By John Presper
On February 10, 2021, the ITC issued a notice of its final determination finding a violation of section 337 in Certain Lithium Ion Batteries, Batter Cells, Battery Modules, Battery Packs, Components Thereof, and Processes Therefor (Inv. No. 337-TA-1159). According to the notice, the Commission found a violation of section 337 and issued a limited exclusion order (“LEO”) and cease-and-desist order against Respondents SK Innovation Co., Ltd. of Republic of Korea (“SKI”) and SK Battery America, Inc. of Atlanta, Georgia (“SKBA”) (collectively, “SK”).

By way of background, this investigation is based on an April 29, 2019 complaint (as amended) filed by LG Chem., Ltd. of Republic of Korea, LG Energy Solution, Ltd. of Republic of Korea, and LG Energy Solution Michigan, Inc. (collectively, “LG”) alleging violations of section 337 in the importation and/or sale of certain lithium ion batteries, battery cells, battery modules, battery packs, components thereof, and processes therefor by reason of misappropriation of trade secrets. In particular, LG alleged that SK conspired with then-LG employees—who have since moved to SK—to transfer information regarding highly proprietary manufacturing processes and systems for the production of electrical vehicle (EV) batteries.

On February 14, 2020, ALJ Cameron R. Elliot issued Order No. 34 (see Part I and Part II of the public version) containing his initial determination (“ID”) that SK had spoliated evidence, and that the appropriate remedy is to find SK in default “given the breadth of SKI’s intentional spoliation.” For example, the ALJ quoted an email sent by an SKI employee on April 30, 2019, the day after the filing of LG’s complaint, which instructed recipients to “[d]elete every material related to the rival company from every single individual’s PC, mail storage archives and team rooms. ASAP. Make sure to especially scrutinize SKBA. PCs may even be subject to seizure and examination. Delete this email after completing this directive.”

The Commission reviewed the ID in its entirety and sought briefing from the parties on the issues under review, and also sought briefing from the parties and non-parties on remedy, public interest, and bonding. No hearing was held. Upon reviewing the record and the submissions from parties and non-parties, the Commission determined to affirm the ID’s finding of default with modified reasoning clarifying the distinct bases for sanctions under (i) 19 U.S.C. § 1337(h) and Commission Rule 210.33, and (ii) inherent authority under Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011). The Commission found that both bases apply here. The Commission further determined that the appropriate remedy is an LEO and cease-and-desist order against SK, which will expire after ten years. In addition, the Commission determined that tailoring of its remedial orders is appropriate in view of public interest considerations, and therefore permitted SK to import components for domestic production of lithium ion batteries, battery cells, battery modules, and battery packs for Ford Motor Co.’s EV F-150 program for four years, and for Volkswagen of America, Inc.’s America’s MEB line for the North America Region for two years to permit these third parties to transition to new domestic suppliers for these programs. The remedial orders also permit SK to import articles for repair and replacement of EV batteries for Kia vehicles that had been sold to U.S. customers as of the date of the orders and were originally equipped with SK batteries.

The opinion of the Commission is confidential pending release of a redacted version.

UPDATE:  On March 4, 2021, the Commission issued the public version if its opinion.