Shameful technology theft

Rampant illegal practice stains reputation of Corporate Korea

The legal battle between two battery makers ― LG Chem and SK Innovation ― over the latter's alleged theft of trade secrets will likely end up with SK Innovation being defeated. According to a default judgment the U.S. International Trade Commission uploaded recently on its website, SK Innovation extracted information on a detailed list of anode and cathode materials used for making electric car batteries, from LG Chem employees.

LG Chem has maintained that SK Innovation stole the battery manufacturing technology it had developed, by spending a lot of money over an extended period to recruit LG Chem employees. SK Innovation countered this by saying that the workers changed companies on their own, and SK had not stolen the technology. The latest ITC ruling, however, has undisputedly held SK Innovation responsible for theft. The battery file stolen by the former LG Chem employees who moved to SK Innovation reportedly contained core secrets on making batteries.

During the litigation process, LG Chem said SK Innovation was found to have deleted about 34,000 files and emails, and the amount of stolen information was beyond measure. In the course of interviewing and hiring former LG Chem employees, SK Innovation made them reveal core manufacturing technology, according to LG Chem. The ITC judgment also pointed out that SK began to destroy evidence after LG Chem filed an injunction in December 2017 to ban the employment of its employees by other Korean firms.

The U.S. agency's final ruling is likely to come by Oct. 5. If the two sides fail to reach an agreement and the ITC concludes SK Innovation violated the U.S. Customs Act and orders a sales ban on the Korean firm's U.S. offshoot, SK Innovation's plan to supply batteries to Volkswagen's U.S. plant will likely hit a snag.

SK Innovation has been building a battery plant for electric cars in Georgia since March last year, investing $1.6 billion. The ITC ruling has dealt a blow to the rampant practice of some Korean companies “scouting” employees from competitors, to take advantage of their skills and knowledge. The end result may depend on how the two agree. Still, the fight between the Korean companies in the U.S. could hardly look uglier.