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LG Chem, SK Innovation square off again

LG Chem Ltd. and LGCMI, its U.S. subsidiary, jointly launched two lawsuits on Monday against South Korean-owned SK Innovation Ltd. for misappropriation of trade secrets, tortious interference with prospective economic advantage, and other claims.

The suits were filed concurrently with the United States International Trade Commission and the United States District Court of Delaware. According to a story filed on BusinessWire, LG Chem is alleging that SK Innovation accessed trade secrets in its hiring of 77 highly skilled and experienced employees in the lithium ion battery division of LG Chem, which developed the world’s first commercial pouch-type Li-ion battery for automobiles. This technology has been adopted by automotive manufacturers worldwide as well as other consumer electronics applications. Among the 77 employees are dozens of engineers involved in the research and development, manufacturing and assembly, and quality assurance testing of Li-ion batteries, including the newest and most advanced generation battery technology. The lawsuits allege that a significant number of these workers engaged in the theft of LG Chem’s trade secrets to benefit SK Innovation in the development and manufacturing of pouch-type Li-ion batteries. An internal audit of company communications and other data revealed that these employees openly conspired not only to steal LG Chem’s trade secrets but to leverage that information in employment considerations before SK Innovation. Applications and curriculum vitae, written specially for SK Innovation and stored on LG Chem computers, found these employees traded in LG Chem’s trade secrets to secure employment with SK Innovation. In one example, one employee inserted LG Chem’s key technical trade secret information regarding electrode manufacturing process on his curriculum vitae for SK Innovation. Additionally, the suit alleges, some of these employees downloaded 400 to 1,900 key technical documents from LG Chem’s data server before their move to SK Innovation. Coincidentally, from the end of 2016 – when the move of these 77 employees began – to the beginning of this year, SK Innovation’s aggregated amount of EV battery supply in contract has increased by more than fourteen times. “SK Innovation has taken LG Chem’s highly skilled engineers and other critical business services staff, thereby gaining access to LG Chem’s highly valued lithium ion battery trade secrets. As a direct consequence of that theft, SK Innovation has begun manufacturing and selling imitation Li-ion batteries to LG Chem’s customers and prospects across the world,” Hak Cheol Shin, vice chairman and CEO of LG Chem, said. “SK Innovation’s blatant disregard for the rule of law damages the integrity of the free market and disrespects the innovators whose blood and sweat created a technology that’s proven vital to a greener world.” LG Chem is seeking injunctive relief to cease any importation of Li-ion batteries, including both commercial Li-ion battery cells and modules, and to bar SK Innovation from importing the manufacturing and testing equipment necessary to build Li-ion batteries, as the machinery similarly relies on LG Chem’s trade secrets. Additionally, the company is seeking to prevent further disclosure and use of trade secrets and significant monetary damages. The two parties have tangled previously in a similar issue in Korea, where LG Chem sued five of its former employees who moved to SK Innovation for breach of their non-compete obligations. The Supreme Court of Korea ruled in favor of LG Chem, finding that the actual threat of potential disclosure of LG Chem’s valuable trade secret information justified the enforcement of the non-compete obligations.
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June 17 2019 9:26 pm V13.3.21-2