Urethanes in the Courtroom
St. Louis chemical company accuses rival of stealing trade secrets
St. Louis specialty chemicals company US Polymers-Accurez is suing competitor Kane International, alleging theft of trade secrets and a years-long conspiracy to destroy its business. The lawsuit seeks at least $30 million in damages.
From its manufacturing facility at 300 East Primm Street in the Patch neighborhood, US Polymers-Accurez makes urethane ink resins used to manufacture ink. One of the companies it sold ink resins to for nearly two decades up until this year was Rye, N.Y.-based Kane.
After doing business with one another for nearly two decades, a back-and-forth volley of lawsuits between the two companies began this summer.
In its lawsuit filed June 20 in federal court in St. Louis, Kane sued US Polymers-Accurez for breach of contract, alleging US Polymers-Accurez stopped supplying products to Kane earlier this year and contacted Kane’s ink resin customers in a quest for their business, in violation of a noncompete provision in their supply agreement.
Kane and US Polymers-Accurez entered into a supply agreement in 2009 in which US Polymers-Accurez agreed to make Kane’s urethane ink resins for printing inks that Kane sells to its customers, according to Kane’s lawsuit. Kane also alleged US Polymers-Accurez used Kane’s product formulas and product names to mislead Kane’s customers and undermine customer relationships. Kane’s lawsuit went to arbitration on Sept. 5.
US Polymers-Accurez filed a separate lawsuit Sept. 7 alleging Kane, Kane President and CEO Thomas Kohlberg, Kohlberg’s grandson Matthew Grodd, and Parker Ingredients (a Kane affiliate company) misappropriated US Polymers-Accurez’s trade secrets to deceive customers over the past decade.
“The Kane conspirators took substantial steps to conceal from US Polymers-Accurez and end user customers in the ink resin market that Kane did not manufacture the products it distributed or own the formulas for those products, maintained no manufacturing or research facilities, and had no technical capabilities to provide support for the intricate chemical products sold to end user customers in the ink resin market,” US Polymers-Accurez’s lawsuit alleges.
US Polymers-Accurez accuses Kane of a “vast conspiracy of bribery, theft and misappropriation” over several years that included secret payments totaling more than $200,000 from Kane to former US Polymers-Accurez employees to eliminate US Polymers-Accurez from the supply chain. US Polymers-Accurez alleged Kane paid some former US Polymers-Accurez employees and supplied them with phony business cards with Kane logos and email addresses, in addition to a “secret cellphone” for one employee to confuse customers about who they worked for.
“But for the Kane conspiracy, and the charade that Kane created to envelop its failed but desperate attempts to stay current in the sales of ink resin and shellac chemical formulas, US Polymers-Accurez would not have suffered immeasurable injury to its goodwill, enterprise value and customer relations,” US Polymers-Accurez’s lawsuit alleges.
Attorneys for US Polymers-Accurez did not respond to requests for comment. Reached by phone Tuesday, Kane International’s CEO Thomas Kohlberg declined to comment on the pending litigation.