Fourth Circuit Hearing Argument on Propriety of DOJ Suboenas in Trade Secrets Case

A first here at Womble Trade Secrets Blog - we are blogging about another blog's post. The BLT (Blog of Legal Times) published a fascinating piece yesterday regarding an argument that has been heard by the United States Court of Appeals for the Fourth Circuit in Richmond. You can find their piece by clicking on the title to this post or here: http://legaltimes.typepad.com/blt/2011/03/doj-defending-grand-jury-subpoenas-in-trade-secrets-theft-investigation.html.

Anyway, the DOJ is apparently investigating Kolon Industries, a maker of high-strength fiber that competes with DuPont's Kevlar brand technology, as to Kolon's possible involvement in a scheme to misappropriate DuPont’s Kevlar brand technology or trade secrets regarding that technology. Former DuPont engineer Michael Mitchell pleaded guilty and was sentenced about a year ago to 18 months in federal prison for violations of the economic espionage act.

According to the DOJ, see http://www.bis.doc.gov/news/2010/doj03182010.htm, in 2007 Mitchell began to work as a consultant for Kolon. Kolon is a Korean company that makes a product named Heracron, which competes in the market with DuPont's Kevlar for use in a number of applications. In support of his plea, Mitchell acknowledged that on September 5, 2007, he emailed much of the contents of a DuPont proprietary spreadsheet document entitled "Denier Economics" to an official with Kolon. "Denier" is a term used to describe the weight per unit length (linear density) of a continuous filament or yarn. The Denier Economics spreadsheet contained sensitive business trade secret information related to DuPont's production capacity for Kevlar yarn in a variety of denier types.

Included in the information for each denier type were specific figures relating to annual production, unit capacity, spin speeds, and several factors relating to line efficiency (such as percentage yield and percentage up time). The Denier Economics spreadsheet was closely held and distributed to a small number of DuPont personnel on a need-to-know basis only.

Anyway, folks - this appears to all be related to what's going on at the Fourth Circuit and we'll report back what we can find out about this interesting issue.