Trade Secret Theft and Economic Espionage Involving Mining Tires

Inventors Digest has just released the fascinating trade secret and corporate espionage tale of Jordan Fishman, the designer and distributor of massive "underground mining tires" - some of which stood as tall as a grown man, could shoulder 50 tons and sold for upward of $6,000 apiece.

The story reveals that Fishman hired a long-time friend named Sam Vance as his company's (Fishman's company is called Alpha Tyre) marketing manager. Vance then surreptitiously copied all of the relevant drawings and fabrication details for these mining tires and worked with Alpha's China-based joint venture partner and tire manufacturer, China-based Guizhou Tire Company or GTC, and Vance encouraged Alpha’s customers to cancel their orders with Alpha and place their orders directly with GTC.

Fishman found out about the scam, fired Vance, and sued him in Florida.

During discovery in the Florida litigation, Fishman found out Vance also had met secretly in early 2005 with Surender Kandhari, the chairman and managing director of Dubai-based tire distributor Al Dobowi, and John Canning, a consultant for the company, at the Jefferson Hotel in Richmond, Va. Canning had known Fishman for many years and previously worked at Alpha.

At the meeting, Vance offered to provide Al Dobowi with Alpha’s customer lists, pricing information, customer databases and – most important – the proprietary blueprints drawn by Fishman necessary to make molds of Alpha’s highly specialized tires.

Vance began working for Al Dobowi in the summer of 2005 from his office in Tazewell, Va. Meanwhile, LingLong copied Fishman’s blueprints – clearly labeled as proprietary documents – so it could make molds and produce the tires.

By the end of the first quarter of 2006, Al Dobowi and LingLong were producing nearly the full range of Alpha’s underground mining tires and were filling orders for customers once loyal to Alpha – all without Fishman’s knowledge.

Fishman, in fact, came across the forged tires at a tradeshow in Las Vegas in 2006. The tires used the same specs, markings, tread design and even the same size designation – a size that Fishman had conceived and were not based on any conventional tire sizing. The only difference was a variance of the name. Fishman called his tires the Mine Mauler. LingLong called its tires the Mine Handler.

“I saw our tires on display at the LingLong booth,” Fishman tells Inventors Digest. “There were about 25 of them on display. I never experienced something like this before. I pulled the tires out onto the floor and took pictures of them.

Well - you know how this one ends.

On Jan. 24, 2008, the Florida court found that Vance provided Al Dobowi with Alpha’s trade secrets, including Alpha’s tire drawings, profit-margin reports, production schedules and buying prices and enabled Al Dobowi to enter the market for underground mining tires.

The court also found that Alpha suffered irreparable damage because of Vance’s theft of Alpha’s trade secrets. The court awarded Alpha $19.6 million compensatory damages and $39.3 million in exemplary damages.

But Vance fled to China, where he reportedly now resides.

Alpha subsequently sued Al Dobowi and a bunch of other companies in on the scam and was awarded an additional $26 million in damages for unfair competition.

This piece is an interesting story and read. You can read the piece by clicking on the title to this blog.