A tale of industrial espionage in Philadelphia has featured an act of honesty between two competing plastics additive suppliers and resulted in a pending court date for an engineer formerly employed at both companies.
Steven W. Thompson, a former employee of Rohm & Haas Co., was indicted June 26 in U.S. District Court in Philadelphia on a charge of mail fraud for allegedly providing trade secrets to Elf Atochem of North America, one of Rohm & Haas' chief rivals in the plastics and specialty chemicals market.
Elf Atochem officials fired Thompson and promptly returned the documents, according to company officials.
Thompson's lawyer, Andrew Grosso of Washington, said in a July 3 telephone interview that Thompson would enter a plea of not guilty at a July 17 arraignment. Grosso declined further comment on the case, while Thompson did not respond to an interview request.
In May 1996, less than a month after Thompson was hired as a process engineer at Elf Atochem's polyamide resin plant in Birdsboro, Pa., he allegedly mailed an envelope with two computer disks to a chemist at Elf Atochem's research center in King of Prussia, Pa.
The disks allegedly contained information on how to produce several Rohm & Haas products, including Paraloid KM-355 and KM-377, two impact modifiers used to enhance vinyl siding, pipe and other consumer and industrial products.
According to the indictment, Thompson worked for Rohm & Haas as an engineer from May 1992 until May 1995, when he was informed that he would be ``terminated based on poor performance.''
According to Stan Marcus, Elf Atochem's deputy general counsel for patents, the company quickly zeroed in on Thompson when it received the computer disks. The chemist who received the disks immediately turned them over to his plant manager, who then gave them to Marcus.
When Marcus saw from the postmark that the disks had been mailed from Birdsboro, he compared the postage meter number on the envelope with the number on the meter at the Birdsboro site. The numbers matched.
With the Birdsboro site established, Marcus contacted the plant's general manager, who provided a short list of Birdsboro employees with previous ties to Rohm & Haas. Since the manager knew Thompson had worked with the Paraloid line at Rohm & Haas, Thompson's name was at the top of that list.
A quick comparison of the handwriting on the envelope with the handwriting on Thompson's Elf Atochem employment application also revealed a match, according to Marcus.
Along with the Birdsboro GM and two other officials, Marcus confronted Thompson with the disks on June 14. Thompson admitted to sending them to the Elf Atochem chemist, Marcus said.
``He indicated he didn't think he did anything wrong,'' Marcus said of Thompson, who was fired on the spot. ``He said he thought he was being helpful to Atochem. I think we rocked him. I think he never expected to be confronted or to be held accountable.''
The detective work was surprisingly easy, especially since Marcus describes the 31-year-old Thompson as ``a really bright guy with a great educational background.''
``In hindsight, when you look at all the pieces, I thought it would never come together like that,'' Marcus said in a July 2 telephone interview from his office in Philadelphia. ``You think people are more devious than that.''
During his employment and termination at Rohm & Haas, Thompson had signed four separate confidentiality agreements in which he promised not to disclose any confidential or trade secret information belonging to the firm, court records showed.
Thompson was responsible for coordinating projects, providing technical support and supervising several technicians at the Rohm & Haas multipurpose pilot plant in Bristol, Pa. In that capacity, he received confidential processes developed in company laboratories and was in charge of creating standard operating procedures for production of several products, including the two Paraloid grades.
The information contained on the disks was later found on the hard drive of Thompson's personal computer in his home. Philadelphia common pleas court officials seized the computer from Thompson's Philadelphia-area home in July 1996, shortly after Elf Atochem returned the disks to Rohm & Haas.
Elf Atochem returned the disks shortly after confronting Thompson, assistant U.S. Attorney Thomas Gallagher confirmed in a July 2 interview from Philadelphia.
Rohm & Haas spokeswoman Laura Hadden described Elf Atochem's decision to return the disks as ``a class move on their part.''
``We have nothing but the highest praise for Elf Atochem,'' Hadden said in a July 2 interview from Philadelphia. ``As a competitor, they could have put the disks in a drawer and never brought it to our attention, but they didn't do that.''
Hadden declined to elaborate on the reasons for Thompson's 1995 firing. When he applied at Elf Atochem, Thompson said he was terminated at Rohm & Haas because of a reduction in the work force.
At Rohm & Haas, computer safeguards are being enforced more severely and employees are being made aware of the company's quick prosecution of the Thompson case, Hadden said.
But Elf Atochem's Marcus said concerns about trade secrets don't change, especially with the advance of modern technology.
``With today's technology, you can get a staggering amount of information on a disk you can place in your shirt pocket,'' Marcus said. ``Your security is no better than the people you rely on.''
The criminal indictment lists no value for the information Thompson is charged with taking, but points out Rohm & Haas spent $14 million on research and development for Paraloid KM-355 between 1987 and 1996.
Marcus added it is difficult to place a value on the information Thompson illegally retained from Rohm & Haas, but he described the siding and pipe categories as ``enormous markets'' for products produced by Elf Atochem and Rohm & Haas.
Industry estimates place the U.S. PVC pipe market at about $3 billion annually, while the U.S. PVC pipe market is expected to total more than $2 billion a year.
Rohm & Haas declined to release sales and production statistics for Paraloid KM-355, but Thompson's indictment claims the product has been the market leader in acrylic impact modifiers since its introduction in 1991. The product's sales growth was 1,000 percent from 1991-96, the indictment states.
Thompson currently is living in the Chicago area, Marcus said. A fall trial date is expected, Gallagher said. If convicted, Thompson faces up to five years in jail and a maximum fine of $250,000.
Marcus said the long-term relationship between the two rivals in the City of Brotherly Love won't be affected by the Thompson case.
``Our guys still want to beat Rohm & Haas, but it's like any other game,'' he said. ``There are fair ways to compete and unfair ways to compete. This guy [Thompson] was competing in an unfair way.''
