Camarillo, Calif.-based MachiningCloud, the developer of a cloud-based Industry 4.0 platform, has filed a lawsuit seeking more than $330 million from Pittsburgh-based Kennametal Inc., a provider of tooling equipment and engineered components, for willful and malicious contract breaches and misuse of its intellectual property.
The lawsuit alleges Kennametal used MachiningCloud's intellectual property to enrich itself while failing to pay commissions at the expense of MachiningCloud.
Filed in the Superior Court of the State of California, County of Ventura, the lawsuit says Kennametal stole trade secrets and contractually protected confidential information from MachiningCloud and failed to pay clearly owed commissions pursuant to an agreement between the two companies.
The lawsuit says Kennametal contracted with the plaintiff to build it a proprietary sales platform called "Novo." Then, over time, Kennametal allegedly used the company's confidential information and intellectual property to build its own competing platform.
Kennametal officials called the allegations "entirely without merit."
"We have received notice of the complaint, and believe it is entirely without merit," a company spokesperson said. "We will continue to assess the claim and vigorously defend it. Beyond that, we have no additional comment as this is active litigation."
The MachiningCloud release says, "Kennametal went as far as to file an illegitimate patent application for its knock-off platform. At the same time Kennametal failed to pay MachiningCloud commissions it owed on more than $1 billion of transactions initiated by or through the use of Novo."
In doing so, the lawsuit asserts, that Kennametal breached provisions in the agreement regarding confidentiality, payment rights, and audit and accounting rights; violated the California Uniform Trade Secrets Act; and breached the implied covenant of good faith and fair dealing.
MachiningCloud is seeking in excess of $330 million in cash damages, punitive and exemplary damages and a court injunction to stop Kennametal from further acquiring, disclosing or using MachiningCloud's trade secrets as well as to shut down Kennametal's allegedly knock-off system and platform.
MachingCloud tried to resolve the issues out of court, the release also says.
"We believe this is a simple case of a large company trying to take advantage of a smaller company by stealing its trade secrets and contractually-protected confidential information and then refusing to pay commissions it clearly owed. We are confident in our legal position, and we intend to hold Kennametal accountable for its willful and malicious actions."
For the plastics industry, Kennametal provides tooling equipment and engineered components, including underwater pelletizing die plates.
"Each year we design and engineer up to 100 new dies and recondition over 200 dies. Companies with multiple production sites around the world rely on Kennametal for our pelletizing die plates, which provide the best thermal performance and highest wear resistance," the company website says.