894 F. Supp. 2d 691
E.D. Va.2012Background
- DuPont sued Kolon for violating the Virginia Uniform Trade Secrets Act by misappropriating 149 trade secrets used to manufacture Kevlar®.
- A jury found willful and malicious misappropriation and awarded DuPont approximately $919.9 million in compensatory damages and $350,000 in punitive damages.
- DuPont filed a Motion for Permanent Injunction under Va. Code Ann. § 59.1-337A seeking to enjoin Kolon from producing para-aramid fiber and from disclosing or using misappropriated trade secrets.
- Kolon had engaged former DuPont employees and consultants to obtain and use DuPont trade secrets, including copying secrets from an employee’s computer.
- The court analyzed whether to apply the federal four-factor eBay standard or Virginia-law principles under Erie to decide permanent injunctive relief after a verdict.
- The court ultimately applied Virginia law and determined that a production injunction, not merely a use-and-disclosure injunction, was necessary to remedy the misappropriation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether eBay four-factor test applies to post-verdict VUTSA injunction | DuPont: apply eBay to grant permanent injunctive relief | Kolon: Erie dictates Virginia law governs the injunction decision | Erie-based Virginia law governs the injunction analysis |
| What factors under Virginia law govern whether to grant an injunction | DuPont: factors permit broad relief to stop misappropriation | Kolon: standard factors limit relief | Virginia factors permit a discretionary injunction balancing equities and public interest |
| Scope of the injunction (production vs use) and geographic extent | DuPont seeks production and worldwide injunction | Kolon argues limits or narrower scope is appropriate | Production injunction warranted; worldwide scope appropriate to protect secrecy |
Key Cases Cited
- Capital Tool & Mfg. Co., Inc. v. Maschinenfabrik Herkules, Hans Thoma GmbH, 837 F.2d 171 (4th Cir. 1988) (Erie permits state-law final injunctions when statute authorizes relief)
- Va. Beach S.P.C.A., Inc. v. S. Hampton Roads Veterinary Ass’n, 229 Va. 349, 329 S.E.2d 10 (1985) (statutory injunctive relief does not require irreparable harm proof)
- Levisa Coal Co. v. Consolidation Coal Co., 276 Va. 44, 662 S.E.2d 44 (2008) (Virginia Supreme Court cites Va. Beach S.P.C.A. and Carbaugh on injunctive relief)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (permanent injunction standard; traditional four-factor test applies in federal disputes)
- Christopher Phelps & Assocs., L.L.C. v. Galloway, 492 F.3d 532 (4th Cir. 2007) (post-eBay discussion; federal statute context regarding injunctions)