Dow-Complaint-Organik.pdf - Law.com

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

THE DOW CHEMICAL COMPANY,

ROHM AND HAAS COMPANY,

ROHM AND HAAS CHEMICALS

LLC

Plaintiffs,

v.

ORGANIK KIMYA HOLDING A.S.,

ORGANIK KIMYA SAN. VE TIC.

A.S., ORGANIK KIMYA US, INC.,

ORGANIK KIMYA LUXEMBURG

S.A. and ORGANIK KIMYA

NETHERLANDS B.V.,

Defendants.

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C.A. No. _________

VERIFIED COMPLAINT

Plaintiffs The Dow Chemical Company, Rohm and Haas Company, Rohm

and Haas Chemicals LLC (collectively, “Dow” or “Plaintiffs”) file this complaint

against Defendants Organik Kimya Holding A.S. (“Organik Kimya Holding”),

Organik Kimya San. ve Tic. A.S. (“Organik Kimya Turkey”), Organik Kimya US,

Inc. (“Organik Kimya U.S.”), Organik Kimya Luxemburg S.A. (“Organik Kimya

Luxemburg”), and Organik Kimya Netherlands B.V. (“Organik Kimya

Netherlands”) (collectively, “Organik Kimya” or “Defendants”).

Plaintiffs originally filed their Complaint in the Superior Court of New

Castle County for the State of Delaware (see N15C-06-252 EMD [CCLD]).

EFiled: Mar 08 2016 08:50PM EST Transaction ID 58690569

Case No. 12090-

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Defendants moved to dismiss various claims of Plaintiffs’ Complaint and

contested, inter alia, whether the Superior Court had jurisdiction over Plaintiffs’

equitable claims (see id. D.I. 8). That motion was fully briefed, but without

resolution from the Superior Court (see id. D.I. 14, 16, 39). Plaintiffs subsequently

filed an election to transfer this case to the Court of Chancery, pursuant to 10 Del.

C. § 1902 (see id. D.I. 44). The Superior Court granted that election. See Exhibit

A. Pursuant to 10 Del. C. § 1902, the filing of this action “shall be deemed to be”

June 24, 2015, when it was first filed in the Superior Court. As in their Superior

Court Complaint, Plaintiffs allege as follows:

NATURE OF THE ACTION

1. Dow alleges claims against Organik Kimya because of the scheme

developed and carried out by Organik Kimya to steal and use Dow’s valuable and

proprietary trade secret technology for manufacturing polymers. Organik Kimya’s

scheme has involved the hiring of Dow employees who had helped develop,

produce and market Dow’s technology, inducing those employees to disclose and

use for Organik Kimya that technology in breach of their obligations of

confidentiality owed to Dow, using Dow’s technology to build plants to

manufacture polymers using Dow’s technology and then selling polymers made

using Dow’s technology in competition with Dow. Dow’s claims include

misappropriation of confidential and proprietary trade secret information,

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conversion, unfair competition, tortious interference with business relations,

tortious interference with contract, and unjust enrichment. Dow seeks money

damages and an injunction against Organik Kimya as relief to redress the alleged

claims.

2. This action follows a prior case brought by Dow at the U.S.

International Trade Commission, Investigation No. 337-TA-883 (“the 883

Investigation”). On May 20, 2013, Dow filed a complaint in the 883 Investigation

alleging that Organik Kimya had infringed four Dow patents related to a Dow

opaque polymer known as ROPAQUE™

Ultra. The Organik Kimya products

accused of infringement were polymers marketed by Organik Kimya under the

trade names OPAC 204x and ORGAWHITE 2000.

3. During the 883 Investigation, Dow discovered an email between two

Organik Kimya employees supporting Dow’s current allegations that Organik

Kimya had unlawfully obtained Dow’s trade secrets from former Rohm and Haas

employees, in particular a former scientist named Dilip Nene whom Organik

Kimya had hired as a consultant. The email stated that, “a file was created within

the Lab concerning all meeting notes and mails on Opac 101, 103, 204x and

seeds,” and the metadata accompanying the email explained that “[a]s a result of

the recent meetings held with Dilip Nene, the information obtained about ‘seed’

and ‘opac polymers’ are summarized as follows.”

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4. In November 2013, Dow amended its Complaint in the 883

Investigation to include allegations that Organik Kimya had misappropriated trade

secrets related to Dow’s ROPAQUE™

Ultra line of products (“Dow’s Opaque

Polymer Trade Secrets”) in the development and commercial marketing of OPAC

204x and ORGAWHITE 2000.

5. During the 883 Investigation, Dow also discovered an email

indicating that Organik Kimya had engaged in a concerted effort to cover up the

evidence of its misappropriation of Dow’s Opaque Polymer Trade Secrets. That

email stated that “[c]onfidential information related to the consultant are still

recorded here, they were supposed to be erased by the IT department.”

6. Dow moved the Administrative Law Judge (“ALJ”) in the 883

Investigation to order the forensic inspection of certain Organik Kimya networks

and computers in an attempt to recover the evidence that the email suggested had

been “erased by the IT department.” The ALJ granted Dow’s request and issued a

series of orders requiring Organik Kimya to turn over various computers and

related devices for forensic inspection, including the laptops of at least three

former Dow employees.

7. Following the ALJ’s orders, Organik Kimya engaged in spoliation of

evidence on an unprecedented scale and then attempted to cover up that spoliation

by making patently false statements that the ALJ explained “should shock the

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conscience of any reasonable person.” Concerning Organik Kimya’s spoliation in

the 883 Investigation, the ALJ also explained:

The evidence shows that Organik Kimya spoliated, or

permitted the spoliation, of massive amounts of evidence

prejudicial to Dow’s allegation of trade secret

misappropriation in this investigation. The evidence

shows that the spoliation of evidence was undertaken

intentionally and in bad faith. The evidence shows

Organik Kimya flouted its obligation to preserve

evidence in this investigation. In fact, there is no

evidence that even a litigation hold memo was issued.

