l U.S. court opens trade-secret case; upon a
finding of misappropriation, it may enjoin manufacture, sale, and distribution

l PTAB denies all five of Solus Advanced
Materials’ IPR petitions and the rehearing requests

l Scope of alleged U.S. patent infringement
by Solus expands as the court accepts additional key issues for adjudication

l Korean Intellectual Property Trial and
Appeal Board invalidates four Solus patents; company declines to appeal

SKC’s affiliate in the copper foil business
for EV batteries, SK Nexilis, announced that its trade-secret lawsuit against
Solus Advanced Materials (“Solus”), filed in the U.S. District Court for the
Eastern District of Texas, was formally opened early last month. The company stated
that the court’s decision to proceed indicates that the case warrants full adjudication,
and that SK Nexilis will continue to respond proactively as the litigation
moves forward.

If misappropriation of trade secrets is found,
the court may issue injunctive relief enjoining the manufacture, sale, and
distribution of the products at issue. Where willful and malicious misconduct
is established, the U.S. Defend Trade Secrets Act (DTSA) permits enhanced
damages of up to three, times the compensatory amount.

Alongside the opening of the trade-secret
case, developments in the United States have trended favorably for SK Nexilis
regarding questions about Solus’s technological credibility. All five inter
partes review (IPR) petitions that Solus filed with the U.S. Patent Trial and
Appeal Board (PTAB) seeking to invalidate SK Nexilis’s patents were denied at
the pre-institution stage. Solus’s rehearing requests were also ultimately denied,
concluding the matter in SK Nexilis’s favor.

At the pretrial conference held in October,
additional key issues related to Solus’s alleged patent infringement were
highlighted. The court set all of SK Nexilis’s points for adjudication at
trial, including:

ㆍRebuttal to Solus’s claim of “independent
R&D,” alleging that former employees from SK Nexilis’s predecessor entity
were involved, raising concerns about potential technology misappropriation;
and

ㆍAllegations that Solus submitted
only selectively favorable samples as evidence

The court also ruled that Solus may not
rely at trial on technology-development claims predicated on patents held by
Circuit Foil Luxembourg (CFL), a subsidiary that Solus recently agreed to sell
to a Chinese company. SK Nexilis stated that this ruling meaningfully signals the
court’s willingness to question the reliability of Solus’s technical assertions
and the propriety of its evidentiary submissions.

Regarding the
U.S. court’s recent decision to admit CFL product samples into evidence, SK Nexilis
stated that the materials are not persuasive enough to establish patent invalidity
and are unlikely to affect the substantive outcome. The company had previously moved
to exclude the samples on the grounds that they were improperly submitted.

Developments in Korea have also continued
to favor SK Nexilis. The Korean Intellectual Property Trial and Appeal Board (KIPTAB)
invalidated four of the eight Solus patents that SK Nexilis challenged, and
Solus did not appeal, making the decisions final last month. Industry observers
view this as an indication that Solus may have concluded that maintaining its
defense for these patents would be difficult. Patent-infringement lawsuits in
Korea _ base_d on the invalidated patents are also expected to be dismissed.

The remaining four patents are still under
review at KIPTAB, and SK Nexilis believes the likelihood of invalidation is
high given the presence of prior art for all of them. Notably, two of these
patents were confirmed to have been acquired by Solus from a Japanese company
shortly before Solus filed suit.

An SK Nexilis spokesperson commented,
“Although the litigation is still ongoing, the results from various proceedings
in the United States and Korea show that Solus’s arguments are unlikely to gain
traction. We will continue to substantiate the facts and work to ensure that
our rights are properly protected throughout the remaining process.”