DuPont Wins $919M in Kevlar Trade Secrets Claim

By and | September 15, 2011

A U.S. federal jury awarded DuPont $919.9 million in damages Wednesday, ruling that a South Korean company stole trade secrets for a fiber used to make Kevlar bulletproof vests.

DuPont said the Richmond, Virginia, jury ordered Kolon Industries Inc. to pay the damages after finding the textile company willfully and maliciously stole trade secrets and confidential information regarding its Kevlar para-aramid fiber.

In addition to body armor, the fiber is also used to make tires and fiber-optic cables.

Shares of Kolon fell 15 percent in early trading on Thursday. In a statement, the company said it has “solid legal and factual grounds” for its planned appeal, and that many of the alleged secrets were publicly known.

Kolon also plans to pursue a separate antitrust case against DuPont, scheduled for trial next March.

DuPont called the award one of the largest in a trade secrets case.

“This was a concerted, orchestrated and persistent effort on behalf of Kolon and senior management to steal our trade secrets,” General Counsel Thomas Sager told Reuters.

DuPont will ask U.S. District Judge Robert Payne, who presided over the seven-week trial, to require Kolon to stop selling products based on the trade secrets.

The case was filed in February 2009 after Michael Mitchell, a 24-year DuPont veteran, had left the company in 2006 to start his own fiber business, according to DuPont’s complaint.

Kolon later began working with Mitchell and extracted proprietary information about Kevlar he had taken from DuPont, the complaint said.


DuPont said it has not tried to estimate how much it lost in sales, and is not projecting whether sales might now rise.

“The issue wasn’t really the business that we lost,” Tom Powell, head of DuPont’s protection technologies business, told Reuters. “The issue was the billions of dollars we invested in developing it, and someone trying to shortcut by stealing our technology.”

In its antitrust case, Kolon accused DuPont of using multi-year supply contracts that required large customers to buy 80 percent to 100 percent of their para-aramid fibers from the company, violating the Sherman Act.

A federal appeals court in Richmond reinstated Kolon’s lawsuit in March, without ruling on the case’s merit. DuPont plans this year to ask for the case to be dismissed.

According to court papers, DuPont sells more than 70 percent of para-aramid fibers purchased in the United States. The Wilmington, Delaware-based company also makes products used in the chemical, agriculture and biotechnology industries.

DuPont shares closed up 86 cents, or 1.9 percent, at $45.52 on the New York Stock Exchange.

The case is DuPont v. Kolon Industries Inc. et al, U.S. District Court, Eastern District of Virginia, No. 09-00058.

(Reporting by Ernest Scheyder and Jonathan Stempel in New York; editing by Tim Dobbyn, Andre Grenon and Matthew Lewis)

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