Further, the evidence shows Organik Kimya undertook

great efforts to try and cover up the spoliation, including

running specialized software and repeatedly lying to the

court.

8. As a result of Organik Kimya’s spoliation in the 883 Investigation, the

ALJ granted default judgment against Organik Kimya with respect to Dow’s trade

secret claims and awarded Dow almost $2 million in fees and costs. The ALJ’s

October 17, 2014 Initial Determination is incorporated herein by reference and

attached hereto as Exhibit B.

9. On April 17, 2015, the International Trade Commission (“ITC”)

affirmed the ALJ’s Initial Determination. In addition, the ITC granted Dow’s

requested 25 year exclusion and cease and desist orders. The ITC’s exclusion and

cease and desist orders mean that Organik Kimya is prohibited from importing

opaque polymers into the U.S., or selling imported opaque polymers in the U.S.,

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that Organik Kimya manufactured using Dow’s trade secrets, for a period of 25

years.

10. In granting the 25 year exclusion and cease and desist orders, the ITC

held that Dow had established that it had valid trade secrets and that it would have

taken Organik Kimya at least 22–25 years to develop the technology

independently. The ITC stated:

Dow’s evidence demonstrates that Dow had maintained

the secrecy of its opaque polymers for more than thirty

years, until Organik Kimya’s misappropriation, and that

it would have taken Organik Kimya from 22-25 years,

possibly longer, to independently develop a recipe and

process to manufacture a commercial opaque polymer

comparable to Dow’s. Accordingly, the 25 years sought

by Dow is an appropriate length for the remedial orders

here.

The ITC’s Opinion is incorporated herein by reference and attached hereto as

Exhibit C.

11. In the present action, Dow seeks monetary and worldwide injunctive

relief for Organik Kimya’s misappropriation of Dow’s Opaque Polymer Trade

Secrets that were at issue in the 883 Investigation. In addition, Dow seeks

monetary and worldwide injunctive relief for Organik Kimya’s misappropriation of

Dow’s confidential and proprietary trade secrets related to numerous other polymer

products. As explained in detail below, the forensic inspections conducted during

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the 883 Investigation revealed that not only has Organik Kimya stolen trade secrets

related to opaque polymers, but also numerous other Dow polymer products.

12. On information and belief, Organik Kimya has engaged in a far

reaching scheme to steal Dow’s confidential and proprietary technology related to

numerous polymer products, including both opaque polymers and non-opaque

polymers. Dow has invested substantial time and expense on the research and

development of its polymer technology and employs this technology in the

manufacture of hundreds of polymer products throughout the world.

13. As a result of its improper scheme, Organik Kimya now sells vast

amounts of opaque polymers and other polymer products throughout the world to

the detriment of Dow. By doing so, Organik Kimya has knowingly violated

various state laws in an attempt not only to enrich itself, but to usurp Dow’s

position as market leader in the field of polymers.

THE PARTIES

14. The Dow Chemical Company is a corporation organized and existing

under the laws of the State of Delaware and having its principal place of business

at 2030 Dow Center, Midland, Michigan.

15. Rohm and Haas Company is a corporation organized and existing

under the laws of the State of Delaware and having its principal place of business

at 100 Independence Mall West, Philadelphia, Pennsylvania.

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16. Rohm and Haas Chemicals LLC is a Delaware Limited Liability

Company having its principal place of business at 100 Independence Mall West,

Philadelphia, Pennsylvania.

17. On information and belief, Organik Kimya Holding A.S. (“Organik

Kimya Holding”) is a privately-held Turkish chemical company having its

principal place of business at Barbaros Mah. Tophanelioglu Cad. Kosk Sitesi No:

54 Uskudar, Istanbul, Turkey. On information and belief, Aldo Kaslowski, Simone

Kaslowski and Stefano Kaslowski are Board members of Organik Kimya Holding.

18. On information and belief, Organik Kimya Turkey is a privately-held

Turkish chemical company having its principal place of business at Mimarsinan

Mah. Cendere Yolu No: 146, Kemerburgaz 34075 Eyüpand, Istanbul, Turkey. On

information and belief, Organik Kimya Turkey is a wholly-owned subsidiary of

Organik Kimya Holding. On information and belief, Aldo Kaslowski, Simone

Kaslowski and Stefano Kaslowski are the sole Board members of Organik Kimya

Turkey.

19. On information and belief, Organik Kimya Luxemburg S.A.

(“Organik Kimya Luxemburg”) is a privately-held Luxemburg chemical company

having its principal place of business at 2a, rue Nicolas Bove, L-1253 Luxemburg.

On information and belief, Organik Kimya Luxemburg is a wholly-owned

subsidiary of Organik Kimya Turkey.

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20. On information and belief, Organik Kimya Netherlands is a

Netherlands private limited liability company located at Chemieweg 7, 3197 KC,

Rotterdam – Botlekproduce, Netherlands. On information and belief, Organik

Kimya Netherlands is a wholly-owned subsidiary of Organik Kimya Luxemburg.

21. Organik Kimya U.S. is a corporation organized and existing under the

laws of the State of Delaware and having its principal place of business at 2000

Wheeler Road, Burlington, Massachusetts. On information and belief, Organik

Kimya U.S. is a wholly owned subsidiary of Organik Kimya Turkey. On

information and belief, Simone Kaslowski is the President of Organik Kimya U.S.,

and Simone Kaslowski and Stefano Kaslowski are the sole directors of the

company.

22. On information and belief, Organik Kimya U.S. imports various

polymer products, including both opaque and non-opaque polymers, from Organik

Kimya Turkey and Organik Kimya Netherlands. On information and belief,

Organik Kimya formed Organik Kimya U.S. in 2010 as part of its scheme to

misappropriate Dow’s trade secrets and import and sell polymer products,

including both opaque and non-opaque polymers, in the U.S.

