Process Control sues Conair, claiming stolen trade secrets

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An eight-month discovery process has begun in Process Control Corp.’s lawsuit against Conair Group, as the two auxiliary equipment companies skirmish over three product development employees that Conair hired away from Process Control.

Much of the case hinges on software, the complex computer code that controls the companies’ extrusion-related equipment. Court documents indicate that Process Control plans to seek electronically stored information during discovery.

Declining to comment were leaders of both companies: Dana Darley, vice president and general manager of Process Control and Chris Keller, president and CEO of IPEG Inc., the parent company of Conair.

But details emerged in court documents.

Conair hired all three men in 2008, according to the lawsuit. Less than two years later, Conair introduced new extrusion and recycling products and blenders — that Process Control  charges were misappropriated proprietary technology and trade secrets. The three also breached nondisclosure agreements, Process Control alleges.

Within about three years, Conair introduced four new systems “designed in direct competition” to Process Control equipment — products that took Process Control 10 to 16 years to develop, the lawsuit charges. “Various aspects of the construction and components manufacture of defendant Conair’s aforementioned new equipment are strikingly similar, if not identical, to and copied from plaintiff’s systems. It is logical to believe that plaintiff Process Control’s proprietary software was also copied.”

Conair, based in Cranberry Township, Pa., denies the accusations. “Conair’s equipment was developed independently of plaintiff’s systems and without using any information that was taken from plaintiff, was not readily available in the industry or could not be reasonably reverse engineered. In short, no trade secret knowhow belonging to plaintiff was utilized in the development of Conair’s equipment and systems.”

Process Control also charges Conair that violated its trademarks and trade names and engaged in unfair competition and trade practices. The allegation of trademark infringement comes from Conair’s TrueBlend EXT extrusion control blenders system, very similar to Process Controls’ EXG brand.

Process Control filed the lawsuit Dec. 27 in U.S. District Court in Atlanta. The company wants an injunction against Conair and damages.

In a June 16, filing, District Judge Robert L. Vining Jr. set an eight-month discovery period, so both sides can collect information, such as software code and other product and financial data in electronic form.

The case may never get to trial. It appears there is a possibility of a settlement after discovery, and both sides will hold settlement tanks before the close of the discovery process, according to a preliminary report and discovery plan filed by both companies on June 13. Both sides said they held a conference May 29 to discuss settlement discussions.

One of the employees, Alan Landers, is named as a defendant with Conair. Landers worked at the Atlanta-based Process Control since 1990, becoming general manager around 2002, until he left to work at Conair. His Conair titles have included blender product manager and extrusion engineering manager.

The other former employees identified in the lawsuit — but not named as defendants — both developed control software are Barry Hammond and Frederich Kuehnel. According to the suit, Hammond worked at Process Control from 1992 until leaving. In the latter years, he was a product development engineer and software engineer supervisor, who also did software programming. Kuehnel, who worked at Process Control process from 1998 before he left for Conair, was a software programmer who developed proprietary driver software.

Landers allegedly encouraged the software developers to leave Process Control and move to Conair, the lawsuit contends.

The products involved in the dispute are Process Control’s Gravitrol extrusion control system, X Series continuous blenders, Guardian gravimetric batch blenders and ASR automatic scrap recycling system. Conair products are the TrueWeigh Extrusion Control System; TrueBlend EXT Gravimetric Extrusion Control Blender, the ScrapSaver In-Line Extrusion Scrap Reclaim System and SmartBlend control system.