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26 March 2020Sarah Morgan

Michelin hits ex-employee and rival with second trade secrets suit

Tyre maker  Michelin has accused a former employee of 13 years of stealing “enormously valuable” trade secrets and taking them to a competitor.

In a suit filed at the US District Court for the District of South Carolina on Monday, March 23, Michelin claimed that its rival  Carlstar had pursued Michael Dotson for his access to Michelin’s trade secrets; it’s now seeking a preliminary injunction as the case progresses.

Michelin’s trade secrets include instructions for mixing natural rubber with other components, testing methods, and quality control processes.

“In stark contrast to Michelin’s identity as an innovator, Carlstar has revealed itself a misappropriator. Rather than invest in innovation of its own, Carlstar poached a key research and development (R&D) employee of Michelin’s to shortcut the competitive process,” said the claim.

According to the suit, Dodson, who worked in Michelin’s R&D department, “furtively copied files” containing Michelin secrets onto an external hard drive before leaving the tyre maker.

“Defendants tried to conceal their misappropriation scheme from Michelin. Dotson affirmatively misrepresented to Michelin that he would not be working in R&D at Carlstar. To support that deception, Carlstar omitted the terms ‘engineering and R&D’ from Dotson’s title, even though, internally, the highest levels of Carlstar admitted hiring him to be its new R&D leader,” added the suit.

When he arrived at Carlstar, Dotson began working to incorporate Michelin’s secrets into Carlstar’s processes, said Michelin, adding that it was alerted to this by a Carlstar whistleblower.

Michelin alleged that it confronted Carlstar with the accusations, but Carlstar feigned ignorance and claimed that its own investigation into the issue had found no wrongdoing.

According to the suit, after an investigation, Michelin discovered that Dotson had accessed at least 100 Michelin files on his Carlstar computer from the personal hard drive in his first four months at Carlstar.

The defendants stole more secrets in an “increasingly brazen fashion”, during Dotson’s first week with Carlstar, said Michelin. Dotson also reportedly texted a friend, who was employed in Michelin’s R&D department, to “coax Michelin’s rubber-mixing trade secrets out of him”. The unnamed employee was subsequently fired.

In addition to seeking a preliminary injunction to stop the use of trade secrets, Michelin has also asked the court to order Carlstar to provide access to its design, manufacturing, quality assurance, and training processes to Michelin, and order the destruction of the existing inventory of products using the trade secrets.

This is the second time Michelin has taken Carlstar and Dotstar to court over the alleged trade secret theft. The trial in the first case, at the same district court, is expected to be heard in September 2020.

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