LG Chem to up patent investment
No plans to sign licensing deals with SK, Celgard
By Kim Yoo-chul
LG Chem CEO Park Jin-soo
LG Chem CEO and Vice Chairman Park Jin-soo said that the world’s biggest supplier of batteries for electric vehicles is boosting its spending on patents because intellectual property rights are an increasingly important part of corporate success.
“LG Chem is facing increasing threats of patent litigations from competitors and from organizations known as non-practicing entities (NPEs) that don’t design and manufacture,” Park said during a dinner with reporters, Friday.
“But we will be proactive and aggressive in protecting our patents by strengthening our patent portfolios and hiring more experts.”
While the LG Group affiliate is in various patent disputes over battery-related technologies with its rival SK Innovation and Celgard of the United States, LG has no plans to sign comprehensive cross-licensing deals in the foreseeable future, said the CEO.
“As rechargeable batteries for electric vehicles are emerging as one of the next growth engines, LG Chem is grappling with many court battles,” Park said.
“We have been consistent in strengthening our patent portfolio in car batteries. Cross-licensing is only possible if there’s room for us to get something from other parties. We are not considering settling some legal disputes with involved firms,” according to the vice chairman.
LG Chem and SK Innovation are in legal battles in Korea over materials to be used in car batteries.
Celgard, a subsidiary of NYSE-listed Polypore International has filed a complaint in the U.S. District Court of the Western District of North Carolina against LG Chem, alleging that LG has infringed on Celgard’s patent for “separator for a high-energy rechargeable lithium battery.”
During the meeting, the CEO said that LG Chem aims to create 30 trillion won in revenue by 2017 and become the world’s No. 3 chemical company just behind BASF and Dow Chemical.
To achieve the goal, the vice chairman said it will invest 590 billion won in research and development (R&D) this year, up from the previous year’s 450 billion won.
It plans to invest a large part of the amount in key materials to be used in premium consumer gadgets such as bendable smartphones, OLED TVs and eco-friendly chemical materials. It plans to increase its R&D experts to 2,900 this year from 2,500 a year ago.
As the market for electric vehicles is expanding, LG Chem is mulling the possibility of expanding its battery capacity at its factory in Nanjing, China.
LG’s technology affiliates from LG Display, LG Electronics to LG Innotek and LG Chem joined forces to create the “LG Cluster” in Nanjing, where LG is currently producing small and large-sized batteries.
“Upon demand, we can expand our battery capacity. LG Chem is looking at other countries for possible new facilities. But we are studying various scenarios before making any bold actions,” Park said.
“Our battery factory in Michigan is on track to fully recover on the back of a growing demand for electric vehicles. No more troubles are expected,” Park said.
He added that a move by U.S.-based electric car manufacturer Tesla to build its own battery plant will have limited impact” on LG’s battery business.