Trinseo sues KBR for stealing trade secrets to seal $40m China deals
Manufacturer Trinseo has accused its competitor Kellogg Brown & Root (KBR) of purloining trade secrets used to create high-performance plastics to secure deals worth $40 million with Chinese chemical manufacturers.
According to the suit filed on November 27, at the US District Court for the Southern District of Texas, the Chinese buyers, Cangzhou Dahua New Materials (CDNM) and China Pingmei Shenma Group (PMSM), are building manufacturing plants in direct competition with Trinseo.
KBR allegedly accessed the confidential information when it collaborated with Trinseo’s former parent company, Dow Chemical, on a project in 2007 involving the construction of the Sadara chemical complex for Saudi Aramco, the filing stated.
According to Trinseo, KBR had no legitimate reason to retain the trade secrets that Dow shared with KBR for the project and that “KBR has not only retained copies of some of the data it was required to destroy, but it has also unlawfully used it to further its own business interests”.
Trinseo claimed that in May 2014, KBR decided it wanted to enter into a new business of developing an “interfacial polycarbonate technology, engineering and licensing package” to sell to chemical manufacturers around the world, with an initial focus on Chinese and Russian chemical manufacturers.
But Trinseo held that when KBR failed to secure a partnership with a reputable polycarbonate technology owner, it decided to develop a “knock-off’ version of the Dow polycarbonate technology. This, it said, kickstarted, “a zealous search for others whom KBR believed might be able to provide it with access, legal or otherwise, to Dow polycarbonate technology that KBR could then counterfeit as its own”.
Former Dow employee
According to Trinseo, that search led KBR to Stephen Harper, a former employee of Dow who Trinseo alleges either secretly retained or began to secretly acquire additional trade secrets and/or confidential information.
The filing claimed that KBR had, without Trinseo’s authorisation, obtained from Harper a critical mass of data that enabled it to create its programme “without paying the price in time, effort or expense”.
On the basis of this programme, Trinseo claimed that KBR’s technology and consulting division then secured contracts with PMSM and CDNM to build two new polycarbonate plants in China, booking approximately $40 million in revenue.
The filing said: “Trinseo has been irreparably harmed by KBR’s conduct in misappropriating and using Trinseo’s Polycarbonate Trade Secrets to enrich itself, and others, at Trinseo’s expense.”
Consequently, KBR had not only become a competitor to Trinseo in the interfacial polycarbonate licensing business, but it had also enabled other competitors to obtain, in the span of a few months, a competitive advantage it took Trinseo and its predecessor many years and millions of dollars to develop and maintain, the filing stated.
“By doing so, KBR has materially damaged Trinseo’s competitive advantages and goodwill, while also diluting the value of its trade secrets,” it added.
Trinseo also claimed that KBR’s actions would contribute to the “dramatic oversupply of competing interfacial polycarbonate resin in the marketplace” from Chinese manufacturers, leading to the “continued erosion of Trinseo’s profits” from its polycarbonate business unit.
The complaint concluded by requesting that the court grant unlimited punitive damages “since the conduct by KBR amounts to commercial bribery and a crime as defined by Texas law”.
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