The answer to this question may depend on a Section 337 case recently filed at the International Trade Commission. Normally, section 337 cases are filed to halt imports of goods that violate U.S. patents, copyrights, or trademarks. However, the remedy is not formally limited to traditional intellectual property violations, as this case shows.
Valbruna Slater Stainless, Inc. filed a section 337 trade case on September 5, 2014 against several foreign producers of stainless steel. Valbruna alleges that Viraj Profiles Limited, Flanschenwerk Bebitz GmbH, Bebitz Flanges Works Pvt. Ltd., and Ta Chen Stainless Steel Pipe Co., Ltd., three affiliated steel producers located in India, Germany, and Taiwan, misappropriated its trade secrets. In particular, Valbruna claims that Viraj paid a former, relatively low-level Valbruna employee significant amounts of money in exchange for customer lists, pricing data, and documents which detailed Valbruna’s Operating Procedures (OP) for the production of stainless steel.
The OPs are claimed to contain very detailed processing information relating to the exact chemical formulation of Valbruna’s stainless steel by the addition of virgin ferro alloys and the use of industrial gases. Valbruna asserts that the information was developed over 16 years and cost several million Euro. The employee’s actions also allegedly violated a confidentiality agreement he had signed with Valbruna.
In exchange for this information, Valbruna claims that Viraj paid the former employee, a health and safety operator who earned 38,000 Euro per year working at Valbruna, a fee of 100,000 Euro, as well as offering him an annual salary of 120,000 Euro, plus a one-time payment of 80,000 Euro for lost social security due to his departure from Valbruna.
Valbruna argues that Viraj, Bebitz, and Ta Chen are importing and selling stainless steel in the United States produced using Valbruna’s trade secrets, thereby substantially and irreparably injures the U.S. domestic stainless steel industry. As a remedy, Valbruna is requesting that the ITC issue a cease and desist order blocking all future imports.
This case will be closely watched by the U.S. steel industry, but its implications could be far reaching, affecting any company whose former employees have sold trade secrets to a competitor. If the facts of this case remind you of a former employee, you just might have a potential section 337 trade remedy case at the ITC.