[ire]

Since we're all a bunch of carbon geeks

http://www.velonews.com/article/74786/carbon-wars-lew-sues-edge-over-secret-process

A Nevada court has delayed ruling on a request by the owners of Lew Racing to bar competitor Edge Composites from displaying or selling products that Lew alleges were made using a “secret process” it developed.

Paul Lew and Lee Vaccaro, the owners of Lew Racing, filed suit in Clark County, Nevada, seeking damages and a permanent injunction to keep Edge, owned by former Lew employee Jason Schiers, from producing carbon fiber products using Lew’s so-called “secret process,” which Lew says he developed and protected with non-disclosure agreements.

Another hearing is scheduled for April 28th.

Schiers, who was employed by Paul Lew for two years ending 2002, denied that he “or anyone at Edge” is manufacturing carbon fiber products using a secret process developed by his old employer.

“Nothing that we did at Lew, while I was there, represented a significant departure from standard industry practices,” Schiers told VeloNews. “I don’t know if he’s developed some super-secret process since I left — and I wouldn’t put it past him, since he’s a bright guy — but nothing I saw at Lew before 2002 was anything you couldn’t have seen in any other company in this business.”

Lew attorney Jeffrey Whitehead said he’s uncertain how Schiers “could have developed such an understanding of the industry, since he had never worked anywhere in the business before he came to Lew.”
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Lew claims that he worked to develop an innovative approach to carbon manufacturing, both at his old company, Lew Composites and its successor, Lew Racing.

“At all times pertinent to this litigation, both Lew Composites, Inc. and Lew Racing, Inc. took extraordinary measures to keep the secret process secret,” the complaint asserts. “For example, all workers and visitors exposed to the secret process were required to sign non-disclosure agreements. The secret process was only performed in locked and a windowless work space. Certain formulas and descriptions of processes involved in the secret process were kept in a locked vault.”

The complaint repeatedly refers to “the secret process,” which was protected by non-disclosure agreements that Schiers and other employees signed.

None of the processes were patented and Schiers said that’s because they “were not patentable.”

But Whitehead said that trade secrets are still legally protected, with or without a patent.

“The formula for Coca-Cola, for example, has never been patented, but it is protected,” Whitehead said.

Whitehead said that Schiers left Lew in 2002 “with important trade secrets” and went on to form Edge Composites. Lew’s complaint alleges that he has since “taught, disseminated, disclosed, transferred and communicated the secret process to Edge Composites, LLC and its employees.”

In addition to an injunction, Lew and Vaccaro, Lew’s largest investor, are seeking both actual and punitive damages from Schiers, alleging that he breached his non-disclosure agreement, violated his fiduciary duties to his former employer and “unjustly” profited from those acts by producing and selling a product that directly competes with Lew Racing.

Lew, an engineering graduate of the U.S. Naval Academy, also alleges that the process has been used by his other company, Lew Aeronautics, and could be applied to “low observable” or “stealth” technologies and the dissemination of the information could pose “a grave and severe threat” to U.S. security.

“We weren’t aware, until we read that part of the complaint that we were engaged in that sort of activity,” Schiers said.

Whitehead said that he was “not at liberty to disclose” the security related issues in the case, but suggested that defense officials familiar with the matter “may come forward at the appropriate time” to outline the potential security risks associated with the release of information about Lew’s processes.

Schiers said the allegations in the complaint are “completely without merit and we will continue to defend ourselves against each of the allegations.”

“At best,” Schiers said, “the carbon industry, at least as it relates to bikes, is 25 years old at best. I left Lew in 2002, which means that about a fourth of the industry’s entire existence has since passed by. What was cutting edge in 2002 is long out-dated and, like I said, even then what they were doing was not that unusual.”

Whitehead said the court on Wednesday delayed acting on his request for a temporary restraining order until an evidentiary hearing scheduled for April 28.

 

[LordOpie]

So Lew didn't file any patents or such?

 

[-dustin]

I read the Edge article in BRAIN yesterday, and was kind of intrigued by the way things went down between Lew and Edge. Interesting article.

 

[ire]

I read the Edge article in BRAIN yesterday, and was kind of intrigued by the way things went down between Lew and Edge. Interesting article.

For those of us who don't know every acronym, whats BRAIN stand for?

