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REGIONS AMERICAS


THERE’S REALLYNOWAY FOR THE STATE TODODUEDILIGENCEONIP. IT’SOUTOFOURPURVIEW


AKoreancatfight in thePeachState


A LEGAL BATTLE OVER INTELLECTUAL PROPERTY RIGHTS IS COMING TO A HEAD IN GEORGIA. PHILIPPA MAISTER REPORTS


T


he fate of a $2.6bn lithium ion battery plant, currently under construction in the US state of


Georgia, rests in the hands of an administrative lawcourtwhichmust decide whether its owner, SK Innovation (SKI), misappropriated trade secrets from its rival LG Chem


(LGC) in order to develop its technology. At stake is not only the plant itself, but con-


tracts for SKI’s batteries with Ford and Volkswagen, whichplan to install themin their new electric vehicles; the 2000 jobs the plant would directly create, plus others linked to sup- pliers; the considerable investment of the state and county; and SKI’s reputation. The case has attracted global attention,


especially from South Korea where both SKI and LGC are based. In briefs supporting LGC, the governors of


Michigan (where LGC has a battery plant in the city of Holland), and Ohio (where it plans to build a plant with General Motors), argue that SKI’s use of allegedly stolen technology would put it in direct competition with workers in their states. Congressional representatives in the US have written letters of support for each side. Volkswagen has weighed in, warning that its planned launch of a newelectric vehicle will be threatened if SKI cannot supply the neces- sary batteries. However, it is not just the jobs, investment


and tax revenue that are on the line in Georgia. The state also aims to seize the opportunity to become a hub for the electric vehicle industry of the future, says Pat Wilson, commissioner of the Georgia Department of Economic


58


Development. “We are entering a long-term strategic effort to recruit the entire supply chain for e-mobility into the state: from the minerals needed in the beginning of the pro- cess all the way to the production of the bat- tery,” he says. “We hope to attract a number of suppliers across the entire ecosystem.” And two South Korean companies, Enchem


and Dongwon Tech, have already committed to building factories near the SKI plant in Jackson County. Two foreign makers of parts for elec- tric vehicles, Germany’s Gedia Automotive Group and Turkey’s Teklas, also have announced FDI projects.


Intellectual property SKI’s troubles began in April 2019, when LGC filed a lawsuit against it before the US International Trade Commission (ITC), an inde- pendent body authorised to investigate and make determinations in cases involving imports that injure a domestic industry or vio- late US intellectual property (IP) rights. LGC called for an investigation of SKI under Section 337 of the US Tariff Act,which applies to unfair imports, including those resulting from misap- propriation of trade secrets. LGC alleged that, between 2016 and 2018,


SKI “misappropriated a vast number of LGC Trade Secrets” by conspiring with LGCemploy- ees to download and transfer highly sensitive material to SKI, and by hiring 80 LGC employ- ees with knowledge of its technology. The trade secrets passed on included “highly pro- prietary manufacturing processes and sys- tems for the production of electric vehicle bat- teries” covering the full spectrum from


www.fDiIntelligence.com December 2020/January 2021


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