After six years of an intellectual property battle over technical engineering documents, the federal jury in the U.S. District Court in Connecticut awarded MacDermid Printing Solutions $35.4 million in compensation for being the victim of a breach of contract, violations of federal anti-trust laws and unfair restraint of trade.
 
This verdict resolves a dispute that began with a lawsuit MacDermid filed in October 2008 accusing Cortron of violating state and federal laws pertaining to breach of contract and misappropriation of trade secrets. The beginning stages of this ongoing conflict came as a result of a business move that took place nearly a decade ago.
 
In 2005, the Waterbury, Conn.-based MacDermid announced during a tradeshow that they would begin to sell a unique type of flexographic printing plate fashioned through a thermal heating process. With this, they joined the same market as the Wilmington, Del.-based E. I. du Pont de Nemours and Company (DuPont). Prior to this, DuPont dominated the marketplace as the only company using the thermal heating technology.
 
In order to develop their product, MacDermid began doing business with Minneapolis, Minn.-USA-based Cortron Corporation, a press/print equipment manufacturer that had been developing the machines used to process the plates with thermal heating. Under the terms of their agreement, Cortron began supplying LAVA thermal flexographic printing plate processors to MacDermid. MacDermid marketed and sold the machines under the LAVA trade name.
 
Upset that another company had entered into their niche market, DuPont retaliated with a series of lawsuits – the first came against MacDermid in 2006, followed by a second against Cortron in 2008.
 
The first lawsuit filed about a year after MacDermid entered the thermally heated flexographic plate market, saw DuPont filing a patent claim in New Jersey asking a judge to stop MacDermid from selling the thermally heated equipment.
 
This patent claim directed at MacDermid, accused the company of patent infringement regarding the unique flexographic plates. DuPont claimed that MacDermid had sought out a license from DuPont to sell the plates and stated they declined the approval for MacDermid to do so, but that the Connecticut-based company continued to have the plates developed in spite of their disapproval. This claim was not successful, which eventually led the disgruntled company to take matters into their own hands.
 
A couple years later, DuPont scheduled a meeting with MacDermid’s business partner, Cortron. DuPont executives presented a proposal that would potentially lead to millions of dollars’ worth of business for Cortron if they were to become partners with DuPont, according to a press release from law.com.
 
Following that business meeting, another meeting was scheduled. During this session, lawyers representing the Delaware-based DuPont told Cortron officials that DuPont would be suing them for direct patent infringement. DuPont maintained that the technology Cortron was supplying MacDermid with infringed on its patent for thermally heated flexographic plates.
 
According to the press release from law.com, DuPont told Cortron they would drop the lawsuit as long as the company agreed to negotiate a partnership as outlined in the presentation given previously. Cortron submitted to DuPont’s authoritative approach, agreeing to DuPont’s settlement terms to avoid any conflict involving a lawsuit.
 
As part of the settlement, DuPont required that Cortron must handover any and all documents pertaining to MacDermid’s thermal heat processing technology as well as their customer information relating to it. Lawyers say that DuPont then forced Cortron from doing any more business with MacDermid without their approval. This agreement effectively ceased all collaborations between MacDermid and Cortron.
 
In a joint press release, Cortron and DuPont announced that Cortron had entered into an agreement with DuPont to halt all production of the technology Cortron had developed with MacDermid. Cortron also agreed to stop serving any of the equipment parts used in the production of the plates, according to the court filings.
 
As a result, all service, spare parts and technical support for LAVA technology used to process flexographic printing plates stopped. Cortron completely closed company operations in 2008.
 
Lawyers explained that MacDermid’s credibility was significantly damaged after the agreement between Cortron and DuPont was made public.
 
“Before this, customers were buying MacDermid’s machine,” said John Horvack Jr., an attorney representing MacDermid. “People no longer wanted to buy the machine.”
 
Meanwhile, DuPont had completely deleted all of the technical engineering information regarding the processors, belonging to MacDermid.
 
MacDermid publically announced that they were not out of the market and they would seek out an alternative supplier. However, the lawyers representing MacDermid explained that the company had no way of reproducing the equipment with another supplier because the engineering information Cortron gave to DuPont had been destroyed.
 
“The engineering upgrade for the machine sold in 2008 was entirely in the possession of Cortron,” said Horvack. “So when they deleted it from the computer system, MacDermid had no way to get the upgraded new designs for the upgraded machine they were selling.”
 
MacDermid argued that DuPont, who already controlled over 90% of the niche market, rendered even more market share after Cortron gave them the engineering documents.
 
In defense, MacDermid filed a lawsuit against Cortron, accusing the company of stopped production of the LAVA technology, which violated their joint agreement, and failing to assign MacDermid’s patents that arose from the agreement, even though Cortron had agreed to do so. MacDermid ended up suing Cortron for breach of contract, misappropriation of trade secrets, computer crime, and state and federal antitrust violations.
 
Later, Cortron filed a countersuit against MacDermid for breach of contract, fraud, and negligent misrepresentation. The jury ultimately denied such counterclaims, ruling in favor of the plaintiffs and awarded them $35.4 million.
 
DuPont agreed to indemnify Cortron, who had gone out of business, paying for all the litigation expenses.