SK Innovation warns of legal action to counter LG Chem's lawsuit in U.S.

By Lim Chang-won Posted : May 3, 2019, 11:27 Updated : May 15, 2019, 09:44

[Courtesy of SK Innovation]

SEOUL -- SK Innovation warned of strong legal action if LG Chem goes ahead with undue accusations to crab competitors, insisting the key subsidiary of South Korea's third-largest conglomerate SK Group has acquired a top level of technology through consistent investment in research and development since its battery business began in 1996.

SK Innovation (SKI), a latecomer in the global battery market, took a passive and defensive attitude initially when LG Chem, the overwhelming market leader, launched an unexpected offensive this week with a legal battle in the United States, accusing its domestic rival of stealing technologies.

"If (LG Chem) does not stop the act of undermining SK Innovation, we will respond strongly and sternly with all possible measures, including legal action," SKI said in a statement on Friday in response to LG Chem's accusations that 76 core workers in its rechargeable battery business have been lured out for two years from 2017.

LG Chem, a petrochemical and battery-making arm of South Korea's LG Group, said earlier this week that it asked the U.S. International Trade Commission to ban SKI batteries in the American market and filed a lawsuit with a district court in Delaware, accusing SKI of producing batteries with technologies leaked by transferred employees.

SKI blasted LG Chem for hurting national interests by bringing a dispute over intellectual property rights to a U.S. court. LG Chem was reluctant to budge, saying that foreign competitors would do the same if the violation of trade secrets by domestic rivals is stopped.

LG Chem insisted its battery business has been the result of active investment for nearly 30 years. "No company will make bold investments for the future if a latecomer is allowed to easily acquire trade secrets of a competitor without investing in technology," the company said in a statement on Thursday.

SKI insisted it has acquired a top level of technology through an investment of more than one trillion won ($856 million) into research and development since 1996. "Because there is a huge difference in design and the method of developing production technologies, we need no business secrets of a certain competitor."

"As the electric car market is now beginning to grow, it is no help for anyone to undermine competitors at a time when we should jointly develop the value chain through competition in good faith," SKI said, adding LG Chem workers have voluntarily moved.

SK Group chairman Chey Tae-won has promised to nurture the battery business as the group's sustainable growth engine. SKI is building a battery plant in Changzhou in China's southeastern Jiangsu province. SKI's battery plant in the United States will be built in Commerce in Jackson County, Georgia. German auto giant Volkswagen has selected SKI as the fourth strategic supplier of battery cells to cover its demand in North America.
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