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BACKGROUND

Rohm and Haas and Dow

23. Rohm and Haas was established in Philadelphia in 1909, shortly after

Otto Rohm filed his first patent application for a standardized, sanitary leather

bate. In 1936, Rohm and Haas invented Plexiglas, which won the Army-Navy

Production Award for its contribution to the war effort in 1943. The company

became publicly listed in 1949.

24. In the post-war years, Rohm and Haas began researching and

developing acrylic emulsion chemistry. In 1952, Rohm and Haas began production

of acrylate monomers, the raw materials used in its acrylic business, near Houston.

Today, this plant is the world’s largest manufacturer of methacrylic and acrylic

monomers.

25. In 1953, Rohm and Haas introduced the first water-based acrylic

emulsion for paints, ushering in the era of solvent free paints, and establishing

Rohm and Haas as a premier innovator in paint technology. Today, Rohm and

Haas is recognized as the worldwide leader in the field of acrylic emulsion

chemistry.

26. On April 1, 2009, Dow acquired Rohm and Haas, including its entire

polymer business.

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Opaque Polymer Technology

27. Opaque polymers are a specific type of emulsion polymer used in

paints to cover, or “hide,” the substrate beneath the surface of the paint, such as a

previous color. Titanium dioxide (TiO2) has long been used in paints to increase

hiding. TiO2 is expensive, however, and therefore increases the costs of paint

production for manufacturers.

28. As early as 1979, Rohm and Haas scientists began to develop a

substitute for TiO2 that paint manufacturers could use in their paint formulations to

reduce raw material costs. This development resulted in Rohm and Haas’s market

introduction in 1982 of the first generation of so-called “opaque polymers” under

the trademark ROPAQUE™

.

29. ROPAQUE™

opaque polymers are hollow sphere polymers that

contain a water filled void. During the drying of the paint (in which the

ROPAQUE™

polymers are mixed), the water in the void diffuses through the

polymer shell and leaves an air void that scatters light and facilitates hiding. The

creation upon drying of the air void in opaque polymer particles is illustrated

below.

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30. ROPAQUE™

was the first synthetic material to use trapped air to

enhance opacity in paints. Since its introduction in 1982, Rohm and Haas has

continued to invest in the research and development of opaque polymers. To date,

Rohm and Haas (now Dow) has launched four different generations of

ROPAQUE™

opaque polymers. Each generation has succeeded in increasing the

percent void fraction of the polymer particles, which is one of the important factors

related to the opacifying properties of the resulting products.

31. The first generation ROPAQUE™

polymers had a void fraction of

around 20%. By the mid to late 1990s, however, Rohm and Haas scientists had

discovered a process whereby they could obtain opaque polymer particles of

uniform and ideal size with higher void fractions and dramatically improved

opacifying properties.

32. Based on this new discovery, Rohm and Haas launched the

ROPAQUE™

Ultra line of products in the late 1990s, including Ultra, Ultra E and

Ultra EF. These products have led the industry since their introduction and

continue to lead the industry today.

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33. The ROPAQUE™

Ultra line of products is manufactured through and

with the use of numerous Dow Opaque Polymer Trade Secrets. The Dow Opaque

Polymer Trade Secrets include, at least, (1) highly confidential recipes and

manufacturing instructions for Rohm and Haas’s ROPAQUE™

Ultra line of

products and (2) highly confidential recipes and manufacturing instructions for the

“seed” polymers used as starting materials for Dow’s ROPAQUE™

Ultra line of

products. These recipes and manufacturing instructions typically include highly

confidential parameters such as order of addition of chemicals, temperature, time

and mixing speed, as well as other highly confidential information necessary for

the production of the ROPAQUE™

Ultra line of products and their seeds.

34. The Dow Opaque Polymer Trade Secrets also include various

techniques for improving the efficiency of the processes used to manufacture the

ROPAQUE™

Ultra line of products and their seeds. These techniques typically

include highly confidential information such as the specific equipment that should

be used and processing techniques that can increase productivity.

35. Each of the Dow Opaque Polymer Trade Secrets has provided and

provides Dow with significant competitive advantages over competitors and

would-be competitors. These significant competitive advantages include Dow’s

ability to manufacture superior opaque polymers, such as the ROPAQUE™

Ultra

line of products; to market its superior opaque polymers as unique and

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groundbreaking technology; to attract customers because of its superior opaque

polymers; and to realize appropriate returns on its investments resulting from the

unique appeal of its opaque polymer products.

36. The Dow Opaque Polymer Trade Secrets are not generally known to

others, and are not readily ascertainable by proper means by others, and they derive

independent economic value from not being generally known or ascertainable.

37. Dow has made reasonable efforts to protect the secrecy of its Opaque

Polymer Trade Secrets, including restricting the access to these trade secrets to

employees with a demonstrated need for Dow’s business purposes, and imposing

contractual confidentiality and non-disclosure obligations on those employees who

have access or could gain access to the Dow Opaque Polymer Trade Secrets. In

addition, for certain ingredients used in the manufacture of Dow’s opaque polymer

products, Dow repackages and relabels them with anonymous identifiers before

shipment even to its own manufacturing sites, and only manufactures these key

ingredients in countries with strong misappropriation laws.

38. Rohm and Haas’ confidential and proprietary processes result in

particles of uniform and ideal size with high void fractions for effectively

scattering light. Below is an image of several particles of Rohm and Haas’s

ROPAQUE™

Ultra opaque polymer.

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39. Organik Kimya unlawfully and unfairly obtained numerous Dow

Opaque Polymer Trade Secrets by hiring or otherwise unlawfully obtaining the

trade secrets through one or more former or current Rohm and Haas employees,

including but not limited to Dr. Guillermo Perez, Mr. Leonardo Strozzi and Dr.

