizes SK’s unique and innovative technology.”

LG Energy Solution expressed regret over the ITC’s initial ruling, but said it respects the decision.

“With remaining procedures, we plan to study the details of the initial ruling to better prove the infringement of our patents,” it said.

The preliminary ruling is subject to a review by the ITC’s full commission and the trade panel is expected to announce a final decision for the case on Aug. 2.

SEPARATE TRADE SECRET CASE AWAITS BIDEN’S DECISION

Shares of SK Innovation were trading up 9.6% at 240,000 won in the late afternoon session, off its intraday high of 251,000 won. LG Chem Ltd., the parent of LG Energy, was up 1.6% at 818,000 won.

In a separate previous ruling, the ITC sided with LG Energy, recently spun off from LG Chem.

The two South Korean EV battery makers have been locked in a legal battle in the US over several cases, including the allegation of misappropriation by SK of LG’s battery-related trade secrets.

ITC rules in favor of SK Innovation over LG Energy in US battery patent suit 

Last month, the ITC ruled in favor of LG Energy over the trade secret case. Under its final verdict, the SK Group unit will be banned from importing some lithium-ion batteries and their components to the US over the next 10 years, rendering it almost impossible to run its battery plants in Georgia. The decision is subject to President Joe Biden's approval by April 11. The US president has the power to veto the ruling after a 60-day review period.

LG is seeking at least 3 trillion won ($2.7 billion) in compensation over the trade secret case, but SK has flatly rejected the demand, saying accepting LG’s demand would render its US business “meaningless.”

SK, which is seeking to reverse the ITC’s ruling over the trade secret issue, plans to take the case to the US Court of Appeals for the Federal Circuit if it fails to persuade President Biden to exercise his veto power.

LATEST ITC RULING TO AID SKIET IPO

ITC rules in favor of SK Innovation over LG Energy in US battery patent suit 
Analysts say the latest ITC ruling will clear the way for SK’s plan to list SK IE Technology (SKIET), which makes lithium-ion battery separators. Its IPO review has made little progress due to a legal risk involving the separator technology patent.

SKIET said on Wednesday that it will start the IPO process for its Kospi market debut in May.

The battery materials unit plans to float 21.39 million shares, or 30% of its total outstanding shares, on the main bourse through the IPO, with an indicative price range of 78,000 won and 105,000 won, which would lift the company’s corporate value to 7.5 trillion won.

For the IPO, SKIET plans to issue 8.55 million new shares, while SK Innovation will sell 12.83 million SKIET shares it holds.

SK Innovation and SKIET hope to raise as much as 2.3 trillion won from the IPO and spend the proceeds on expanding the battery separator business.

Earlier this week, SKIET said it will build two additional battery separator plants in Poland to meet rising demand for electric car batteries. The project, valued at around 1.2 trillion won, marks SKIET’s single largest investment.

Write to Man-Su Choe at bebop@hankyung.com

In-Soo Nam edited this article.

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