LG sues SK, alleges stolen trade secrets used to make Kia Niro and future VW batteries

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.

See also: Exclusive: details on Hyundai’s new battery thermal management design

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.

 

Advertisements


Categories: Battery

Tags: , ,

7 replies

  1. This could be a difficult case to prove, unless they have definitive evidence relating to documents.

    While you can protect designs and ideas with patents, it is something else to prevent a person using their knowledge to work, however that knowledge was achieved. In other words, if a person works for battery company A and he happens to know how to make a battery in a certain way, if he then starts working for battery company B he cannot be expected to ‘forget’ that ability. Indeed, it would be the principal reason he would be hired.

    Of course, the manner of transferring that knowledge is the key, but unless LG have that definitive proof I suspect their case will fail.

    Like

  2. How do you have a quote from the lawsuit? (The quote referring to the Niro EV) It is not in the news article you link to. and when you do a search for the court documents you find that they are confidential.
    www(dot)usitc(dot)gov/3383(dot)htm

    Like

  3. Thanks. Getting hold of the actual lawsuit is great. None of the major news organizations had bothered to go to the actual source for their material. They all just quote the press release.
    I had tried and failed to find the lawsuit at the United States International Trade Commission.
    You succeeded at the Delaware Court.

    I follow the news and write about SK Innovation battery technology. I live in Korea and currently own two cars that contain SK batteries. A Hyundai Blueon Electric, and a Kia Soul EV. Reading this lawsuit make it sound like LG Chem has always been ahead of SK Innovation. Yet the Hyundai Blueon Electric was the first EV in Korea. The Kia Soul EV was the first EV to use NCM 622. And the Kia Niro EV is the first EV to include NCM 811 in its battery. The lawsuit twists the facts to claim that, because LG Chem has 30 years of experience making batteries for consumer electronics, it is has always been ahead in EV battery tech.

    I don’t think the Niro EV quote mention is really important to this lawsuit. The motivation for this dispute is clearly Volkswagen.
    “”…
    LGC is informed and believes that many of the Former LGC Employees had worked specifically on
    products and technologies concerning Volkswagen automobiles, one of LGC’s key and emerging
    customers in the EV market, and its modular electric toolkit (known as the “MEB”)6 platform for
    electric vehicles…””

    Liked by 1 person

    • How do we know that the Niro EV cells are NMC 811? I had the impression that early reports claimed they would be 811 but then Kia rejected the test cells after testing them and the cells used in production were actually more conventional 622 cells or perhaps a hybrid design that wasn’t quite 811. Or something like that. The actual performance characteristics don’t seem all that different between the SKI and LG cells as far as I can tell based on their use in the Kona and Niro and the claimed performance and energy specifications.

      It’s hard to know because the battery makers don’t want to talk about their design details.

      Like


  4. Details of the cell chemistry for the Niro EV have not been been well publicized. The only info I have is from the Korean press.And note in my previous comment I said the cell included NCM811. It is a mix of chemistries, one of which is NCM811, that ends up being equivalent to NCM622. The Niro EV does not have the same battery cells as the Hyundai Kona Electric.They are equivalent. Kia is more protective of their battery than Hyundai, presumably because they are less sure how it will behave in the long term.

    SK Innovation had built the new production line for NCM 811 on the assumption that it would be used in the Niro EV.( reported here on July 1st 2018 – www(dot)etnews(dot)com/20180629000290)

    Kia rejected NCM 811 at the last minute ( reported here on July 17th 2018 – www(dot)jejutwn(dot)com/news/article.html?no=9326)

    In this article we find out that “”the new battery is NCM622 equivalent – made by mixing two different chemistries NCM811 and NCM111″” (www(dot)hkbs(dot)co(dot)kr/news/articleView.html?idxno=475921)
    This article also states that the first full NCM811 powered EV would be available this year – 2019. That must either be the Mercedes EQ or the new Soul EV.

    Liked by 1 person

  5. If anyone is actually interested in the reality of this lawsuit rather than just hearing the PR fluff from both sides the best article I have seen so far is here – www(dot)businesspost(dot)co(dot)kr/BP?command=article_view&num=129594

    Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: