Prime Minister Chung Se-kyun speaks with reporters in Yangcheon-gu, Seoul, Thursday. (Yonhap)
In a rare move, South Korean Prime Minister Chung Se-kyun on Thursday openly called for a swift resolution to the US court battle between LG Energy Solution and SK Innovation over battery patents, describing it as an “embarrassment.”
“Both firms should take a step back and resolve this issue swiftly,” said Chung on Thursday, answering a question from a reporter as to whether he would be willing to intervene in the matter.
“K-battery will open up a great future, so instead of fighting over a small pie, (the two companies) should create a situation where they can march on the bigger global market,” he said during the press conference in Yancheon-gu, Seoul.
His next comments were even more straightforward.
“I spoke over the phone with those responsible over the matter at both firms and met them in person. I told them, ‘Aren’t you ashamed of yourselves? How could you give concerns to the people?’ and urged them to solve the issue. However, the matter hasn’t been settled yet.”
Chung added that their feud, if allowed to continue for too long, might only benefit Japanese and Chinese competitors.
LG Energy Solution and SK Innovation await a final ruling from the US International Trade Commission, expected to be out Feb. 10. LG Energy Solution accuses SK Innovation of trade secret theft and is seeking to block the compatriot rival’s production and sales of batteries in the US.
Industry watchers say the strongly worded message from the prime minister could put more pressure on both sides to settle.
Chung’s comments echoed statements from three US politicians in December.
Reps. Earl Carter and Sanford Bishop from Georgia and Rep. Chuck Fleischmann from Tennessee urged LG Energy Solution and SK Innovation to reach a “workable, amicable and accountable resolution” in a letter sent to both companies Dec. 10
The US states of Georgia and Tennessee are where SK Innovation’s battery manufacturing plants and partner firms are located. Georgia hosts SK’s battery plant, and Tennessee is home to a Volkswagen electric vehicle assembly line, which uses batteries made by SK.
The legal wrangling between the two Korean battery makers began in April 2019, when LG Energy Solution sued SK Innovation in the USITC and the US District Court of Delaware.
In February last year, the USITC handed down a preliminary ruling in favor of LG Energy Solution, ruling by default that SK Innovation had infringed on LG’s electric vehicle battery trade secrets.
A default judgment occurs when a court rules in favor of the plaintiff because of the defendant’s failure to fulfill its responsibilities. In this case, the USITC said SK Innovation had intentionally impaired the investigation by deleting, moving, hiding and altering evidence.
If the USITC decides to uphold the default ruling, SK Innovation will have to halt shipments of electric vehicle batteries, parts and manufacturing equipment to the US, where it has an electric vehicle battery plant under construction in Georgia that is set to mass-produce batteries for Volkswagen from next year.
Following the prime minister’s remarks, SK Innovation’s battery business chief, Ji Dong-sup, said he will follow Chung’s advice.
“The prime minister’s concerns reflect the wishes of the people and I take this with utmost seriousness. SK Innovation will do our best to resolve this smoothly through a cooperative and constructive dialogue,” Ji said.
In response to Ji, LG Energy Solution responded by saying that “SK Innovation must suggest a proposition worth negotiating.”
LG Energy Solution, during a conference call a day earlier, said it was open to settling the case, but only after it hears the final ruling from the USITC.
“After the USTIC’s final ruling, the suit we had filed with the US District Court of Delaware will be resumed, where we can receive compensation for actual damages, punitive damages and attorney fees,” an LG Energy Solution official said. The official cited the case involving Motorola Solutions. Motorola recently received compensation totaling $543.7 million after the US District Court of Illinois ordered Hytera Communications to pay Motorola $135.8 million in actual damages and an additional $271.6 million in punitive damages.
By Kim Byung-wook (email@example.com)