The federal government has filed criminal charges of conspiracy and trade secret theft against Kolon Industries Inc. The South Korean company is accused of misappropriating information regarding E.I. du Pont de Nemours and Co.’s Kevlar technology.
A federal jury previously ordered Kolon to pay DuPont $919.9 million in damages in a related civil trade secret infringement lawsuit. As we recently discussed on this IP Law Blog, the court also ordered a 20-year permanent injunction banning the company from manufacturing its rival high-strength fiber.
Both cases involve trade secrets relating to DuPont’s Kevlar fiber, which is used in bulletproof vests, military helmets, tires, brakes and fiber-optic cables. DuPont and the Department of Justice allege that Kolon recruited DuPont’s former employees and used DuPont’s proprietary business information to create its competing product, Heracron fiber.
According to the Department of Justice, “Kolon allegedly met with these people individually on multiple occasions from 2006 through 2008 to solicit and obtain sensitive, proprietary information that included details about DuPont’s manufacturing processes for Kevlar, experiment results, blueprints and designs, prices paid to suppliers and new fiber technology. In cases where the consultants could not answer Kolon’s specific and detailed questions, Kolon allegedly requested the consultants to obtain the information from current employees at DuPont.”
The indictment, which was first filed under seal in August, seeks forfeiture of at least $225 million in proceeds, making it one of the largest criminal trade secret cases to date. In addition to the corporation itself, several Kolon executives and employees were also charged with conspiring together to steal trade secrets and obstruction of justice for deleting information from their computer.
As this case highlights, the Department of Justice is prepared flex its muscles when it comes to trade secret misappropriation, particularly by companies who attempt to use it to secure a business advantage.