Dilip Nene.

40. Dr. Perez was a 13 year employee of Rohm and Haas. At the time of

his departure, Dr. Perez was the Commercial and Technical Manager for Emerging

Markets for Rohm and Haas’s Polymers and Resins business. On information and

belief, Dr. Perez is currently the co-head of Research and Development at Organik

Kimya.

41. Mr. Strozzi was a 26 year employee of Rohm and Haas. From 1977 to

1994, Mr. Strozzi was Production Manager at Rohm and Haas’s manufacturing

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plant in Mozzanica, Italy. From 1994 to 2000, Mr. Strozzi was the Plant Manager

of the Mozzanica plant. From 2000 to 2003, Mr. Strozzi was the Plant Manager of

Rohm and Haas’s manufacturing plant in Robbecchetto, Italy. On information and

belief, in September 2008, Mr. Strozzi began working for Organik Kimya as the

Plant Manager of Organik Kimya’s Rotterdam plant.

42. Dr. Nene was a 27 year employee of Rohm and Haas. Dr. Nene was

the author of the original manufacturing instructions for ROPAQUE™

Ultra. On

information and belief, from 2008 to 2013, Dr. Nene worked for Organik Kimya as

a consultant, performing services for the company from 2008 through 2013.

Emulsion Polymer Technology

43. Emulsion polymerization is a type of free-radical polymerization that

starts with an emulsion of water, monomer and surfactant. Opaque polymers are

one type of emulsion polymer, but there are many others. As a result of its

acquisition of Rohm and Haas, Dow now has a large portfolio of trade secrets

related to non-opaque emulsion polymers (“Dow Emulsion Polymer Trade

Secrets”).1 Rohm and Haas (now Dow) is widely regarded as the worldwide leader

1 Some of the products at issue in this case are prepared using solution

polymerization techniques rather than emulsion polymerization. For ease of reference, all trade secrets related to non-opaque polymers will be referred to in this Complaint as “Emulsion Polymer Trade Secrets.”

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in emulsion technology and has historically made significant investments in

research and development of emulsion polymers.

44. Dow uses its Emulsion Polymer Trade Secrets in the manufacture of

numerous polymer products. Dow’s Emulsion Polymer Trade Secrets include (1)

highly confidential recipes and manufacturing instructions for numerous polymers

and (2) highly confidential recipes and manufacturing instructions for seed

polymers used as starting materials for many polymers. These recipes and

manufacturing instructions typically include highly confidential parameters such as

order of addition of chemicals, temperature, time and mixing speed, as well as

other highly confidential information necessary for the production of Dow’s

polymers.

45. The Dow Emulsion Polymer Trade Secrets also include various

techniques for improving the efficiency of the processes used to manufacture

polymers and their seeds. These techniques typically include highly confidential

information such as the specific equipment that should be used and processing

techniques that can increase productivity.

46. Each of the Dow Emulsion Polymer Trade Secrets has provided and

provides Dow with significant competitive advantages over competitors and

would-be competitors. These significant competitive advantages include Dow’s

ability to manufacture superior polymers; to market its superior polymers; to attract

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customers because of its superior polymers; and to realize appropriate returns on

its investments resulting from the appeal of its polymer products.

47. The Dow Emulsion Polymer Trade Secrets are not generally known to

others, and are not readily ascertainable by proper means by others, and they derive

independent economic value from not being generally known or ascertainable.

48. Dow has made reasonable efforts to protect the secrecy of its

Emulsion Polymer Trade Secrets, including restricting the access to these trade

secrets to employees with a demonstrated need for Dow’s business purposes, and

imposing contractual confidentiality and non-disclosure obligations on those

employees who have access or could gain access to the Dow Emulsion Polymer

Trade Secrets. In addition, for certain ingredients used in the manufacture of

Dow’s products, Dow repackages and relabels them with anonymous identifiers

before shipment even to its own manufacturing sites, and only manufactures these

key ingredients in countries with strong misappropriation laws.

49. On information and belief, Organik Kimya unlawfully and unfairly

obtained numerous Dow Emulsion Polymer Trade Secrets by hiring or otherwise

unlawfully obtaining the trade secrets through one or more former or current Rohm

and Haas employees, including but not limited to Dr. Perez, Mr. Strozzi and Dr.

Nene.

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ORGANIK KIMYA’S SPOLIATION OF EVIDENCE

50. During the 883 Investigation, Organik Kimya engaged in an

unprecedented campaign to destroy evidence of its trade secret misappropriation.

In particular, Organik Kimya destroyed evidence from some of its “key players”

who had highly relevant evidence related to Dow’s claims of misappropriation. In

sum, the ALJ held:

Litigations are fought and won with information. Here

Organik Kimya destroyed vast amounts of information

found prejudicial to Dow’s allegations in this

investigation. The spoliated evidence was from some of

the “key players” one would naturally expect to have

information relevant to Dow’s claims. Thus, Dow’s

inability to access such information has deprived Dow of

its ability to prove its trade secret misappropriation case.

Accordingly, no lesser sanction than Default can make

Dow whole.

51. As explained below, and detailed in the ALJ’s Initial Determination,

Organik Kimya destroyed evidence residing on the computers and storage devices

of at least Dr. Perez, Mr. Strozzi and Dr. Nene, all of whom were former Rohm

and Haas employees, and all of whom were “some of the ‘key players’ one would

naturally expect to have information relevant to Dow’s claims.”

Dr. Perez’s Computer

52. On February 20, 2014, the ALJ ordered the forensic inspection of Dr.

Perez’s computer. Dow and Organik Kimya subsequently scheduled the inspection

for February 27, 2014.

