Kolon Industries pleads guilty in DuPont Kevlar trade secrets case

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Kolon Industries Inc has pleaded guilty to conspiring to steal DuPont Co’s trade secrets, the U.S. Justice Department said on Thursday, bringing to a close a long-running dispute involving a fiber used to make Kevlar bulletproof vests.

The South-Korea based company will pay $360 million, of which $275 million is restitution to DuPont and $85 million in criminal fines, as part of the deal, U.S. prosecutors said.

Kolon pleaded guilty to one count of conspiracy to convert trade secrets before U.S. District Judge Anthony Trenga in federal court in Alexandria, Virginia.

DuPont had accused Kolon of the theft of 149 of the U.S. chemical maker’s trade secrets relating to the latter’s Kevlar para-aramid fiber, used to make body armor, fiber-optic cables and tires.

DuPont said in a statement it had entered a settlement agreement with Kolon that resolves all outstanding litigation between the two companies.

“The financial terms of the settlement include up-front and ongoing payments to DuPont,” the statement said. Further terms and conditions of the settlement are confidential, the company added.

DuPont had won a $919.9 million jury verdict in a Virginia federal court in September 2011, but that ruling was tossed on appeal and a new trial ordered.

The separate criminal case was brought by U.S. federal prosecutors in August 2012, in which Kolon and five executives were criminally charged.

Kolon’s President and CEO Dong Moon Park said in a statement that the settlements allowed the company to focus on its business operations “while ensuring that appropriate protections are in place so as to avoid comparable disputes in the future.”

The case against the five executives remains ongoing as none of the individuals has come to the United States to face the charges, the U.S. Justice Department said.

DuPont began litigation in February 2009, claiming that Michael Mitchell, a 24-year DuPont veteran, had taken proprietary information about Kevlar when he left in 2006 to start his own fiber business, and later shared it with Kolon.

An antitrust countersuit from Kolon was dismissed in 2012.

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