LG, SK have crossed the Rubicon in EV battery feud
LG Chem and SK Innovation have crossed the point of no return in their escalating feud over rechargeable batteries for electric vehicles (EVs) after police conducted a search of the offices of the latter, according to industry analysts, Wednesday.
The two companies are in a legal battle in the United States, accusing each other of employee poaching and patent infringement, respectively, but the fight has spread to Korea. Officials said a meeting between LG Chem CEO Shin Hak-cheol and SK Innovation CEO Kim Jun at least provided a slim chance for future talks, but the police investigation into LG Chem’s accusation has killed that possibility.
“So far our stance has been addressing the dispute through talks, because neither SK Innovation nor LG Chem want to spend a huge amount on legal costs,” an SK Innovation official said.
“Since the police search took place abruptly, we have yet to decide whether to change this stance and be more active in fighting LG Chem’s claims, but our senior management is considering this, given LG Chem’s litigation is aimed at our employees too.”
The remarks came after the Seoul Metropolitan Police Agency searched SK Innovation’s headquarters in Jongno-gu, downtown Seoul, Tuesday, over LG Chem’s accusation that it had has stolen secret information on EV batteries.
LG Chem made the news public by revealing the detailed charges it was levelling against SK Innovation in a lengthy press release. In it, LG Chem said it filed a complaint with police in May, claiming SK Innovation had violated the Act on Prevention of Divulgence and Protection of Industrial Technology through employee poaching.
“The rival company (SK Innovation) used our corporate secrets and carried out aggressive marketing activities,” LG Chem said in the release. “Through these activities, SK Innovation has damaged the fundamentals of fair market competition.”
An LG Chem official said, “Our stance is clear that we can talk when SK Innovation makes an apology and offers compensation,” and the company will do “whatever is best for the company’s interest.”
Before LG revealed the police investigation, SK Innovation issued a statement and stressed that there was no illegality involved in hiring former LG Chem employees, saying it offered them jobs them in open recruiting sessions.
In the statement, SK said it wanted to address this issue in talks with LG Chem, but the investigation and LG’s disclosure apparently changed this.
Their dispute was ignited in April, when LG Chem filed lawsuits with the U.S. International Trade Commission (ITC) and a U.S. court against SK Innovation for allegedly stealing confidential business information through planned employee poaching.
In response, SK Innovation filed patent infringement lawsuits against LG Chem and its U.S. subsidiary, LG Chem Michigan, with the ITC and a U.S. court, and against LG Electronics with another U.S. court, Sept. 3.
In the process, LG Chem has been demanding SK Innovation apologize and provide compensation. SK Innovation has been refusing to do so and wanted to address the feud with talks to avoid “damage to the entire domestic battery industry.”
As the dispute is escalating, industry officials said a resolution through talks was unlikely.
“This shows the companies are sharing no common ground in handling the issue, and there is no turning back,” a senior official at a domestic battery company said. “Given LG Chem CEO Shin Hak-cheol’s pragmatic and business-oriented management style, SK’s logic of saving the domestic battery industry will not work at all.”
LG Chem CEO Shin Hak-cheol, left, and SK Innovation CEO Kim Jun