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53. On February 23, 2014, four days before the scheduled forensic

inspection, Organik Kimya overwrote 190 gigabytes of space on Dr. Perez’s laptop

by copying the Program Files folder at least 108 times. By doing so, Organik

Kimya destroyed potentially hundreds of thousands of files. During the overwriting

of the space on Dr. Perez’ laptop, Organik Kimya also manipulated the computer

clock to hide the fact that it was destroying these files only days before the court-

ordered forensic inspection.

54. On February 26, 2014, the day before the court-ordered forensic

inspection, Organik Kimya ran a program called “CCleaner” multiple times to

delete a large percentage of the C drive and all of the D drive on Dr. Perez’s

computer. Organik Kimya’s use of the CCleaner program resulted in the

destruction of over 600,000 files.

55. Although Organik Kimya successfully destroyed the majority of the

documents and files on Dr. Perez’s computer, forensic analysis was able to detect

the names of certain files and folders that had been destroyed. The names of these

files and folders suggest that they were highly relevant to Organik Kimya’s

misappropriation of Dow’s trade secrets. Some of the file paths refer to “OldRH,”

which likely refers to Rohm and Haas documents and files.

56. In addition, the ALJ held that as Director of Research for Organik

Kimya, Dr. Perez would be expected to have access to all of the chemical

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processes developed by or used by Organik Kimya for polymers. The ALJ held

that this would be true whether Organik Kimya developed the process or formula

internally or misappropriated the process or formula from someone else.

57. Thus, in his Initial Determination, the ALJ held that the massive

spoliation of evidence on Dr. Perez’s laptop was conducted in bad faith. The ALJ

further held that “[i]n fact, were there such a thing, [he] would find Organik

Kimya’s egregious behavior to be gross bad faith.” The ALJ further held that

Organik Kimya’s conduct “leaves no doubt that Organik Kimya destroyed

evidence on Perez’s laptop with the intent to impair Dow’s ability to prove its

allegations of trade secret misappropriation.”

Organik Kimya Computer Issued to Mr. Strozzi

58. On March 20, 2014, the ALJ issued a Preservation Order requiring the

copying and preservation by Dow’s forensic experts Stroz Friedberg of the

company laptop issued by Organik Kimya to Mr. Strozzi. The ALJ informed

Organik Kimya that he would be “mortally annoyed if anything was done to

[further] alter, destroy or otherwise mess with the evidence in this case.”

59. Forensic inspection of the Organik Kimya laptop issued to Mr. Strozzi

revealed that on March 21, 2014 – one day after the ALJ instructed Organik Kimya

that he would be “mortally annoyed” if anything else happened to the evidence in

the case – over 2,700 files were deleted from that laptop. In particular, a folder

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named “scale up” was deleted, along with 2,742 user-created files and folders

stored therein. These files and folders were not merely placed in the Recycle Bin,

but rather deleted in a manner that circumvented the Recycle Bin.

60. Forensic inspection of the Organik Kimya laptop issued to Mr. Strozzi

also revealed that at least 20 external storage devices (such as USB drives) had

been connected to the laptop since the beginning of the 883 Investigation in May

2013. After learning of these external storage devices, Dow requested Organik

Kimya to produce them for forensic inspection. Organik Kimya informed Dow that

the devices no longer existed because on March 31, 2014, Mr. Strozzi took his

computer bag, with his Organik Kimya laptop and storage devices, into a bathroom

of a highway rest stop, but “accidentally” left them there. The ALJ subsequently

called this explanation “highly suspect.”

61. Although none of the storage devices were turned over for inspection,

forensic analysis of the Organik Kimya laptop issued to Mr. Strozzi identified

some of the files contained on those storage devices by examining “jump lists”

from the laptop. Jump lists are lists of links or shortcuts to files that were once

accessed on a computer. The jump lists from the Organik Kimya laptop issued to

Mr. Strozzi revealed that at least five of the storage devices plugged into the

computer contained folders named “R&H.” These folders included hundreds of

filepaths with names that appear to be Dow’s highly confidential and proprietary

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documents and information, including highly confidential and proprietary

manufacturing instructions and recipes for opaque polymers and other polymers.

An exemplary portion of the jump list from the Organik Kimya laptop issued to

Mr. Strozzi is attached hereto as Exhibit D.

62. In addition to the Organik Kimya laptop issued to Mr. Strozzi, Dow’s

forensic experts discovered similar jump lists on an Organik Kimya loaner laptop

that was also forensically examined. The jump lists from the Organik Kimya loaner

laptop revealed that the computer had been used to access at least two storage

devices with folders named “R&H,” and that these folders contained numerous

filepaths with names that also appear to be Dow’s highly confidential and

proprietary documents and information, including highly confidential and

proprietary manufacturing instructions and recipes for opaque polymers and other

polymers. An exemplary portion of the jump list from the Organik Kimya loaner

laptop is attached hereto as Exhibit E.

63. In sum, forensic analysis revealed that the Organik Kimya laptop

issued to Mr. Strozzi and the Organik Kimya loaner laptop were used to access at

least seven storage devices containing hundreds of highly confidential documents

belonging to Dow. These documents appear to include highly confidential and

proprietary manufacturing instructions and recipes for hundreds of Dow products,

including opaque polymers and other polymers.

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64. In his Initial Determination, the ALJ held that the spoliation of the

Organik Kimya laptop issued to Mr. Strozzi “evinces an attempt to cover-up wrong

doing.” The ALJ further held that “the only conclusion that can be drawn is that

the spoliation of evidence on the Strozzi laptop and the spoliation of the Strozzi

laptop itself was done in an effort to prevent Dow from access to evidence it might

use to support its allegations [of trade secret misappropriation].”

Dr. Nene’s Computer

65. On September 12, 2013, Dow served Dr. Nene with a subpoena

requesting him to produce all relevant documents and information and to appear

for a deposition. The subpoena specifically requested Dr. Nene to search for,

preserve and produce documents related to his consultation with Organik Kimya.

