US court overturns DuPont’s $920 Mil verdict in Kolon case

Kolon has come from behind by gaining a court ruling in its favor in a 920 million U.S. dollars legal dispute over a high-tech synthetic fiber with DuPont.

The U.S. 4th Circuit Court of Appeals ordered on Thursday (U.S. time) a retrial by rejecting a lower court ruling in favor of DuPont in the damage suit. The U.S. chemical giant had filed against Kolon Industries by accusing the latter of violating its trade secret regarding a type of aramid fiber. The appellate court made the decision on Thursday, saying that Kolon’s argument and evidence had not properly been reviewed in the lower court trial. As a result, the Korean company is able to breathe a sigh of relief as the court granted Kolon a new trial and said the case should be reassigned to another judge.

Aramid fiber is super-strong synthetic fiber that is used to make bullet-proof vests and helmets, firefighting gears and golf clubs. With 5 times stronger than steel on an equal weight basis, fiber measuring 5 mm thick in diameter can lift a two-ton automobile. Since its melting point is above 500 degrees Celsius, it is called “dream fiber” or “super fiber.” After developing the fiber in 1965, successfully commercializing the products in 1973, DuPont is selling under the "Kevlar" brand. Teijin of Japan also developed aramid fiber “Twaron” in 1985 by using the same method as DuPont’s, and has been sharing the global market half and half thus far, controlling more than 90 percent share of the market.

Kolon, a late comer, commercialized its aramid fiber in the name of “Heracron” in 2005. In February 2009, DuPont filed damage suit, claiming that Kolon stole trade secret by hiring Michael Mitchell, a former DuPont engineer. In August 2012, the lower court ordered Kolon to halt the production and sale of Heracron for 20 years, on top of massive compensation for damage. After filing a request for suspension of execution, Kolon has managed to continue producing the product. However, since order for production ban could be placed anew anytime, the Korean company could not afford to make additional investment and R&D efforts.

On Thursday`s ruling, the U.S. appellate court threw out the verdict back to the Eastern District of Virginia, and ordered the court to form a new judge panel that excludes Robert Paine, who served as the presiding judge for the initial trial. “The aramid fiber market has been only worth 2 trillion won (1.89 billion dollars) per year due to its high price, but it has huge potential owing to its high versatility,” a source at Kolon said. “If we win in the retrial, it will become a new growth engine for our business group.”