A German appeals court has ruled in favor of Husky Injection Molding Systems Ltd. in its lawsuit against a company founded by former Husky employees.
The Frankfurt Supreme District Court ruled March 8 that Mold & Hotrunner Technology AG - a company started in 1996 after Husky closed its PET mold plant in Wiesbaden, Germany - took secret Husky computer-aided-design files when it created its own preform molds.
The decision upheld a 2003 judgment by the Frankfurt District Court. Despite the rulings, MHT continues to insist it did not take the CAD files.
``MHT always denied using the intellectual property of Husky,'' said Christoph Kuckels, chief financial officer of MHT in Hochheim, Germany. Kuckels said MHT wants to appeal the case to the German Supreme Court.
The Frankfurt Supreme District Court issued a cease-and-desist order that prohibits MHT from using Husky's business secrets.
Representatives of both companies disagree on how broad the order's impact will be on MHT. The court ordered MHT to refrain from using, or disclosing to a third party, eight Husky design files. MHT also is not allowed to make any 48-cavity mold preforms using those designs, without Husky's consent.
Kuckels said the order covers an old mold that MHT made in the company's early years.
But Husky's lawyer in Munich, Tilman Vossius, said the cease-and-desist order covers fundamental mold design and a much broader range of MHT products.
``The basic elements are still in use today [by MHT],'' he said.
The Frankfurt court has not determined monetary damages yet. Husky initially asked for about 7 million euros, but as MHT provides more information, that figure could go higher, Vossius said. The court said MHT has to give Husky a detailed report including shipments, volumes, prices, cost factors and profit.
Husky closed the Wiesbaden preform mold plant in 1996 and moved the operation from Germany to Husky's plant in Luxembourg.
Kuckels said Husky initially supplied mold components to MHT, but stopped when MHT became a serious competitor.
MHT made news by making some 144- and 192-cavity preform molds for machinery makers including Netstal-Maschinen AG, which competes against Bolton, Ontario-based Husky.
Kuckels said MHT has received an order for 192-cavity molds from a U.S. customer, which he would not identify.
Husky filed the lawsuit in 2001.
Mike Urquhart, vice president of Husky's PET business, said his company invests ``considerable money and effort in research and development and, in cases where our rights are violated, we must act responsibly.''