E.I. DuPont de Nemours & Co. settled its long-running trade secret dispute against Kolon Industries, Inc. over the theft of trade secrets related to DuPont’s flagship Kevlar® product. Crowell & Moring attorneys, in partnership with McGuireWoods LLP, represented DuPont in the six-year battle.

Kolon also pled guilty to one count of a conspiracy to convert trade secrets in the related criminal matter brought by the United States Department of Justice, and agreed to pay DuPont $275 million in restitution, along with $80 million in criminal fines. Previously, two former DuPont employees pled guilty to trade secret violations for their consulting work with Kolon. One of the employees served an 18-month prison term, and the other is awaiting sentencing.

The case began in 2009, when DuPont filed a trade secret misappropriation case against Kolon in the Eastern District of Virginia. In September, 2011, after a seven-week trial, a jury found that Kolon misappropriated 149 Kevlar-related trade secrets, and awarded DuPont $919.9 million in damages. That jury award is the largest contested trade secret award ever, as well as the largest award of any kind in the Commonwealth of Virginia. In 2014, the Fourth Circuit Court of Appeals remanded the case back to the District Court on evidentiary issues related to an alleged prior disclosure of Kevlar® information. The re-trial was scheduled for August 2015.

The case is of particular interest to practitioners given the breadth of trade secret issues that were contested and decided in the long-running litigation. Among other issues, the DuPont v. Kolon case addressed issues related to:

  • trade secret identification;
  • the interplay between patents and trade secrets;
  • “combination” versus “compilation” versus “regular” trade secrets;
  • use injunctions against foreign companies; and
  • asset seizure for trade secret awards.The case also involved evidence spoliation and the interplay between assertions of the Fifth Amedment self-incrimination privilege and trial testimony, and featured two distinct adverse-inference jury instructions related to those issues.

The Crowell & Moring team briefed, argued, and tried these – and other – issues to the Court and the jury as the case progressed. In the coming weeks and months we will be posting detailed analyses of the specific legal issues raised by this bellweather trade secrets case.