Kolon Industries Responds to U.S. Department of Justice Allegations

WASHINGTON--()--Kolon Industries takes the allegations made today by the U.S. Department of Justice (“DOJ”) very seriously and will defend vigorously against the charges relating to alleged trade secrets concerning DuPont’s and Teijin’s aramid fiber products.

The DOJ’s allegations unfairly damaged Kolon’s reputation as a company that respects intellectual property rights and has developed its own aramid fiber product over the past 30 years. Kolon is also concerned that DOJ’s allegations undermined its freedom to benefit customers through legitimate competition in the United States and elsewhere.

“It’s always unfortunate when companies like DuPont resort to trade secret litigation to attempt to block legitimate competition, particularly in an area of technology that is four decades old. DuPont’s aramid fiber technology is the subject of hundreds of expired patents that have been in the public domain for dozens of years for any competitor to use legitimately. It is disturbing that the DOJ would bring charges that effectively assist DuPont in improperly extending its monopoly over aramid fiber technology beyond the limited term provided by the U.S. patent laws,” says Jeff Randall of Paul Hastings LLP, counsel for Kolon. “DuPont reaped the benefits of monopoly power to the extent permitted by law, including higher prices to consumers of aramid fiber products, for the duration of its patent coverage. Now that DuPont’s key patents have expired, competitive products such as Kolon’s Heracron® should be free to compete on the merits to the benefit of consumers in the United States and internationally,” he continued.

“Often in legitimate trade secret disputes involving the government, prosecutors will bring a criminal case, which then eliminates the need for any subsequent civil case,” Randall continued. “That’s not what happened here. Despite its ongoing investigation since June 2007, the DOJ initially opted not to prosecute Kolon, and instead allowed DuPont to engage Kolon in more than three and a half years of civil litigation. That raises significant questions as to what DOJ now seeks to accomplish, particularly given that the legitimacy of DuPont’s civil verdict soon will be tested on appeal,” added Randall.

Kolon’s ability to compete in the global aramid fiber market is the result of a 30-year history of R&D including work in aramid fibers dating back to 1979 in joint development with the Korea Institute of Science and Technology (KIST).

The use of publicly available information, such as patents and technical publications, is a common feature of scientific and technical research and development and a foundational purpose of patent systems. Similarly, companies like Kolon and DuPont commonly hire consultants, including those who previously worked for competitors. Doing so is not a crime but simply part of what constitutes vigorous competition.

The action taken by the DOJ does not lessen Kolon’s resolve to fight what it considers to be an unfair verdict in the civil case brought by DuPont. Kolon has solid legal and factual grounds on which to base an appeal, including procedural and evidentiary errors made before and during the trial, lack of proof to support the core elements of DuPont’s trade secret claims, and deeply flawed theories of trade secret definitions and harm suffered by DuPont that multiplied the purported damages far out of proportion to the conduct alleged.

Kolon looks forward to a fair trial on the charges brought by the DOJ and is confident it will be vindicated. Kolon is also confident of a positive resolution of its civil dispute with DuPont through the appellate process.

Paul Hastings is a leading global law firm with offices in Asia, Europe, and the United States. We provide innovative legal solutions to financial institutions and Fortune 500 companies. Please visit www.paulhastings.com for more information.

Contacts

Paul Hastings LLP
Jeff Randall, 202-551-1812
jeffrandall@paulhastings.com

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Contacts

Paul Hastings LLP
Jeff Randall, 202-551-1812
jeffrandall@paulhastings.com