The amazingly strong synthetic fiber known as Kevlar is used around the world in a number of applications such as fiber optic cables, body armor, and automotive and industrial products. DuPont spent years on R&D to develop Kevlar, which is now thoroughly protected by US patent law.<!- mfunc feat_school ->
Despite this protection, the South Korean company Kolon Industries wanted to develop their own product to compete with DuPont. Instead of funding the massive research needed to do so, they decided to steal DuPont’s trade secrets—a federal crime.
Two of DuPont’s former employees who were closely involved with the technical R&D of Kevlar had held onto proprietary documents after they left the company. Despite having signed non-disclosure agreements, the two men accepted jobs as consultants with Kolon and shared their information with the South Korean company.
When word got out at DuPont that a former employee was asking his previous coworkers detailed technical questions about Kevlar, the company’s management contacted the FBI. In concert with the Department of Commerce’s Export Enforcement Office, these federal agents launched an investigation.
One of the men—Michael David Mitchell—agreed to cooperate with the authorities and exchanged emails with Kolon representatives. He also allowed his calls to them to be monitored and hosted a face-to-face meeting in a Richmond hotel, which was both audiotaped and videotaped by the FBI.
DuPont assisted greatly in the investigation and provided more than a million pages of documents, thus enabling the case to quickly move forward. The FBI and DOJ were able to ensure that DuPont’s proprietary information from the case remained secret.
The case resulted in the indictment of Kolon industries and five of its executives on charges of the theft of trade secrets. The company was ordered to pay $275 million in restitution and $85 million in criminal fines.
The success of this federal case should serve as a warning to other companies that the US goes to great lengths to protect its trade secrets.