After receiving his subpoena, Dr. Nene immediately called Organik Kimya’s co-

CEO Mr. Stefano Kaslowski, who agreed that Organik Kimya would provide Dr.

Nene with legal representation.

66. On December 18, 2013, Dow served Dr. Nene with a second

subpoena directing him to produce for inspection hard drives from any personal

computers that Dr. Nene used during the period of his consultation for Organik

Kimya. Dr. Nene moved to quash Dow’s subpoena, and on February 4, 2014, the

ALJ denied Dr. Nene’s motion.

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67. On March 27, 2014, counsel for Dr. Nene delivered Dr. Nene’s

personal laptop and four external storage devices for forensic inspection. Forensic

inspection of the four storage devices revealed that Dr. Nene deleted files after

service of his subpoenas on both September 12, 2013 and December 18, 2013.

68. On May 3, 2014, counsel for Dow deposed Dr. Nene pursuant to his

second subpoena. During his deposition, Dr. Nene testified that in early June 2013,

shortly after Dow filed its complaint against Organik Kimya at the ITC, Mr.

Kaslowski called Dr. Nene directly and directed him to travel to Rotterdam. Dr.

Nene testified that around the time of receiving Mr. Kaslowski’s call, he removed

the hard drive from his personal laptop, took it to his garage, smashed it with a

hammer and threw it in the garbage. Dr. Nene testified that the reason he did this

was to make sure that the information on his hard drive could not be recovered.

During Dr. Nene’s trip to Rotterdam, Organik Kimya gave him a new laptop.

69. On the day Dr. Nene arrived in Rotterdam, Mr. Kaslowski met him in

the lobby of his hotel. At their depositions in the 883 Investigation, both Mr.

Kaslowski and Dr. Nene denied having this meeting, but forensic analysis of Dr.

Nene’s computer revealed an email fragment indicating that Mr. Kaslowski had in

fact conducted a secret meeting with Dr. Nene. In his Initial Determination, the

ALJ held that both men lied about this meeting during their depositions.

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70. Forensic analysis of Dr. Nene’s personal laptop also revealed that Dr.

Nene created a folder named “NewAll Folder” on September 10, 2013. The ALJ

found that the evidence strongly suggests that this folder was a backup of the old

hard drive that Dr. Nene smashed with a hammer around the time of receiving the

call from Organik Kimya’s co-CEO Mr. Kaslowski. The forensic evidence also

showed that Dr. Nene deleted most of the data within the “NewAll Folder” on

December 20, 2013, only two days after receiving his second subpoena.

71. In his Initial Determination, the ALJ held that there was sufficient

evidence to sustain a finding that Organik Kimya had the ability to control Dr.

Nene and failed to act in a responsible manner to preserve the evidence on his

computers and storage devices.

ORGANIK KIMYA’S MISAPPROPRIATION OF

DOW’S OPAQUE POLYMER TRADE SECRETS

72. On information and belief, Organik Kimya illegally acquired one or

more of the Dow Opaque Polymer Trade Secrets and illegally used those trade

secrets to manufacture its own opaque polymer products, including but not limited

to OPAC 204x and/or ORGAWHITE 2000 to the detriment of Dow. On

information and belief, Organik Kimya manufactures OPAC 204x and

ORGAWHITE 2000 at its plants in Istanbul, Turkey and/or Rotterdam,

Netherlands.

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73. As explained above, as a result of Organik Kimya’s unprecedented

destruction of evidence in the 883 Investigation, the ALJ ordered the sanction of

default judgment against Organik Kimya with respect to Dow’s trade secret claims

related to opaque polymers. The ALJ’s default judgment, the ITC’s affirmance and

the ITC’s remedial orders in the 883 Investigation are res judicata with respect to

Dow’s present claims that Organik Kimya misappropriated Dow’s Opaque

Polymer Trade Secrets.

74. The ALJ’s default judgment, the ITC’s affirmance and the ITC’s

remedial orders in the 883 Investigation also operate as collateral estoppel with

respect to all issues related to Dow’s present claims that Organik Kimya

misappropriated Dow’s Opaque Polymer Trade Secrets. Organik Kimya is

estopped from contesting any and all issues related to Dow’s claims of

misappropriation, including but not limited to that Dow is the owner of valid trade

secrets (that Dow derives economic value from its confidential and proprietary

technology not being known to the public and that Dow’s confidential and

proprietary technology is the subject of reasonable efforts to maintain its secrecy),

that Organik Kimya illegally acquired Dow’s trade secrets, that Organik Kimya

used Dow’s trade secrets to the detriment of Dow and that it would have taken

Organik Kimya at least 25 years to independently develop Dow’s trade secrets.

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75. In addition to the ALJ’s finding of default judgment, Dow has tested

two lots of OPAC 204x. On information and belief, Organik Kimya’s opaque

polymers exhibit characteristics that are very similar to Rohm and Haas’

ROPAQUE™

Ultra products. As shown in the micrograph below taken using

Transmission Electron Microscopy, Organik Kimya’s opaque polymers are

identical in particle size and uniformity to that of ROPAQUE™

Ultra. Dow is not

aware of any process capable of producing opaque polymers of this caliber without

using one or more of Dow’s Opaque Polymer Trade Secrets.

76. In addition, during the 883 Investigation, Dow discovered an email

between two Organik Kimya employees stating that “a file was created within the

Lab concerning all meeting notes and mails on Opac 101, 103, 204x and seeds.”

The metadata accompanying this email explained that “[a]s a result of the recent

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meetings held with Dilip Nene, the information obtained about ‘seed’ and ‘opac

polymers’ are summarized as follows.”

77. Further, in a 2009 email from a distributor to Organik Kimya, the

distributor asks that the email be forwarded to “Dr. X from R&H.” During the 883

Investigation, Dow alleged and the ALJ held that “Dr. X” was likely a reference to

Dr. Nene.

