ITC issues default judgement against SK Innovation in trade secret infringement case

Posted on : 2020-03-23 17:56 KST Modified on : 2020-03-23 17:56 KST
Company found to have deleted evidence in case filed by LG Chem

On Mar. 20, The US International Trade Commission (ITC) published a decision on its website containing the detailed rationale for issuing a default judgment against SK Innovation in a lawsuit in which LG Chem had charged SK Innovation with trade secret infringement. Because of SK Innovation’s intentional spoliation of evidence, “LG Chem’s ability to pursue its case and my ability to oversee a fair and timely investigation on the merits have been significantly prejudiced,” the judge said in the decision. While SK Innovation is planning to move ahead with a legal appeal, industry sources say it may also seek a settlement before the final decision is made.

According to the decision in LG Chem’s lawsuit about the infringement of trade secrets, ICT found that SK Innovation had aggressively deleted, or allowed the deletion of, documents that could serve as evidence, even though ICT’s acceptance of the case on Apr. 30, 2019, had made SK Innovation responsible for preserving such evidence. If the deletion of documents had been aboveboard, occurring in the normal course of operations, the company would not have attempted to suppress the orders sent to delete those documents, the ITC said, concluding that the spoliation of evidence had been planned and intentional.

On Feb. 14, ITC had made a default judgment against SK Innovation, finding the company in contempt of court for spoliation of evidence during the course of the lawsuit. All that remains following a default judgment is the final decision, leaving no opportunity for standard courtroom procedures and arguments. The final decision is scheduled to be issued on Oct. 5.

The ITC also concluded that its forensic orders had been violated: “An overarching purpose of Order No. 13 [the forensic order] was to order SKI [SK Innovation]to recover any document that may yet still exist within SKI’s possession, notwithstanding the April document destruction effort,” the judge said, noting that the company and the forensic experts in its pay had limited the scope of the forensic examination in a manner contrary to the judge’s order.

On Mar. 3, SK Innovation filed a petition for the ICT to review its preliminary judgment. The ITC will decide whether to accept the petition by Apr. 17. If the ITC accepts the petition, it will make its final decision by Oct. 5, but if it rejects the petition, its finding against SK Innovation will become final.

In Apr. 2019, LG Chem filed lawsuits against SK Innovation with the ITC and the US District Court for Delaware, claiming the other company had infringed trade secrets related to rechargeable batteries. If the ITC’s preliminary decision becomes final, it will have major consequences for SK Innovation’s future operations. The company would not only be banned from selling rechargeable batteries and related products in the US, but would also likely have to pay huge damages to LG Chem.

LG Chem said it would “aggressively pursue the remaining legal proceedings,” while SK Innovation said it will “conscientiously engage in the appeals process provided by law.”

By Hong Dae-sun, senior staff writer

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