Battery makers LG Energy Solution and SK Innovation have reached a deal on an intellectual property dispute that would have seen the latter banned from importing lithium-ion batteries into the US for 10 years.
South Korean company SK has been ordered to pay fellow countryman LG 2 trillion Korean won ($1.8 billion), apportioned into lump-sum payments and a running royalty.
The deal includes LG agreeing to withdraw all pending disputes in the US and Korea, and not assert any new claims for the next 10 years.
In February, SK was told to stop importing, making or selling its lithium-ion batteries that unlawfully rely on trade secrets owned by LG Energy Solution (LGES)— a subsidiary of LG Chem.
The ruling included a 10-year ban on the importation of lithium-ion battery cells, modules and packs containing intellectual property owned by LG Chem.
The last minute deal, however, means SK can continue to build its battery plant in Georgia, US. The plant is to supply batteries for Ford and Volkswagen.
The ruling, on 11 April, was made on the deadline set by the US trade representative on whether to veto a United States International Trade Commission (USITC) ruling.
The US’s president Joe Biden had until Sunday night to overrule the Trade Commission's ruling. Politicians from Georgia had been pushing to reverse the USITC decision.
Biden said in a statement released by the White House: “This settlement agreement is a win for American workers and the American auto industry.
"We need a strong, diversified and resilient US-based electric vehicle battery supply chain, so we can supply the growing global demand for these vehicles and components — creating good-paying jobs here at home, and laying the groundwork for the jobs of tomorrow.”