South Korea's Kolon accused of stealing trade secrets

By Frank Esposito
Senior Staff Reporter

Published: October 19, 2012 6:00 am ET

Related to this story

Topics Public Policy, Materials, Suppliers

WASHINGTON (UPDATED Oct. 19, 12:10 p.m. ET) — South Korean chemicals firm Kolon Industries Inc. and five of its employees have been indicted by the U.S. Department of Justice for allegedly stealing trade secrets related to DuPont Co.’s Kevlar material and to a similar product made by Teijin Ltd.

The indictments come a little more than a year after DuPont was awarded almost $920 million in a related trade-secrets lawsuit against Seoul-based Kolon. Kolon allegedly obtained confidential information about production of DuPont’s Kevlar-brand and Teijin’s Twaron-brand para-aramid fibers between 2002 and 2009 from former employees of both firms, Justice Department officials said in an Oct. 18 news release. Kolon then used this information to produce its own Heracron-brand para-amid fibers.

“Kolon is accused of engaging in a massive industrial espionage campaign that allowed it to bring Heracron quickly to the market and compete directly with Kevlar,” U.S. Attorney Neil MacBride said in the release.

Assistant Attorney General Lanny Breuer added in the release that “by allegedly conspiring to steal DuPont’s and Teijin’s intellectual property, Kolon threatened to undermine an economic engine at both companies.”

In an Oct. 18 statement from Wilmington, Del.-based DuPont, Senior Vice President and general counsel Thomas Sager said the firm “believes in a fair and level playing field, and will remain vigilant in protecting and enforcing our trade secrets.”

“Today’s announcement of the indictment speaks for itself and constitutes a major step in bringing this matter to a conclusion,” Sager said. “We will continue to pursue enforcement of our civil judgment in the United States, Korea and around the world.”

In one of the incidents, Kolon employees met with a DuPont employee at a hotel in Richmond, Va., in 2008 to discuss how the DuPont employee could provide Kevlar-related trade secrets without leaving evidence. In a separate incident, a Kolon employee copied information from a CD owned by a former DuPont employee who was working as a consultant to Kolon. The CD contained a detailed breakdown of DuPont’s capabilities and costs for its Kevlar products, customer pricing information and related data.

The indictments were filed in U.S. District Court in Washington. The indicted Kolon employees are Jong-Hyun Choi, 56; In-Sik Han, 50; Kyeong-Hwan Rho, 47; Young-Soo Seo, 48; and Ju-Wan Kim, 40.

The indictment seeks at least $225 million in forfeiture — representing what Kolon profited from Heracron sales from January 2006 through June 2012 — as well as $341,000 in payments made to former DuPont employees in exchange for trade-secret information.

Officials with Kolon and with Osaka, Japan-based Teijin could not be reached for comment. Teijin has a sales office in Atlanta, while Kolon operates its API-Kolon distribution unit in the Chicago area.


Comments

South Korea's Kolon accused of stealing trade secrets

By Frank Esposito
Senior Staff Reporter

Published: October 19, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

China's PVC exports face challenges

August 22, 2014 2:14 pm ET

Despite robust growth in the first half of the year, China's PVC exports now faces new challenges, due to trade barriers and new capacity ramping up...    More

Image

Westminster Tool creates academy to find, train future toolmakers

August 22, 2014 2:06 pm ET

Westminster Tool Inc. begins its own Westminster Academy to find and train skilled employees.    More

Image

Prosthetic arm concept wins in student thermoforming competition

August 22, 2014 1:56 pm ET

Pressure forming company Freetech Plastics Inc. has returned with its annual Student Thermoformed Part Competition, intended to expand the exposure...    More

Image

Composite bridge maker also leading the way in installation

August 22, 2014 1:21 pm ET

Lightweight, low maintenance and strong, fiber-reinforced polymer (FRP) bridge decks finally are crossing the line from specialty projects to wider...    More

Image

Reiloy Westland to build new headquarters

August 22, 2014 12:53 pm ET

Reiloy Westland Corp. will build a 45,000-square-foot headquarters factory, as the Kansas maker of screws and barrels expands under the ownership of G...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events