LG Chem has issued a statement saying it is not in any way undermining South Korea’s interests with its ongoing legal battle with fellow electric vehicle battery maker SK Innovation.
The official remarks come after SK Innovation issued a statement of its own saying that LG Chem’s stubborn attitude towards the battery patents between the two go against national interests.
The two conglomerates came to a head this month when SK Innovation countersued LG Chem, which in April filed a pair of lawsuits against the SK unit at the US International Trade Commission and a US court for battery patent infringement.
Below is the LG Chem statement.
We hereby clarify that the latest announcements from Europe for cutting down on battery production are not new developments, and most certainly not the result of the lawsuit between LG Chem and SK Innovation as some news reports have suggested.
Recently, Germany’s Volkswagen Group and Sweden’s Northvolt both announced their intention to build EV battery factories. They also said the EU is seeking to form a second European consortium for battery production.
This has nothing to do with the legal issues between LG and SK. Volkswagen had already announced that it would be reducing its reliance on Asia, with Volkswagen CEO Herbert Diess saying last year that Volkswagen needs to become more self-reliant.
In 2017, the EU and the European Investment Bank led the efforts to create the European Battery Association to spur the R&D and manufacturing of EV batteries. The consortium formed between Volkswagen and Northvolt, along with those to come in the future, are all a part of the association’s goals.
This all indicates that the EU countries have been working for some time to manufacture their own batteries. On a side note, as Volkswagen has been pursuing joint ventures for further diversification of its battery suppliers, the firm is likely to consider partnerships with local battery makers as well. The Premium Platform Electric jointly developed by Audi and Porsche also was a move aimed at diversifying battery suppliers, and not the result of the lawsuit.
In China, it’s business as usual for LG Chem. For wider access to China, LG Chem has agreed to establish a joint venture with Chinese auto company Geely, and has also received orders from Tesla to cover its Chinese market.
To continue competing globally, we must continue to maintain a technological edge. For instance, one reason that Chinese battery makers have gained more muscle is not only due to the automakers’ diversification strategies, but also due to the growing technological prowess of the Chinese suppliers. Under the circumstances involving both China’s emergence and Europe’s growing self-reliance, they key is to remain competitive. Therefore, it’s critical that we defend and protect our know-how and corporate secrets.
If domestic companies are discouraged from taking issue with each other in terms of IP rights, then nobody will want to engage in R&D. It also does not make sense that it can undermine domestic competiveness because either way, one of the losing parties will be a South Korean firm. However, this logic does not take into consideration that any company perceiving the suit to be counter-effective would try to settle.
Further, if such IP goes unprotected, then these companies will easily become a target for foreign rivals. On the contrary, owning powerful and distinguished IP can definitely work to their advantage.
In October 2017, LG Chem sued Chinese battery maker ATL for patent infringement to get a settlement. Such lawsuits have become a common way for global firms to protect themselves and to get due recognition. Between 2009 and 2018, a total of 577 lawsuits were filed with the US International Trade Commission.
Both LG Chem and SK Innovation are open to executive-level meetings. If SK Innovation believes it really has not infringed our patents, then it can wait for the ITC results, which will come quite swiftly. If the results favor SK Innovation, it would be a chance to prove its prowess.
On the other hand, if SK Innovation has committed any wrongdoing, it would be an opportunity to own up and seek open dialogue.
The Elec is South Korea’s No.1 tech news platform.