78. Likewise, in a 2010 email between two Organik Kimya employees,

the author explains that “[t]he guy provided free monomer ratios for R&H

production runs.” During the 883 Investigation, Dow alleged that the “guy” was

also a reference to Dr. Nene.

79. Further, the forensic inspection of the Organik Kimya laptop issued to

Mr. Strozzi revealed a scale-up report for an Organik Kimya product known as

OPAC 103. The scale-up report stated that “this was advised by Dilip Nene and

Leo Strozzi.” It also explained that “[a] trial production with the original but

improved recipe shall be performed under supervision of Dilip Nene, during the

week of March 9.”

80. In addition, as explained above, the forensic inspection of the Organik

Kimya laptop issued to Mr. Strozzi and an Organik Kimya loaner laptop revealed

jump lists showing that those computers were used to access at least seven storage

devices containing numerous highly confidential documents belonging to Dow.

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These documents appear to include highly confidential and proprietary

manufacturing instructions for Dow’s opaque polymers, including its ROPAQUE™

Ultra line of products.

81. In addition to the documents and jump lists discussed above, Organik

Kimya was required to disclose the recipes and manufacturing instructions for its

OPAC 204x and ORGAWHITE 2000 during the ITC case. A comparison of

Organik Kimya’s recipes and instructions to Dow’s recipes and instructions

showed that Organik Kimya misappropriated Dow’s trade secrets.2

ORGANIK KIMYA’S MISAPPROPRIATION OF

DOW’S EMULSION POLYMER TRADE SECRETS

82. On information and belief, Organik Kimya illegally acquired the Dow

Emulsion Polymer Trade Secrets and illegally used those trade secrets to

manufacture its own products to the detriment of Dow. On information and belief,

Organik Kimya manufactures one or more of these products at its plants in

Istanbul, Turkey and/or Rotterdam, Netherlands.

83. For example, during the course of the forensic inspection of the

Organik Kimya laptop issued to Mr. Strozzi described above, Dow’s forensic

2 Organik Kimya has designated its recipes and manufacturing instructions, as

well as other documents proving its misappropriation, Confidential Business Information subject to the Protective Order entered in the 883 Investigation by the ALJ. For that reason, Dow is not permitted to present that evidence in this Complaint. At the appropriate time, Dow will seek a protective order in this action and expects to obtain through discovery the same evidence produced by Organik Kimya in the 883 Investigation.

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experts Stroz Friedberg recovered a copy of a Rohm and Haas Standard Operating

Procedure for a polymer marketed by Dow as “PRIMAL™

LC-68.” This document

includes detailed trade secret information relating to the specific recipe, raw

materials, manufacturing instructions, operations and equipment used to

manufacture PRIMAL™ LC-68 at Rohm and Haas’s Mozzanica plant.

84. As another example, during the forensic inspection of Dr. Nene’s

computer described above, Dow discovered an email exchange between Dr. Nene

and Mr. Strozzi dated April 2013, in which Mr. Strozzi asked Dr. Nene to

misappropriate further Dow trade secrets related to a Dow product known as

“RHOPLEX™

Multilobe™

.” In the email, Mr. Strozzi referred to highly

confidential and proprietary product codes for RHOPLEX™

Multilobe™

. The only

way that Mr. Strozzi could have known Dow’s confidential codes is if he had

access to the proprietary recipe.

85. In addition, as explained above, the forensic inspection of the Organik

Kimya laptop issued to Mr. Strozzi and an Organik Kimya loaner laptop revealed

jump lists showing that those computers were used to access at least seven storage

devices containing numerous highly confidential and proprietary documents

belonging to Dow. The Organik Kimya computers were used to repeatedly access

Dow documents that appear to be highly confidential and proprietary

manufacturing instructions and recipes for hundreds of Dow products.

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THE CONSEQUENCES OF ORGANIK KIMYA’S SCHEME

86. The malicious scheme of Organik Kimya has caused and, if allowed

to continue will cause, serious and substantial economic and non-economic injury

to Dow. Organik Kimya’s scheme has undermined and jeopardized Dow’s

worldwide opaque, emulsion and solution polymer business, as well as the benefits

to Dow of its acquisition of Rohm and Haas and the innovative technology that

came with that acquisition. Dow’s injuries from this scheme include injury

compensable by money damages, as well as irreparable injury that cannot

adequately be compensated by money damages. Dow’s injuries include, at least,

lost sales, lost customers, lost business opportunities, loss of competitive business

advantage, loss of good will, misuse of its trade secret and proprietary information

and the threat of continued damage to its business.

87. Solely by stealing Dow’s propriety information, Organik Kimya has

been able to enter the opaque, emulsion and solution polymers market and compete

with Dow. As shown, for example, by Organik Kimya’s willingness to engage in

“egregious” and “gross bad faith” destruction of evidence, only the severest of

monetary damages and sanctions from this Court, and the award of the fullest

judicial relief available from this Court against Organik Kimya, will possibly

compensate and protect Dow’s opaque, emulsion and solution polymer business

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and deter Organik Kimya from continued and further stealing and misuse of Dow’s

proprietary information.

COUNT I

Misappropriation of Trade Secrets

88. Dow realleges and incorporates by reference herein the foregoing

allegations of this Complaint.

89. Plaintiffs have legal and proprietary interests in, and rightful

knowledge and access to, the Opaque and Emulsion Polymer Trade Secrets and

proprietary information.

90. Dow’s highly valuable Opaque and Emulsion Polymer Trade Secrets

constitute trade secrets and proprietary information. Dow has taken reasonable

precautions to protect and maintain the value and secrecy of these trade secrets and

information.

91. Dow’s Opaque and Emulsion Polymer Trade Secrets derive

independent economic value, actual and potential, from not being generally known

to or readily ascertainable by others.

