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Purolite Files Suit Alleging Trade Secret Misappropriation by Hitachi

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  • Posted on: Oct 17 2016

What is behind the lawsuit accusing Hitachi of Stealing Trade Secrets from Purolite?

At the end of August, Purolite, an American water treatment company based in Pennsylvania, filed a lawsuit against the American branch of Japanese conglomerate Hitachi. According to Purolite, Hitachi violated the stipulations of a business agreement by sharing Purolite’s confidential trade secrets concerning the decontamination of water, including water contaminated by radioactive waste. Purolite accuses Hitachi of sharing Purolite’s trade secrets with other companies in expectation of securing a major contract and cutting Purolite out of the deal. The lawsuit was filed in U.S. District Court for the Southern District of New York.

The case revolves around technological methods Purolite developed for repair of the damage caused by the disaster at Japan’s Fukushima Daiichi Nuclear Power Plant in 2011. The catastrophic damage resulted from the combined forces of an earthquake and subsequent tsunami that shut down the facility’s cooling system. Tragically, the plant still continues to contaminate not only the water used to cool its nuclear reactors, but the groundwater as well.

What makes the Fukushima site unique?

Several factors differentiate the Fukushima site from other nuclear power plants. These include:

  • the large amount of saltwater at Fukushima;
  • the presence of a much higher number of atoms with excess nuclear energy (radionuclides); and
  • the tremendous amount of water requiring radioactive waste removal (the largest in history).

All of these factors complicate the cleanup process and all were taken into consideration when Purolite began work on developing a core technology. The water decontamination system Purolite created makes use of ion-exchange resins formed into tiny beads that are capable of trapping radioactive ions for removal. What makes the system developed by Purolite all the more effective is that it enables the removal of radionuclides to a non-detectible level without a desalination process.

Purolite’s Case of Trade Secret Misappropriation

A confidential business agreement signed in 2011 by Purolite and Hitachi-GE Nuclear Energy (“HGNE”) was designed as a collaboration in which Purolite would provide water treatment expertise to HGNE, whose expertise is in the operation of power plants, in order for the team to obtain contract work at Fukushima. According the agreement, HGNE was prohibited from sharing trade secrets for a period of 10 years.

When their joint proposal was submitted to TEPCO, the Japanese electric company poised to complete the cleanup of Fukushima, however, the bid was rejected. Purolite alleges that HGNE, having violated the business agreement, began working with other companies to develop less costly water treatment processed based on Purolite’s technologies and to outbid their “partners.”

Purolite further alleges that HGNE had already breached the agreement, even before the bid was filed, by disclosing trade secrets to competitors, including Avantech, a water treatment firm located in South Carolina. The lawsuit lists eight counts of allegations against Hitachi, Avantech and other defendants and seeks damages of at least one billion dollars.

One count included in Purolite’s complaint has been made under the terms of the recently passed Defend Trade Secrets Act of May 2016. This act amended the federal criminal code, enabling owners of trade secrets to file civil action in U.S. district courts to seek injunctive relief, compensatory damages and attorney’s fees in cases of trade secret misappropriation.

If your company is involved in a dispute involving misappropriation of trade secrets, it is crucial that you have the support of a skilled business attorney  to protect your firm’s reputation and its bottom line.

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