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Massive Trade Secret Verdict Awarded to Alpha Mining Systems Against Former Employee

By Todd

The Sarasota Herald-Tribune is reporting a $19.7 million trial verdict in favor of Alpha Mining Systems and against its former employee, Sam Vance. Interestingly, the article reports that Vance did not show up for any court appearance in the matter - thus, suggesting that this was a default judgment that went uncontested.

The court found that in early 2005, Vance began working for China-based competitor Guizhou Tire Co. while still employed with Alpha. He would take Guizhou tire orders on his wife's cell phone and through his personal e-mail account to avoid detection. He also handed over pricing and profit margin information and customer lists to Guizhou, which paid him a commission on every tire sold, records show.

Beginning in August 2005, Vance went to work for Dubai, United Arab Emirates-based Al Dobowi Group, an upstart mining company. Vance gave Dobowi all of Alpha's trade secrets, from pricing information to its customer list to the design blueprints for Alpha's specialty tires, court records say. The blueprints alone are a wealth of information, containing all the specifications of building a very unique set of tires designed to work in mines worldwide -- from the tread design to the rim flange heights to the ply ratings.

Court documents stated "defendant advised Alpha's customers that they could receive the same specialized 'Alpha' tires by dealing directly through" Guizhou, the Chinese company. Alpha's losses mounted quickly, court records show. For example, Del-Nat Tire Corp. and American Tire Corp. were buying a combined average of $1.9 million per month from Alpha until April 2005, when they stopped buying anything. From April 1, 2005, to Jan. 15, 2008, Alpha lost more than $10 million from Del-Nat alone, the court found.

At $19.7 million, the penalty ranks among the largest trade secret judgments in recent Florida history.

We'd bet that Mr. Vance is not living in the United States anymore - or, if he is, he is feverishly working to shield his assets from Alpha Mining's reach.

Full post as published by Womble Trade Secrets Blog on January 31, 2008 (boomark / email).