[Exclusive] "China's Ronbay to Sue LG Chem in People's Court Under Anti-Unfair Competition Law"

[Interview] Ronbay Vice Chairman Yu Sangyeol
Series of lawsuits involving subsidiary Jaeseneungwon
Malicious media play disrupting business operations
Questions raised over filing for an injunction
No reason or need to copy LG Chem’s patents

Ronbay, a Chinese company that is the world’s No. 1 player in the cathode materials sector, has decided to file a lawsuit against LG Chem in a Chinese People’s Court for violating the Anti-Unfair Competition Law. Ronbay is the parent company of Jaeseneungwon, which is currently in a patent dispute with LG Chem. The Chinese Anti-Unfair Competition Law was enacted with the aim of providing a fair competitive environment for all business operators, and Ronbay claims that LG Chem has infringed this law. If LG Chem is sued, there is a possibility that its business operations in China could be suspended.

In an interview with The Asia Business Daily held on the 9th in Seocho-gu, Seoul, Ronbay Vice Chairman Yu Sangyeol said, "We are in a situation where we have no reason to copy LG Chem’s patents, yet LG Chem is engaging in malicious media play," adding, "We keep getting questions from customers asking whether we are about to shut down our plant, and we believe such actions constitute interference with our business operations."

Yoo Sangyeol, Vice Chairman of Rongbai, is being interviewed at Jaeseneungwon in Seocho-gu, Seoul, on the 9th. Photo by Kang Jinhyeong

Article 2 of China’s Anti-Unfair Competition Law stipulates that, in carrying out production and business activities, business operators must comply with laws and commercial ethics in accordance with the principles of voluntariness, fairness, and good faith. Under this law, unfair competition refers to acts by business operators, in the course of their operations, that disrupt market competition order and damage the legitimate rights and interests of other business operators or consumers.

Ronbay believes that LG Chem infringed its trade secrets during the litigation process and disrupted the operation of its plant. Ronbay claims that LG Chem used the evidence investigation and preservation procedures of a Korean court to conduct an inspection at its plant in Chungju, Korea, and that it intentionally chose China’s National Day holiday period for this inspection. A Ronbay headquarters official pointed out, "We instructed our legal counsel to join the official inspection team and film the entire process," adding, "As a result, we suspect that a large amount of Jaeseneungwon’s core internal information and sensitive data related to plant production was collected beyond the scope of investigation permitted by the court."

Previously, after the patent invalidation lawsuits that Jaeseneungwon filed with the Intellectual Property Trial and Appeal Board were dismissed, LG Chem regarded this as a de facto victory and filed for an injunction against Jaeseneungwon.

In response, an LG Chem official stated, "After negotiating with the other party for a long time, we exercised our legitimate rights as the patent holder," and expressed the view that "the Anti-Unfair Competition Law claim does not hold water."

The following is a Q&A with Vice Chairman Yu.

-The legal battle with LG Chem is dragging on and becoming increasingly intense.

▶LG Chem first filed a complaint with the Trade Commission, claiming that we had infringed its patents, and Jaeseneungwon also filed five invalidation trials with the Intellectual Property Trial and Appeal Board against the relevant patents. The board upheld three of them as valid, ruled one invalid, and is still reviewing one case. In this situation, LG Chem went as far as filing for an injunction. We question the timing and circumstances. There are other cathode material companies, so it is difficult to understand why LG Chem raised patent infringement claims only against Jaeseneungwon. If the patents are truly necessary, we are fully willing to purchase them. We once spent several billion won to buy ternary-related patents that had been held by Argonne National Laboratory under the U.S. Department of Energy and were later transferred to BASF.

-Why were you unable to secure investment in Korea and ended up merging with a Chinese company?

▶In 2010, we first established EMT in Korea. It was launched as a joint start-up and was a company that produced precursors. At that time, there were cathode material companies in Korea, but no precursor companies. Believing that precursors were needed, we started the business, but the market did not grow quickly. So we decided we needed to return to being a cathode materials company and founded Jaeseneungwon. However, both companies struggled because we were unable to secure investment. Through an acquaintance, we received a proposal to set up a joint venture based on Chinese capital investment. In 2014, we received investment from Ronbay and proceeded with a merger.

-Why did you decide to return to Korea?

▶In China, the market grew rapidly, and Ronbay became the world’s No. 1 cathode materials company. We supplied mainly to the Chinese domestic market, but the number of overseas customers gradually increased. Two of our overseas customers both wanted us to produce products in Korea. There were tariff issues between the United States and China, but we also realized that they specifically wanted Korean-made precursors and cathode materials. That is why we decided we should restart our Korean plant. We returned to our original intention of succeeding in business in Korea as a Korean company.

-You have completed a plant in Chungju. What is the scale of your investment in facilities?

▶Jaese 1 Plant was completed in 2023, and 2 Plant in 2024. Their combined capacity is 30,000 tons. We additionally built 3 Plant last year, expanding capacity to 70,000 tons. We have received a total investment of about 700 billion won. EMT also secured an additional investment of about 30 billion won last year and completely revamped its production line. We have been in full production since last year. The cathode materials produced here are being exported to a well-known U.S. electric vehicle company and a Japanese electronics company. Jaese has about 450 employees and EMT about 130, for a total of around 600 employees.

-What are your future plans?

▶We plan to launch a lithium crushing business this year and, as early as the second half, build a new production line. In terms of sites, we are considering Saemangeum in Korea and Indonesia and Japan overseas. Once this is done, we will be able to produce up to 60,000 tons of precursors. There will also be changes in our shareholding structure. Currently, China’s Ronbay holds 100% of Jaeseneungwon’s shares. However, we are seeking to attract more than 75% equity from U.S. capital. Once Jaeseneungwon is separated as a U.S. company, it will become a joint venture among the United States, Korea, and China. We plan to establish a holding company in Singapore and list the company in the United States as well.

This content was produced with the assistance of AI translation services.