Breaking News: $919 Million Verdict for DuPont in Trade Secret Theft and eDiscovery Sanctions Case

by Philip Favro on September 15th, 2011

A federal jury returned a stunning, $919 million verdict yesterday for DuPont in a trade secret theft case.  In E.I. du Pont de Nemours v. Kolon Industries, the verdict was the culmination of a two-and-a-half year battle that DuPont waged against Kolon Industries to prove that Kolon had misappropriated key aspects of its formula for Kevlar®.

The court delivered a decisive blow shortly before trial when it found that Kolon had destroyed emails and other electronically stored information linking it to the trade secret theft.  The sanction for that spoliation was an instruction to the jury that Kolon executives and employees had deleted key evidence after the company’s preservation duty was triggered.

The verdict against Kolon is just the beginning of its problems.  DuPont will now request over $50 million in punitive damages from Kolon, another $30 million for reimbursement of its attorney fees and a permanent injunction forbidding Kolon from using the stolen trade secrets.  Not surprisingly, Kolon’s stock dropped 15% after news of the verdict reached the markets today.

The eDiscovery sanctions order and corresponding verdict make it clear that organizations should invest the time and effort to properly prepare for litigation and discovery.  As we argued in our previous post on the DuPont case, having the right tools in place could have prevented much of the spoliation – and the resulting instruction to the jury – that occurred in the DuPont case.

7 Responses to “Breaking News: $919 Million Verdict for DuPont in Trade Secret Theft and eDiscovery Sanctions Case”

  1. Weekly Top Story Digest - September 21, 2011 | @ComplexD Says:

    [...] for DuPont in Trade Secret Theft and eDiscovery Sanctions Case - http://tinyurl.com/3em3n7j (Philip [...]

  2. Proactive Retention Means Effective Preservation in eDiscovery | e-discovery 2.0 Says:

    [...] recent cases and others confirm the correlation between retention and preservation.  Simply put, proactive retention leads to better preservation [...]

  3. The September 24th weekend edition of the “Top 20 … plus more” – a compendium of e-discovery articles/vendor news/upcoming events | The Electronic Discovery Reading Room Says:

    [...] for DuPont in Trade Secret Theft and eDiscovery Sanctions Case - http://tinyurl.com/3em3n7j (Philip [...]

  4. Key eDiscovery Considerations for Selecting a Cloud Service Provider | e-discovery 2.0 Says:

    [...] for groups that fail to account for how they store, manage and discover their information.  The $919 million verdict rendered in the E.I. du Pont de Nemours v. Kolon Industries case is paradigmatic of this trend.  [...]

  5. Look Before You Leap! Avoiding Pitfalls When Moving eDiscovery to the Cloud – Electronic Discovery - ELECTRONIC DISCOVERY - E-Discovery Blog and Law Guides Says:

    [...] A cloud service provider should therefore enable automated legal hold acknowledgements.  Such technology will allow custodians to be promptly and properly notified of litigation and thereby retain information that might otherwise have been discarded.  Inadequate litigation hold technology leaves organizations vulnerable to data loss and court punishment. [...]

  6. e-discovery 2.0 » Blog Archive » New Gartner Report Spotlights Significance of Email Archiving for Defensible Deletion Says:

    [...] issue, with the DuPont v. Kolon Industries litigation foremost among them. In the DuPont case, a $919 million verdict and 20 year product injunction largely stemmed from the defendant’s inability to prevent the [...]

  7. e-discovery 2.0 » Blog Archive » Push or Pull? Deciding How Much Oversight is Required of In-house Counsel in eDiscovery Says:

    [...] Kolon Industries recently found itself on the wrong side of a $919 million verdict, the legal department for the South Korean-based manufacturer probably started to take inventory on [...]

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