Two South Korean companies, LG Energy Solution and SK Innovation, have become embroiled in an intellectual property rights dispute. For ten years, the US authorities have banned the second of them from supplying lithium batteries and producing them in the country. The plaintiff, represented by LG Energy Solution, demands too much compensation from SK Innovation, but is ready to accept the opponent’s shares as compensation.

Image source: PR Newswire

The decision of the US federal authorities imposes a ban on the import and production of SK Innovation lithium batteries in the country for a period of ten years, with the exception of contracts with Ford Motor and Volkswagen. The first automaker will be able to receive traction batteries from SK Innovation for four years, but at the same time, products from rival LG Energy Solution are available to it. The German carmaker found itself in a more difficult situation, since the SK Innovation enterprise under construction in Georgia could fully cover Volkswagen’s needs for the supply of traction batteries, which would be enough to produce 430 electric vehicles a year. At the same time, the US authorities allowed the German concern to receive batteries from SK Innovation only for a period of two years.

According to Business Korea, the parties to the conflict are hindered by disagreements over the amount of compensation to reach an amicable agreement. LG Energy Solution expects to receive about $ 2,6 billion, and SK Innovation can offer no more than $ 440 million. According to representatives of LG Energy Solution, the defendant could pay off part of the amount with its own shares. There are examples of such agreements in judicial practice. At the same time, SK Innovation is still largely hoping that US President Joseph Biden will veto the decision of the US International Trade Commission.