E.I. du Pont de Nemours & Co. v. Kolon Industries: New England Trade Secrets Case Highlights Business Litigation Issues in Massachusetts

A New England intellectual property trial has resulted in a $919 million jury verdict for DuPont, believed to be the largest such verdict ever awarded.

In today’s global economy, moving to protect your product rights is critical. Our General Counsel on Call services can assist startups as well as established businesses that are dealing with a wide variety of legal issues — including employment law and business formation in Boston. For its part, South Korea-based Kolon is claiming that DuPont has violated antitrust law by using its size and market share to force out competition.

Bloomberg Businessweek reports jurors in a federal court in Virginia deliberated for two days before finding Kolon guilty of wrongfully obtaining proprietary information about Kevlar. 860421_police_search.jpg

DuPont began making Kevlar in the 1960s; initially it was used in racing tires. Today, DuPont sells about $1.5 billion of the fiber annually, primarily for use in body armor, bullet-proof vests and other military applications. The company accused Kolon of hiring former DuPont employees and of stealing proprietary information. A former DuPont engineer and marketing director, who went to work for Kolon, was sentenced to 18 months in prison after pleading guilty to theft of trade secrets and obstruction of justice.

Kolon began marketing its own bullet-proof fiber in 2005. The company was sued by DuPont in 2009 after DuPont notified the Federal Bureau of Investigation and the U.S. Department of Justice over what it believed was a theft of trade secrets and other proprietary information by a former employee. A raid of the employee’s home allegedly turned up computer files and other product information belonging to DuPont.

DuPont is also seeking punitive damages for the theft of 149 trade secrets as well as reimbursement of more than $30 million in attorney fees and other secrets. It is also seeking an injunction preventing Kolon from marketing its products using DuPont information.

Kolon’s rival product is called Heracron. The company claims DuPont has violated antitrust laws by forcing customers to purchase at least 80 percent of their Kevlar fibers from them. Kolon also claims it did not solicit trade secrets or use proprietary information. Rather, it claims the allegedly “secret” information is “public knowledge.” While the theft of trade secrets can be devastating, so can being forced out of the marketplace by a larger competitor pushing an unfair advantage.

Court watchers say the large verdict suggests jurors thought the case was particularly egregious. It’s the second such verdict this year; Mattel was ordered to pay $310 million to MGA over the Bratz Doll case.

Both cases involved former employees who went to work for the competition. A properly fashioned employment agreement in Boston is another critical tool in protecting trade secrets and other competitive advantages from falling into the hands of the competition.

A Boston corporate law firm, The Brown Law Firm, LLC, has offices in Belmont and Boston. For a free and confidential consultation, call 617-489-0817 or contact us through this website.

Additional Resources
E.I. du Pont de Nemours & Co. v. Kolon Industries Inc.

MBA
Boston Bar Assosiation