A South Korean company and five of its executives have been charged with stealing trade secrets from DuPont in an attempt to capture some of the market for DuPont’s Kevlar, the flexible “stronger than steel” synthetic fiber used in a wide range of products, including body armor, automobile parts, clothing and mooring lines for boats.
The Department of Justice on Thursday announced the indictment of Kolon Industries Inc. and the executives on charges that could bring years in prison and big fines upon conviction. In addition, the DOJ is seeking at least $225 million in forfeitures from the company.
Kolon is also accused of trying to illicitly acquire knowledge of Twaron, a synthetic fiber developed by Teijin Limited of Japan.
“By allegedly conspiring to steal DuPont’s and Teijin’s intellectual property, Kolon threatened to undermine an economic engine at both companies,” said Assistant Attorney General Lanny Breuer, head of the Criminal Division. “Developing Kevlar and Twaron was resource-intensive work, and required strategic investment and ingenuity.”
The charges were brought in the Eastern District of Virginia, whose United States Attorney, Neil H. MacBride, said Kolon had engaged in a “massive industrial espionage campaign” to bring its own synthetic fiber, Heracron, to the market to compete directly with Kevlar. “This indictment should send a strong message to companies located in the United States and around the world that industrial espionage is not a business strategy,” MacBride said.
The indictment, returned in Richmond, charges Kolon with one count of conspiring to convert trade secrets, four counts of theft of trade secrets and one count of obstruction of justice. The DOJ said Kolon’s illicit pursuit of trade secrets went on for years and included hiring present and former employees of DuPont and Teijin, then plying them for confidential information about their companies’ products.
The criminal charges come about a year after a federal civil jury in Richmond awarded DuPont more than $919 million after finding that Kolon and its U.S. unit wrongfully obtained DuPont’s proprietary information about Kevlar, Bloomberg noted in its report about the indictment.