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Lawyers for Air Products & Chemicals in Allentown, Pa., have won an injunction in U.S. District Court against a Chinese company that prohibits it from using trade secrets and customer lists allegedly taken by a former Air Products employee. In his 28-page opinion in Air Products & Chemicals v. Inter-Chemical Ltd., U.S. District Judge Legrome D. Davis preliminarily enjoined Inter-Chemical from marketing a new product it allegedly developed by using the trade secrets. The ruling is a victory for attorney Lewis R. Olshin of Duane Morris who argued at the injunction hearing that former Air Products employee Karandeep Singh Sandhu had gained access to highly guarded secrets relating to the process used to manufacture one of its most popular products — a “surfactant” marketed under the brand name Surfynol 104. Surfactants are used in the manufacture of water-based coatings, inks and adhesives. Since such products have higher-surface tension than solvent-based formulations, a surfactant is needed to lower the surface tension, making the water act like a solvent. Surfynol 104 is a unique surfactant, according to Air Products, because its use does not result in any foaming and therefore does not require the addition of a “defoamer,” and it also reduces surface tension under the high-speed conditions, such as spraying, roll coating and printing. Davis found that Sandhu violated an agreement to protect Air Products’ trade secrets when he formed his own company and began seeking partners to market a product that would compete with Surfynol 104. According to court papers, Sandhu, who holds a degree in chemical engineering, was employed by Air Products for five months as a marketing manager. In April 2002, Davis found that Sandhu quit his job, telling Air Products that he was leaving because his wife had been unable to find work. But Davis found that prior to quitting, Sandhu had “embarked on a campaign to gather confidential information and documents regarding Surfynol 104′s manufacturing process, which he intended to use for his personal benefit.” Although the ingredients in Surfynol 104 are discoverable, Davis found that its manufacturing process “is highly confidential” and that Air Products has always kept secret details such as the temperature and pressure at which the product is manufactured; the methods of purification; the ratio of reactants used in the manufacturing process; and the order and placement of various equipment used. Davis found that, prior to quitting, Sandhu had quizzed Air Products’ employees about the manufacturing process. When he left, Davis found, Sandhu had “detailed notes” about the process as well as customer lists that he had promised never to disclose. Within two months of leaving, Davis found that Sandhu formed Value Additives, a California company he intended to use to obtain a source from India or the Far East to manufacture specialty chemicals identical to those produced by Air Products. Prior to leaving Air Products, Davis found, Sandhu had told some Air Products employees that he believed Surfynol 104 was a “profitable business,” that it would be easy for a “new company” to enter the market, especially with “contacts” in “India and China,” that he had such contacts, and that a least one of Air Products’ customers would “be easy to get.” By the summer of 2002, Davis found, Sandhu was communicating with Inter-Chemical of Shen-zhen, China and that a plan was soon hatched to have Sandhu’s college classmate, Navjot Sidhu, form a company in Michigan known as Inter-Chemical USA. In early 2003, Davis found, customers and distributors began notifying Air Products that Inter-Chemical was contacting them and offering for sale a product called “Geminol,” which it promised could be used to replace Surfynol 104. Davis found that some Air Products’ customers forwarded e-mail solicitations they received from Inter-Chemical USA. In the e-mails, Davis found that Sandhu used aliases and promised to supply Geminol for 15 percent less than the cost of Surfynol 104. In the solicitations, Davis found that Inter-Chemical USA referred to Geminol as “exactly the same,” “identical to” or “an exact drop-in for” Surfynol 104. In an injunction issued in June, Davis barred Sandhu and Inter-Chemical USA from any continued use of the trade secrets or customer lists. But Air Products returned to court this fall, complaining that the Chinese parent company, Inter-Chemical Ltd., was continuing to market Geminol and was insisting that it was not covered by the injunction. As proof, Air Products pointed to an e-mail sent in August 2003 to an Air Products customer that said: “only Inter-Chemical USA LLC has an injunction” and “Inter-Chemical Ltd. has no … legal problem for manufacturing and selling [Geminol] anywhere in the world.” The e-mail went on to say: “our competitor has told most of the USA and European customers that Inter-Chemical’s Geminol should not be trusted because they have an injunction against them. Don’t do any business with them. They are telling you lies!!!” Davis found that the Chinese parent company also sent e-mails to Air Products’ customers, publicizing that it would be displaying the Geminol line of surfactant chemicals at the International Coatings Expo in Philadelphia from Nov. 12-14, 2003. The evidence, Davis said, proved that Inter-Chemical Ltd. was also misappropriating Air Products’ trade secrets. “Defendants have exploited Sandhu’s knowledge of Air Products’ customers and its trade secrets and confidential information,” Davis wrote. “Despite being notified by Air Products’ counsel on several occasions that the [June] order is applicable and binding upon them because they are acting in concert and participation with Sandhu and Inter-Chemical USA, defendants continue to use allegedly misappropriated trade secrets in their aggressive pursuit of Air Products’ customers.”

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