LG Chem’s LG Energy Solution and SK Innovation have announced the settlement of their legal dispute over lithium-ion battery technology in the US and South Korea.

Background

LG Energy Solution and SK Innovation commenced their respective court proceedings in 2019 alleging patent infringement (see SK Innovation’s action here and LG Chem’s action here). LG Energy Solution also filed a complaint at the International Trade Commission (ITC) alleging patent infringement and misappropriation of trade secrets.

The company succeeded in its trade secrets complaint (it obtained a 10-year importation ban in February) but failed to convince the ITC that SK Innovation infringed its patents (see the ITC’s initial determination here). The ITC published a public consultation notice (the deadline for submissions is April 30) and a final determination is expected in the summer.

 

Terms of settlement

According to a joint press release, on April 11, the companies agreed to withdraw their pending legal proceedings in the US and Korea and avoid further legal actions for a period of ten years. SK Innovation also agreed to pay $1.8 billion to LG Chem.

LG Energy Solution’s CEO Jong Hyun Kim said: "This settlement demonstrates LG Energy Solution's willingness to protect and maintain a fair and competitive climate within the EV industry. This agreement also reinforces the significance of our intellectual property acquired over the past 30 years."

 

Commentary

This was a notable dispute because of the importance of lithium-ion battery technology in the electric vehicle industry. Key players in this technical field will, of course, try to defend their position by enforcing IP and other related rights in key markets (for example, the England and Wales Court of Appeal last year handed down a judgment on a trade secrets dispute concerning this technology).

The involvement of government officials also raised the profile of the dispute. Georgia Senators Reverend Raphael Warnock and Jon Ossoff welcomed the news because the ITC order threatened SK Innovation’s battery plant and jobs in their state. It will also be seen as a boost to President Biden’s clean energy agenda. “A key part of my plan to Build Back Better is to have the electric vehicles and batteries of the future built here in America, all across America, by American workers,” Biden noted in his press release.

It remains to be seen whether these two big players will resume litigation in the US after 10 years. Perhaps this is the end of it.

 

The legal representatives

For LG Chem and LG Energy Solution: Latham & Watkins, Fish & Richardson, Adduci Mastriani & Schaumberg, and Dentons.

For SK Innovation Co and SK Battery America: Covington & Burling and Jones Day.

 

Other notable cases

Read our previous case notes here (Google v Oracle) and here (cases in Europe).