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The US International Trade Commission has issued an order to ban the import of SK Innovation lithium-ion batteries used in electric vehicles. In an electric vehicle battery trade secret lawsuit between LG Energy Solutions (formerly LG Chem) and SK Innovation, the U.S. International Committee ordered SK Innovation to ban imports for 10 years, deciding to win LG Energy Solutions on the 10th (local time).
The International Trade Commission ruled that SK Innovation infringed on the trade secrets of parts and materials such as battery cells, modules, and packs of LG Energy Solutions. The International Trade Commission cited the default judgment issued in February last year, and SK Innovation had to accept the results it most wanted to avoid as a reality.
In its decision, the International Trade Commission stated, “For SK Innovation, the import and sale of batteries, marketing, sales, and distribution of batteries in the United States are completely prohibited, and imports through the Free Trade Zone (FTZ) are also prohibited. Prohibited items include raw materials for batteries, finished batteries, cells, modules, and packs.” SK Innovation also blocked bypass exports with this ruling. However, exceptions to the import ban for 4 and 2 years were applied to batteries for Ford and Volkswagen, which will be produced at SK Innovation’s plant in Georgia, USA, respectively.
SK Innovation needs to reach an agreement with LG Energy Solutions. It is known that SK Innovation has received orders for batteries of about 20 trillion won to US automakers so far. In addition, it is investing about 5 trillion won in Georgia, the US to build two battery production plants. For SK Innovation, it could lead to fatal losses.
LG Energy Solutions is pressured to reach an agreement with SK Innovation after the US International Trade Commission’s decision is made. Jim Farley, CEO of Ford, publicly requested an agreement on Twitter, saying, “The agreement between the two suppliers, LG Energy Solutions and SK Innovation, will ultimately be in the best interests of US (electric vehicle) manufacturers and workers.”
SK Innovation currently expects US President Joe Biden to exercise his veto. The President of the United States may exercise his right to veto the final decision of the United States International Trade Commission within two months if it is determined that it has a public purpose. However, as the Biden administration has emphasized improving unfair trade practices and protecting intellectual property rights, it is unlikely that they will exercise their veto power.
In particular, the only patent infringement lawsuit between Apple and Samsung Electronics in 2013 was the only case in which the president vetoed about 600 lawsuits conducted by the US International Trade Commission since 2010. At the time, U.S. President Barack Obama vetoed the final decision by the US International Trade Commission that “the import of Apple products is prohibited because Apple infringed on one of Samsung’s four patents”.
Reporter Kwon Chan-wook, Consumer Economic Daily
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