DETROIT — A highly public and fractious lawsuit between two of the world's largest automotive resin suppliers ended with a whimper after only eight days, with General Electric Co. the apparent victor.
On April 1, Dow Chemical Co. filed a detailed, 36-page complaint in state Circuit Court in Pontiac, Mich., against GE of Fairfield, Conn., and GE Automotive engineer Darin Evans. Dow alleged that its competitor deliberately pirated plastics trade secrets by stealing away 14 Dow employees over a two-year period.
On April 9, the case ended with a brief joint statement from the two sides saying that they had resolved their differences. The statement was released at 8:30 a.m. — the same time the companies were to appear in court to contest the continuance of a temporary restraining order barring GE from further recruitment at Dow.
According to sources in both the plastics and legal arenas, the suit would not have been settled so quickly if Dow had not backed off its demands.
``The only way to look at it is a victory for GE,'' according to a lawyer who handles plastics industry cases. ``The quick settlement sends a signal that [Dow] didn't get what it wanted because the problem wasn't as bad as the company might have thought.''
On lawyers' advice, terms of the settlement were not disclosed,
but the companies revealed that no money changed hands. Dow had sought monetary damages in an amount that was to have been determined during the suit's discovery phase.
The settlement was the culmination of three days of intense meetings between Dow Executive Vice President Anthony Carbone and GE Plastics President Gary Rogers, according to GE spokesman Bruce Bunch. The companies exchanged a flurry of information in the past week, Bunch added.
Officials at both firms would not discuss the case, but Bunch said the suit melted as fast as the spring snow in New England. In a prepared statement, Rogers said: ``GE denies the allegations in the suit and has a rigorous confidentiality policy. We are pleased, however, to have worked out a business resolution.''
Dow's Carbone released this statement: ``We are satisfied that our legitimate business interests are protected by the provisions of the agreement we have reached.''
The suit had asked GE to stop using Dow trade secrets, end contact with current employees to entice them to leave the firm, return confidential documents and transfer former Dow employees to positions where they could not communicate secrets.
The companies did not disclose whether GE agreed to any of those demands.
The meetings between Carbone and Rogers began after GE filed a response to the lawsuit April 2 that attempted to punch a hole in one of Dow's key contentions — that a confidential Dow document on ABS global issues had been reissued almost verbatim at GE. The document was the only one named in the suit that was alleged to have been stolen from Dow.
Dow alleged that the culprit was Daniel Kaufman, a Dow senior product market manager who left the company Dec. 27, 1995, to work as regional marketing director at GE Plastics' headquarters in Pittsfield, Mass.
Kaufman received a letter from Dow managing counsel Bruce Kanuch on Aug. 2 admonishing him for writing the document and reminding him that he had signed a confidentiality agreement at Dow. Both Kaufman and GE counsel John Young fired back letters to Kanuch saying they were puzzled by the allegations because they did not disclose confidential material.
Kanuch then wrote a letter to Kaufman on Sept. 25 enclosing the Dow and GE documents.
However, the document in question might have been more public than Dow realized. Kaufman explained in another letter to Kanuch that most of the information came from a presentation by Geoff Kemble, industry manager at GE Plastics for pipe and extrusion, at a Plastic Pipe & Fittings Association spring meeting Feb. 19-22 in Rancho Mirage, Calif.
Kemble's presentation included forecasted ABS growth rates, an industry overview of pounds produced by resin companies and consumption figures worldwide. Kemble credited the information to, among other sources, the Society of the Plastics Industry Inc. in Washington, and trade publications, including Plastics News.
Another Dow contention was questioned by sources at the Detroit chapter of the Society of Plastics Engineers. Dow had alleged in the lawsuit that GE subsidiary Polymerland in Huntersville, N.C., had sent a recruitment letter aimed at Dow employees on a mailing list of SPE's Detroit-area members.
Plastics industry sources, who did not want to be identified, said Polymerland actually mailed the letter to all Detroit-area SPE members, not just pinpointing Dow employees.
Bunch said last week that although the suit involved 14 former Dow employees recruited since 1995, the company had hired 1,000 people in that time period. ``You draw your own conclusions,'' he said.
Although the case has been resolved, it did highlight the importance to Dow of its Pulse polycarbonate/ABS resins. Dow's material is being used for structural instrument panel cross-beams in Chrysler Corp.'s Jeep Cherokee and Dodge Dakota.
A Dow affidavit said defendant Evans was an active participant in a plan to implement the unique design on the Dakota. Further, Evans had developed a solution to a problem regarding the integral air-bag door for the panel, the suit alleged.
In addition, the suit said Evans was the leader of a team that prepared a technical package in Dow's bid for an instrument panel redesign on Chrysler minivans. GE Automotive in Southfield, Mich., where Evans now works, eventually was awarded the contract, according to the complaint.
``The case illustrates the relative importance of Dow's structural materials for instrument panels and door trim panels,'' said Robert Eller, a consultant with Robert Eller Associates in Akron, Ohio. ``It's up to the courts to decide what's legal, but the technology is significant.''