LG Chem Alleges Trade Secrets Theft, Files Federal Suit against SK Innovation

ATLANTA–(BUSINESS WIRE)–The wholly-owned US manufacturing subsidiary of LG Chem, Ltd., the
global leader in pouch-type lithium ion battery manufacturing whose
unique technology underpins a significant share of the American electric
vehicle market, filed on Monday a pair of lawsuits against South
Korean-owned SK Innovation., Ltd. for misappropriation of trade secrets,
tortious interference with prospective economic advantage and other
claims.

Brought jointly by LGCMI, the US-subsidiary, and its parent corporation,
the suits were filed concurrently with the United States International
Trade Commission and the United States District Court of Delaware.

The suits allege that defendants accessed trade secrets by SK
Innovation’s 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.

These employees include 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, of which LG Chem is the world’s leading supplier.

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 valuable trade secrets to secure
employment with SK Innovation. For example, one of these employees
inserted LG Chem’s key technical trade secret information regarding
electrode manufacturing process on his curriculum vitae for SK
Innovation. Even worse, 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 Chief Executive Officer 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.

LG Chem has already dealt with SK Innovation on a similar issue in
Korea, where it 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, holding that the actual threat
of potential disclosure of LG Chem’s valuable trade secret information
justified the enforcement of the non-compete obligations. Despite such
result, SK Innovation continued to poach LG Chem’s employees even to
this point.

About LG Chem

LG Chem is one of the world’s largest lithium ion battery manufacturers
with a market-leading position in advanced batteries for grid-scale,
residential storage and automotive applications. Its advanced lithium
ion battery technology is the product of 23 years of experience in the
development and production of mobile batteries and large-format
batteries for automotive and energy storage systems (ESS). LG Chem’s
commitment to technology leadership and its efficient, high-quality
manufacturing processes produces batteries that exhibit the very highest
levels of safety, performance and reliability.

For more information, visit http://www.lgchem.com/global/main.

Contacts

Press contact:
James Richardson
James.Richardson@Dentons.com

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