An Overview of DuPont v. Kolon Industries (2011)

by JRO on December 28, 2013

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In September 2011, American-based Dupont was awarded $920 million following a court decision in the case of DuPont v. Kolon Industries. The decision was based on the court’s opinion that Kolon Industries had stolen trade secrets from DuPont regarding the material known as Kevlar. Kevlar, which is used in a variety of functions from bicycle tires to clothing, is known for its strength and durability, and was invented and produced by DuPont.

Background of the Case

Kevlar, which was manufactured by DuPont in the mid 1960s and first sold to the general public in the 1970s, is a synthetic material used by many individuals and companies, including the US military. It is bullet-resistant and is often used in body armor. DuPont constantly improves Kevlar, strengthening and reinforcing the material over time.

In 2009, DuPont filed suit against a former employee of DuPont, Michael Mitchell, who was now working for Kolon Industries. The filed suit was based on the claim from DuPont that Mitchell had taken trade secrets from DuPont to Kolon Industries, and that this information had been given to Kolon in violation of the law.

Forming the Case

Kolon Industries began producing a fabric very similar to that of Kevlar in 2005, before the allegations occurred. When Kolon Industries wanted to improve upon their version of the fabric, they hired Mitchell, knowing that he had previously worked for DuPont. When DuPont brought the charges against Mitchell, the case was brought to the FBI. During a search of Mitchell’s house, the FBI uncovered documents on Micthell’s computer that originally belonged to DuPont. With the incriminating evidence in hand, Mitchell pled guilty to the charge of sharing secrets, and he was sentenced to 18 months in prison.

As the two companies competed in sales of their respective fabrics, Kolon Industries was able to use DuPont’s secrets to boost their own product.

The Court Ruling

The US District Court in Richmond, Virginia heard the case in 2011. The court ruled on the basis that DuPont had lost millions of dollars in possible products gains as a result of Kolon Industries being able to compete against DuPont using DuPont’s own product secrets. DuPont was awarded $919.9 million dollars to be paid by Kolon Industries. The settlement shall be paid through whatever assets Kolon Industries possesses. DuPont also plans to seek punitive damages for attorney fees and for each piece of stolen information. DuPont would also like to see Kolon Industries banned from manufacturing any products that were originally made or improved upon as a result of information obtained from DuPont. The case was viewed as a huge victory for intellectual property rights and intellectual property theft.

When the court decision was made, Kolon Industries stated that it disagreed with the verdict, did not assume guilt, and will attempt to appeal the court decision. Kolon also stated that it will pursue an anti-trust case against DuPont in the future. DuPont has said they will file motions to dismiss Kolon’s charges.

In addition to IP Law, Jared Buchanan writes on finance, banking, business, international politics, commerce & trade, accounting and other matters as well. Readers contemplating a career shift should consider viewing the finance jobs with moneyjobs.com.

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