Kolon pleads guilty to conspiracy, agrees to settle litigation in Kevlar trade secrets case

DOVER, Del. – A South Korean company accused of stealing trade secrets involving Kevlar technology has pleaded guilty to federal conspiracy charges and settled separate civil litigation filed by the DuPont Co., officials said Thursday.

In resolving the legal battles, Kolon Industries Inc. was sentenced to pay $85 million in criminal fines and agreed to pay $275 million in restitution to DuPont.

Federal authorities obtained an indictment in 2012 charging Kolon and five of its employees with engaging in a seven-year conspiracy — including hiring current and former DuPont employees as “consultants” — to steal trade secrets involving high-strength synthetic fibers used in products such as Kevlar body armour.

Authorities said Thursday that none of the five former Kolon executives and employees has appeared in the U.S. to face the charges, but the company pleaded guilty in federal court in Virginia to one count of conspiracy to unlawfully use trade secrets.

“Research and development are pillars of our economy, and we cannot allow anyone to obtain by theft what innovators develop through effort and ingenuity,” said Dana Boente, U.S. Attorney for the Eastern District of Virginia.

DuPont said the settlement in the civil lawsuit resolves all outstanding litigation with Kolon.

“The resolution of this litigation helps ensure the protection of our proprietary technology,” said senior vice-president and general counsel Stacy Fox.

A federal appeals court last year overturned a jury decision awarding $920 million in damages to DuPont in the civil lawsuit. The appeals court also halted an injunction that would have prevented Kolon from producing and selling its Heracron high-strength synthetic fiber products for 20 years.

Jeff Randall, a California attorney representing Kolon, said the company was pleased to resolve six years of complicated and hard-fought trade-secret and antitrust litigation with DuPont.

“Kolon is relieved and pleased all of their disputes with both the government and DuPont are now resolved,” Randall said, adding that Kolon can now focus on the global sales and marketing of its Heracron products.