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INVISTA Sues Rhodia in Delaware for Theft of Trade Secrets

WILMINGTON, Del.--(BUSINESS WIRE)--November 13, 2008--In state court here yesterday, INVISTA filed suit against Rhodia for theft and misappropriation of INVISTA's world-leading chemical process technology. INVISTA originally filed a claim on Aug. 15 in federal court in the Southern District of New York, outlining how Rhodia and DuPont have teamed up to misappropriate INVISTA's world-leading adiponitrile (ADN) technology and are unlawfully using INVISTA's trade secrets to expand in the nylon chemicals business. On Nov. 6, following an Oct. 30 jurisdictional ruling by the federal court, INVISTA amended that New York federal lawsuit to focus on DuPont's misappropriation of intellectual property, unfair competition, and breach of contracts, and then filed this lawsuit in Delaware against Rhodia. The two suits seek damages and declaratory and injunctive relief to halt Rhodia's and DuPont's misconduct. "These claims are needed to stop Rhodia and DuPont from unlawfully using INVISTA's intellectual property to build an ADN manufacturing plant in Asia or elsewhere," said Mary Beth Jarvis, INVISTA spokesperson. The INVISTA trade secrets at issue relate to its proprietary process for producing ADN, a critical intermediate chemical used in the manufacture of nylon 6,6. INVISTA bought the original technology several years ago from DuPont as part of a $4.2 billion transaction and has built upon that technology to earn a world-leading position in the manufacture of ADN, Jarvis said. When it sold the technology, DuPont agreed not to compete against INVISTA or invest in competitors for an agreed-upon period, which has yet to expire. Public statements by Rhodia and DuPont indicate that Rhodia is using INVISTA's trade secrets to develop an ADN facility in Asia. DuPont has disclosed that it is an investor in Rhodia's ADN expansion plans. As explained in the lawsuit, Rhodia obtained unlawful access to the trade secrets in part through a France-based joint venture between affiliates of INVISTA and Rhodia. In a separate issue going back to the 2004 agreements by which DuPont sold its textiles and interiors business to INVISTA for $4.2 billion, DuPont sued INVISTA on Tuesday in the Southern District of New York, claiming unauthorized use of trade secrets in the nylon engineering polymers business. "INVISTA continues to fulfill all of its obligations under the various agreements related to the INVISTA purchase," said Jarvis on that issue. "DuPont specifically agreed to a 5-year non-compete in the engineering polymers market space. That non-compete period expires next spring, and until then INVISTA is not manufacturing, distributing, selling or reselling engineering polymers." Tuesday's lawsuit is DuPont's second attempt to block INVISTA from competing in the engineering polymers market. In 2006, the Southern District of New York rejected DuPont's claims. "This is another attempt by DuPont to call into question its contractual obligations and rights arising out of the INVISTA sale. INVISTA has and will continue to uphold its responsibilities. We expect and will press DuPont to fulfill its obligations, ranging from confidentiality and protection of intellectual property it sold to INVISTA to environmental, health and safety indemnities," Jarvis said. In March, INVISTA sued DuPont seeking damages and a court order requiring DuPont to fulfill its contractual obligations arising from safety and environmental noncompliance while DuPont owned certain INVISTA sites. INVISTA is one of the world's largest integrated producers of polymers and fibers, primarily for nylon, spandex and polyester applications.

Full post as published by The Trade Secrets Vault on November 20, 2008 (boomark / email).