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A case to answer? LG Chem alleges that SK Innovation stole its industrial secrets


research and development to manufacturing and sales. “Once SKI realised that LGC had become


aware of these actions and intended to take action, SKI organised a top-down campaign to destroy or hide as much of the evidence of their involvement as they could,” says David K. Callahan, Chicago-based chair of the IP practice at global lawfirm Latham&Watkins, lead counsel for LGC. This led the administra- tive law judge to issue a default judgment in LGC’s favour, which is very unusual, Mr Callahan says. Subsequently, however, the ITC decided to


reviewthe judge’s decision, and requested addi- tional briefings from the parties. A final judg- ment is expected on December 10. If the ITC finds a violation of Section 337, it can issue an exclusion order directing customs officers to prevent infringing imports from entering the country, as well as a cease and desist order. SKI’s website features a special section on


the litigation. The company describes LGC’s claim as “baseless”, saying it has developed its own technology. SKI states that it is interested in a settlement for the sake of its customers, “not because SKI is acknowledging that trade secrets were misappropriated”. “As with all disputes of this type, settle-


ments are certainly possible,” saysMrCallahan. “The only remedy we have asked for is that they stop using our trade secrets. It doesn’t mean they have to shut down the plant in Georgia, provided the batteries they make don’t use our trade secrets.” One question that arises is whether Georgia could or should have done more due


diligence on SKI’s IP rights before backing the project. “There’s really no way for the state to do due diligence on IP,” says Mr Wilson. “It’s out of our purview.” However, Timothy R. Holbrook, a professor


of IP lawatEmoryUniversity in Atlanta, advises that the state could adopt a standard principle from commercial contracts: the duty of good faith and fair dealing. “You represent that this is your technology, and if it is not, the other party should be able to get compensation for violation of the contract. There could be some form of covenant stating that you did not appropriate the technology from any source,” he explains. “Generally, states could ask companies to


disclose their IP and get an assessment of the validity of their patents—it’s fairly lowcost—as well as an assessment of whether someone else owns the patent. They should also have a clause in there about a covenant that the company does in factownits IP assets,” saysMrHolbrook. Even though Georgia will suffer if SKI loses


its case,Mr Holbrook argues that those impacts should not excuse the theft. And if SKI’s actions are overlooked, he warns it may cause other companies to worry that their IP may not be protected by the state. The ITC’s decisionmay not be the last word.


ITC decisions are sent to the president, who has 60 days to approve or disapprove them for pol- icy reasons. A final appeal may be made to the US Court of Appeals. Meanwhile, Mr Wilson remains optimistic.


“We have done everything we can to make the administration aware of the project’s positive impact, and we stand by that,” he says.■


December 2020/January 2021 www.fDiIntelligence.com 59


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