92. In violation of the Delaware Uniform Trade Secrets Act, 6 Del. C. §

2001 et seq., Organik Kimya has misappropriated Dow’s Opaque and Emulsion

Polymer Trade Secrets. Specifically, Organik Kimya has used the Dow Opaque

and Emulsion Polymer Trade Secrets and proprietary information to develop and

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manufacture products that directly compete with Dow, including but not limited to

OPAC 204x, ORGAWHITE 2000 and numerous other products (“the Accused

Products”).

93. Organik Kimya markets, sells, and distributes the Accused Products

worldwide, including in the United States.

94. Organik Kimya knew or should have known that its acquisition of

Dow’s Opaque and Emulsion Polymer Trade Secrets was illegal, and its

misappropriation of those trade secrets has been willful and malicious.

95. Dow has suffered and will continue to suffer injury as alleged above

as a result of Organik Kimya’s willful conduct. And Organik Kimya has

improperly benefitted and, without judicial action, will continue to benefit

improperly from that conduct.

COUNT II

Conversion



97. Dow owns confidential and proprietary information and is legally

entitled to possession of that information and to the exclusive enjoyment of the

benefits derived from its use.

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98. Organik Kimya took possession of Dow’s confidential and proprietary

information and failed to return it to Dow after wrongfully acquiring that

information from one or more Dow former and/or current employees. Organik

Kimya converted that confidential and proprietary information for its own use and

benefit and to enter the markets for opaque polymers and numerous other non-

opaque polymers to compete directly with Dow.



improperly benefitted and will, without judicial action, continue to benefit


COUNT III

Unfair Competition



101. Dow is the market leader in opaque polymers and numerous other

non-opaque polymers.

102. Since Organik Kimya’s wrongful conduct, Dow has lost sales of its

opaque polymers and numerous other non-opaque polymers because Organik

Kimya is able to sell its wrongfully produced products at a significant discount.

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COUNT IV

Tortious Interference with a Prospective Business Opportunity



105. Dow’s customers for its opaque polymers and other non-opaque

polymers consistently purchase Dow products.

106. Organik Kimya hired Dow employees for the sole purpose of selling

Organik Kimya’s products – manufactured using the Dow Trade Secrets – to

Dow’s customers.

107. Dow has accordingly lost sales to its customers and business

opportunities because of, and as a proximate result of, Organik Kimya’s unlawful

manufacture and sale of its opaque and other non-opaque polymers.





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COUNT V

Tortious Interference With Contract



110. Valid contracts existed between Dow and its former employees.

111. Organik Kimya knew of the contracts between Dow and its former

employees.

112. Organik Kimya’s intentional and improper acts, described above,

were a significant factor in causing Dow’s former employees to breach the

contracts.

113. There was no privilege or justification for the conduct of Organik

Kimya in causing Dow’s former employees to breach the contracts.





Count VI

Unjust Enrichment



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116. Organik Kimya engaged in an unlawful practice of misappropriating

the Dow Trade Secrets, shortly after Dow acquired Rohm and Haas.

117. Organik Kimya’s unlawful deeds have resulted in Organik Kimya’s

entry into the markets for opaque polymers and numerous other polymers and have

caused losses, financial and intangible, to Dow, as well as denying Dow the benefit

of its bargain with respect to its purchase of Rohm and Haas, as its intellectual

property has been misappropriated.

118. Organik Kimya’s misconduct has unjustly enriched it in an amount

that is not presently known, but will be established at trial.

119. Because Organik Kimya should never have received those sums, it

would be inequitable for Organik Kimya to retain them.





PRAYER FOR RELIEF

Wherefore, Plaintiffs hereby requests that this Court enter a judgment in its

favor and:

A. Declare that Organik Kimya has misappropriated the Dow trade

Secrets; converted Dow’s property; unfairly competed with Dow; interfered with

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Dow’s prospective business relationships; interfered with Dow’s contractual

relations; and was unjustly enriched by all of the foregoing;

B. Order that Organik Kimya pay to Dow all damages sustained by Dow

arising from the foregoing acts of misappropriation of trade secrets, conversion,

unfair competition, tortious interference of business opportunities, and tortious

interference with contracts;

C. Order that Organik Kimya account to Dow for all gains, profits,

savings, and advantages unjustly obtained by Organik Kimya as a result of its

wrongful acts;

D. Order that Organik Kimya account to Dow for a reasonable royalty

for its misappropriation of trade secrets;

E. Award exemplary damages as authorized by the Delaware Uniform

Trade Secrets Act for the willful and malicious misappropriation of The Dow

Trade Secrets;

F. Immediately and permanently enjoin Organik Kimya and all other

acting in concert or participation with them from (1) using and/or disclosing the

Dow Trade Secrets; (2) using and/or disclosing Dow’s confidential and proprietary

information; and (3) soliciting Dow’s customers;

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G. Order that Organik Kimya provide an accounting to Dow of any and

all Dow Trade Secrets and other confidential and proprietary information that has

been used or disclosed to any person or entity;

H. Immediately and mandatorily enjoin Organik Kimya requiring it to

return all of its wrongfully acquired Dow Trade Secrets and other confidential and

proprietary information;

I. Order that Organik Kimya return all Dow Trade Secrets and other

confidential and propriety information in its possession, custody or control and

make available all web-based e-mail accounts, hard drives, storage media, and

personal electronic devices on which such information resides to a third-party firm

to perform a forensic examination of such e-mail accounts, hard drives, storage

media, and devices, as well as to supervise the deletion of any Dow Trade Secrets

and other confidential and propriety information found on such e-mail accounts,

hard drives, storage media, and devices;

J. Award all of the costs and attorneys’ fees it has incurred in connection

with this action; and

K. Award such other and further relief as this Court deems is just and

proper.

Dow-Complaint-Organik.pdf - Law.com

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