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US International Trade Commission Affirms Latham’s Electric Trade Secret Win for LG Energy Solution

February 16, 2021
In a precedent-setting decision, ITC issues a 10-year exclusion order precluding competitor SKI from importing batteries or components used to make batteries in the US for electric vehicles.

Almost a year ago, Latham obtained a default judgment from an administrative law judge (ALJ) at the US International Trade Commission on behalf of our client LG Chem, now LG Energy Solution (LGES), against SK Innovation (SKI), as a sanction for widespread document spoliation and violation of a court order related to the forensic investigation of that spoliation. LGES is a leading manufacturer of automotive electric vehicle batteries, with a plant in Holland, Michigan, and a new US$2 billion+ plant under construction in Lordstown, Ohio, in joint venture with General Motors. SKI lured away approximately 100 of LGES’s employees and engineers to build its electric vehicle (EV) battery business using LGES’s trade secrets that cover every aspect of EV battery design and manufacture. Latham took the lead on this case months into discovery. As Latham dug into the case, the team determined that SKI had engaged in a widespread effort to destroy or conceal unknown thousands of relevant documents, and moved for default judgment as a sanction. The ALJ granted Latham’ motion in a 132-page decision, finding that its spoliation was intentional and had prevented LGES from having a fair chance to prove its case.

On February 10, 2021, after significant public interest briefing, almost a year and three delays in the FD date, the ITC issued a similarly detailed final determination, affirming the initial determination and issuing a 10-year exclusion order, that LGES sought, which precludes SKI from importing batteries or components used to make batteries. It offered very limited carve-outs for three existing customers of SKI, and required SKI to seek a ruling from the Commission as to any allegedly “designed-around” products.

The implications of the judgment, which has been widely covered by the Korean press, as well as the legal, automotive, and environmental press in the US, are profound. At stake is the future of SKI’s US$2 billion+ investment in its battery factory in Georgia, as well as market leader status in the US for electric vehicle batteries, which is currently projected to grow from some US$15 billion annually today to about US$95 billion annually by 2026.

The global Latham team, which came from nine offices across the world, is led by Chicago partner David Callahan, Washington, D.C. partner Bert Reiser, Bay Area partner Jeff Homrig, Orange County counsel Joe Lee, Washington, D.C. counsel Sarah Gragert, and New York counsel Michael David. Hong Kong/Seoul partner Steve Kang provided invaluable assistance. The team also includes Boston associate Nate McPherson, Tokyo associate Jun Park, Washington, D.C. associate Lauren Stanley, Chicago patent litigation attorney Dale Chang, Bay Area patent litigation attorney Lin Tzeng, San Diego associate Tom Watson, Bay Area associate Emre Yuzak, Chicago associates Kumar Ravula and Renatta Gorski, Washington, D.C. associate Jeremiah Egger, New York associate David Suh, and Orange County associate Bradley Hyde. Bay Area partner Gabe Gross played a significant role in briefing the spoliation issues with assistance from Washington, D.C. associate Charlie Berdahl, and Chicago partner Brenda Danek was also heavily involved in developing the misappropriation case.