$920 Million Kevlar Trade Secret Verdict Overturned
DuPont has been making Kevlar, the ubiquitous strong polymer for use in bullet-proof armor and countless other consumer products, for over thirty years.
Kolon is a South Korean company that manufactured a similar polymer product known as Heracron, and in 2006 they hired several ex-employees of DuPont to consult on their process for technical improvement.
In 2009, DuPont sued Kolon in Federal District Court, alleging theft of trade secrets both regarding the technical aspects of their polymer and their business practices.
Broadly defined, a Trade Secret can be all forms and types of financial, business, scientific, technical, economic, or engineering information.
- Invention disclosures
- Customer Lists
- Market Analysis
- Software code
But only if…
- The owner took reasonable measures to keep the information secret commensurate with the value of the Trade Secret;
- It’s not known or readily ascertainable by competitors and the general public; and
- The information derives actual or potential independent economic value from not being made known to the public
In 2011, the jury in the case found fault on the part of Kolon and awarded damages to DuPont of $919.9 million. Key to DuPont’s victory was the Court granting their motion to exclude evidence from a prior case as prejudicial and potentially confusing to the jury.
Kolon filed an appeal, arguing that the District Court abused their discretion in granting the motion to exclude evidence that was available to the public from a prior case.
The prior case, known as the Azko litigation involved litigation by DuPont in the 1980s against their competitor AzkoNobel which included 42 elements of intellectual property made public during the case which DuPont argued were protected under trade secrets.
Kolon argued that not allowing the evidence from the Azko case into the trial to show that the elements discussed during the previous case could not be subject to trade secret protection as matters of public record (though not, as the Court of Appeals noted, “generally known”) unfairly prejudiced the jury in their case.
The Court of Appeals ruled that the jury should have been allowed to see the “public” evidence from the previous case to determine if the evidence made the alleged trade secrets less likely to actually qualify for legal protection.
On April 3, 2014 the Court ruled that the District Court had abused its discretion, overturned the $919.9 million verdict in favor of DuPont, and remanded the case to the District Court with instructions to allow evidence from the Azko litigation to be considered by the jury.
Whether this will affect the jury’s decision in this new case remains to be seen.