A breach of global standards

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A breach of global standards

A U.S. federal court order to ban the manufacturing and sales of synthetic fiber used in bulletproof armor or ultraresistant tires and cables by the country’s Kolon Industries is raising concern about a lack of justice against a foreign competitor to protect an American company. The same jury in Richmond, Virginia, ordered Kolon to pay its U.S. rival DuPont $919.9 million in damages for stealing trade secrets related to the latter’s trademarked synthetic Kevlar. Kolon has been mass-producing a similar ultrastrength para-aramid fiber called Heracron from 2005, which ranks behind DuPont’s product and Japan’s version of Twaron.

A local court barring a foreign enterprise from “manufacturing, using, marketing, selling, distributing and offering sale or soliciting customers for any para-aramid product” for a period of 20 years is clearly an abuse of authority. Richmond serves as the manufacturing base for the plaintiff’s aramid fiber. As such, suspicion has circulated that the local jury and judge reached their verdict in response to the burden of an industrial and economic downturn, not to mention a certain sense of patriotism and trade protectionism.

Judge Robert Payne, who presided over the trial, also formerly served as a lawyer for 21 years at a firm that represented DuPont, meaning he is hardly in a position to deliver an unbiased legal interpretation of the case. Meanwhile, the jury, which consisted of homemakers and other nonprofessionals, was rebuked during the trial for dozing off.

Another nagging point is the question of how DuPont was able to win its case based on the accusation that information concerning its aramid technology was conveyed to Kolon via a former employee, who was hired by the Korean company in 2008, two years after questionable fiber was already being commercialized in conjunction with the Korea Advanced Institute of Science and Technology.

The court accepted DuPont’s petition demanding that Kolon compensate it for stealing 30 years of its research and marketing work. Even considering U.S. courts’ penchant for handing out costly punitive penalties to foreign companies for industrial damages, demanding reparation equivalent to 300 times the value of Kolon’s exports to the U.S. is outrageous.

Kolon plans to appeal, but it should have the backing of the Korean government.

In a related case, 55 percent of the U.S. public, according to a recent poll, disagreed with Apple’s overwhelming victory over Samsung Electronics recently in a patent-infringement lawsuit linked to smartphone technology in a U.S. court. Washington must rein in such reckless rulings that seem bent on eliminating foreign competitors. The government should strongly protest those decisions that breach global standards on fair trade, and consider taking them to the World Trade Organization.

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