The South Korean battery maker LG Chem filed suit in the United States against its South Korean competitor SK Innovation yesterday for misappropriation of trade secrets and related claims.
The claims were filed separately in the US District Court in Delaware and with the US International Trade Commission.
The suits allege that SK began aggressively hiring LG employees with the intent of improperly using their knowledge to build pouch-style energy cells for large EV battery packs. The company claims that 77 scientists, engineers, and managers from LG were lured away beginning in August of 2016.
An LG press release says:
“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.”
Some ex-LG employees allegedly took between “400 and 1,900 key technical documents” with them from LG Chem data servers before joining SK.
The battery cells used in the 2019 Kia Niro EV contain some of LG’s trade secrets, according to the allegations.
“The configuration and characteristics of the SKI battery cells in the Kia Niro EV Crossover Utility indicate they were produced and/or improved upon using… LG Trade Secrets…”, according to the lawsuit filed in the district court.
The Niro EV’s battery pack design is largely identical to the pack in the Kona Electric compact crossover which is made by it’s corporate brandmate Hyundai. The primary difference is that the Kona uses cells from LG Chem and the Niro uses cells made by SK Innovation in the same shape and size and with similar energy storage characteristics.
SK Innovation is building a new $1.7 billion battery factory in Commerce, Georgia to supply Volkswagen’s assembly factory in Chattanooga, Tennessee for cars planned for 2022. LG claims that SK’s battery contract with VW results from an unfair business advantage.
LG Chem has an existing battery factory in Holland, Michigan which made cells for the Chevrolet Volt, which recently ended production, and continues to make cells for the Chrysler Pacific plug-in hybrid minivan. The factory also reportedly began making some cells for the Chevrolet Bolt EV during the past year.
Although the Holland battery cell factory makes a significant number of cells it is smaller than new factories being proposed and built recently to support the rapid expansion of electric vehicles being introduced by various carmakers in the next several years. LG hasn’t described any large expansion plans for North America recently.
“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 is seeking to potentially block batteries and battery making equipment based on its trade secrets from being imported into the US. It is also seeking monetary damages and an injunction against further use of allegedly stolen trade secrets.