DuPont v. Kolon Industries
Encyclopedia
DuPont v. Kolon Industries is an intellectual property
dispute centering on the allegation that Kolon Industries (of 코오롱그룹), a South Korea
-based company, stole trade secret
s concerning the production and marketing of Kevlar
from DuPont
, an American
chemical company
. Kevlar is a high strength synthetic fiber
used in applications as diverse as bicycle tire
s and body armor. On September 14, 2011, a jury found in favour of DuPont and awarded damages of $919.9 million.
describing a para-aramid synthetic fiber developed at DuPont in 1965 and used commercially from the early 1970s onwards. On February 3, 2009, DuPont filed suit against Kolon for "for theft of trade secrets and confidential information" relating to its product, Heracron. The suit alleged that Michael Mitchell, a Kolon employee who formerly worked at DuPont, had "retained certain highly confidential information on his home computer" that he illegally passed to his new employer. Following an investigation by the Federal Bureau of Investigation
, Mitchell pleaded guilty to the theft of trade secrets and was sentenced to 18 months imprisonment in March 2010.
relevant evidence. As a result Kolon was sanctioned for this behavior on account of screenshot
s showing explicit instructions to delete potentially relevant emails and documents in violation of litigation holds supposedly in effect. According to a forensic analyst acting for DuPont at least 17,811 files and emails were deleted, many of which were deemed relevant to the case. As a result of this finding (the legal term is spoliation), the jury was given an adverse inference instruction, and Kolon was ordered to pay DuPont's costs in connection with the motion. District Judge Robert E. Payne
explained that "the actions taken by the key employees discussed herein were intentional, in bad faith and quite serious."
Thomas G. Powell, President of DuPont Protection Technologies, said "The size of this award is one of the largest in defense of business processes and technologies. It also sends a message to potential thieves of intellectual property that DuPont will pursue all legal remedies to protect our significant investment in research and development and our proprietary information for the benefit of our shareholders and customers... Not only are the technologies and processes of Kevlar important to DuPont, but also to the thousands of soldiers, law enforcement officers and first responders globally whose lives Kevlar protects." In a press release DuPont further stated that it intended to seek the award of costs and injunctive relief, requiring Kolon to return the stolen information and cease production of products made using the information.
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
dispute centering on the allegation that Kolon Industries (of 코오롱그룹), a South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
-based company, stole trade secret
Trade secret
A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers...
s concerning the production and marketing of Kevlar
Kevlar
Kevlar is the registered trademark for a para-aramid synthetic fiber, related to other aramids such as Nomex and Technora. Developed at DuPont in 1965, this high strength material was first commercially used in the early 1970s as a replacement for steel in racing tires...
from DuPont
DuPont
E. I. du Pont de Nemours and Company , commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont was the world's third largest chemical company based on market capitalization and ninth based on revenue in 2009...
, an American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
chemical company
Chemical industry
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials into more than 70,000 different products.-Products:...
. Kevlar is a high strength synthetic fiber
Synthetic fiber
Synthetic fibers are the result of extensive research by scientists to improve on naturally occurring animal and plant fibers. In general, synthetic fibers are created by forcing, usually through extrusion, fiber forming materials through holes into the air, forming a thread...
used in applications as diverse as bicycle tire
Bicycle tire
A bicycle tire is a tire that fits on the wheel of a bicycle, unicycle, tricycle, quadracycle, bicycle trailer, or trailer bike. They may also be used on wheelchairs and handcycles, especially for racing...
s and body armor. On September 14, 2011, a jury found in favour of DuPont and awarded damages of $919.9 million.
Background of case
Kevlar is a trademarkTrademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
describing a para-aramid synthetic fiber developed at DuPont in 1965 and used commercially from the early 1970s onwards. On February 3, 2009, DuPont filed suit against Kolon for "for theft of trade secrets and confidential information" relating to its product, Heracron. The suit alleged that Michael Mitchell, a Kolon employee who formerly worked at DuPont, had "retained certain highly confidential information on his home computer" that he illegally passed to his new employer. Following an investigation by the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
, Mitchell pleaded guilty to the theft of trade secrets and was sentenced to 18 months imprisonment in March 2010.
Destruction of evidence
On July 21, 2011, the court found that Kolon had intentionally destroyedSpoliation of evidence
In law, spoliation of evidence is the intentional or negligent withholding, hiding, altering, or destroying of evidence relevant to a legal proceeding...
relevant evidence. As a result Kolon was sanctioned for this behavior on account of screenshot
Screenshot
A screenshot , screen capture , screen dump, screengrab , or print screen is an image taken by a computer to record the visible items displayed on the monitor, television, or another visual output device...
s showing explicit instructions to delete potentially relevant emails and documents in violation of litigation holds supposedly in effect. According to a forensic analyst acting for DuPont at least 17,811 files and emails were deleted, many of which were deemed relevant to the case. As a result of this finding (the legal term is spoliation), the jury was given an adverse inference instruction, and Kolon was ordered to pay DuPont's costs in connection with the motion. District Judge Robert E. Payne
Robert E. Payne
Robert E. Payne is a United States federal judge.Born in Mount Sterling, Kentucky, Payne received a B.A. from Washington and Lee University in 1963 and a J.D. from Washington and Lee University School of Law in 1967. He was in the United States Army, JAG Corps from 1967 to 1971...
explained that "the actions taken by the key employees discussed herein were intentional, in bad faith and quite serious."
Judgment and reactions
On September 14, 2011, a jury in the U.S. District Court for the Eastern District of Virginia found in favor of DuPont who were awarded damages of $919.9 million. Kolon announced that it intended to appeal and described the judgment as "the result of a multiyear campaign by DuPont aimed at forcing Kolon out of the aramid fiber market", adding "Kolon had no need for and did not solicit any trade secrets or proprietary information of DuPont, and had no reason to believe that the consultants it engaged were providing such information. Indeed, many of the 'secrets' alleged in this case are public knowledge." It also confirmed that it intended to continue a retaliatory antitrust case alleging monopolistic practices on the part of DuPont.Thomas G. Powell, President of DuPont Protection Technologies, said "The size of this award is one of the largest in defense of business processes and technologies. It also sends a message to potential thieves of intellectual property that DuPont will pursue all legal remedies to protect our significant investment in research and development and our proprietary information for the benefit of our shareholders and customers... Not only are the technologies and processes of Kevlar important to DuPont, but also to the thousands of soldiers, law enforcement officers and first responders globally whose lives Kevlar protects." In a press release DuPont further stated that it intended to seek the award of costs and injunctive relief, requiring Kolon to return the stolen information and cease production of products made using the information.