 

[SPINTECK]

Here I go, little guy treated poorly by his employer starts his own company doing same thing, without stealing any patents b/c no such patents existed. But financial backer w/money goes after him. You can't win. Companies threaten to fire you, then they sue you if you compete legitimately.


Sounds like Lew racing are a bunch of winers that don't like loosing business. Could you imagine if everytime a hair dresser left her store to start her own she would be sued for secret layering techniques or perms secrets?? This america thrives on competitiion is bullsh1t lately.

 

[-dustin]

Bicycle
Retailer
and
Industry
News

 

[DRB]

Here I go, little guy treated poorly by his employer starts his own company doing same thing, without stealing any patents b/c no such patents existed. But financial backer w/money goes after him. You can't win. Companies threaten to fire you, then they sue you if you compete legitimately.


Sounds like Lew racing are a bunch of winers that don't like loosing business. Could you imagine if everytime a hair dresser left her store to start her own she would be sued for secret layering techniques or perms secrets?? This america thrives on competitiion is bullsh1t lately.

Where does it say he was treated poorly? If he signed a non-disclosure act and broke it.....

I think Trek didn't patent the OCLV stuff to keep it out of the public eye. There were some pretty hefty non-disclosure agreements that employees had to sign in order to work with the technology.

 

[ire]

If the products came out looking like they used my "secret process" I would sue as well....it may not be an effort to stop the competition through litigation, there might actually be a violation.

 

[SuspectDevice]

I know the guys at Edge, and to say that they have moved far, far beyond 2004 tech is an undersatement...

 

[LordOpie]

If the products came out looking like they used my "secret process" I would sue as well....it may not be an effort to stop the competition through litigation, there might actually be a violation.

If a company doesn't file a patent, should they be afforded the same protections and rights?

 

[DRB]

If a company doesn't file a patent, should they be afforded the same protections and rights?

Depends on what other measures they put in place to protect their intellectual property.

 

[OGRipper]

If a company doesn't file a patent, should they be afforded the same protections and rights?

This is not about the same protection and rights as a patent. This is not about an outside party stealing a design that is out in marketplace, this is about enforcing a contract between an employer and former employee - a contract that appears to have been a condition to his employment.

Since the process itself is secret it's difficult to say who is right here, but conceptually an employer should be able to protect itself from employees stealing ideas, even if they are not patentable. Otherwise, there would be a lot of people getting paid to learn proprietary information with no restrictions on competitive use. It sounds like this employee was let into the "inner sanctum" and given access to ideas and processes only after signing an agreement to not use or disclose trade secrets, particularly not in a directly competitive way. He wouldn't have been given that access without signing the agreement. There are a lot of facts that are not clear, but it is not difficult for me to see both sides.

Generally speaking, trade secrets are protectable if they are not generally known and there is economic value arising (at least in part) from the fact that they are not known.

My guess is that this will come down to whether the "secret process" is truly a secret or if it was widely known in the industry, as the Edge guy is saying. If is IS widely known, it will be important for the Edge guy to show it is not a result of his own use and disclosure at some point in the past.

 

[sanjuro]

stop your college boy mumbo-jumbo.

 

[OGRipper]

stop your college boy mumbo-jumbo.

I got it from Matlock.

:biggrin:

 

[ire]

If Lew was really smart they would have had no compete clauses in employees contracts; this would have kept the employee from opening a competing business for a period of time....they should hire me to help them with their business :biggrin:

 

[Internal14]

If Lew was really smart they would have had no compete clauses in employees contracts; this would have kept the employee from opening a competing business for a period of time....they should hire me to help them with their business :biggrin:

meh...non-compete never hold water once in court. They're just there to be used to control the employee into thinking they can't do any better than where they're at.
Non-compete's are pretty much worthless in California that's for sure.

 

[DRB]

This is not about the same protection and rights as a patent. This is not about an outside party stealing a design that is out in marketplace, this is about enforcing a contract between an employer and former employee - a contract that appears to have been a condition to his employment.

Since the process itself is secret it's difficult to say who is right here, but conceptually an employer should be able to protect itself from employees stealing ideas, even if they are not patentable. Otherwise, there would be a lot of people getting paid to learn proprietary information with no restrictions on competitive use. It sounds like this employee was let into the "inner sanctum" and given access to ideas and processes only after signing an agreement to not use or disclose trade secrets, particularly not in a directly competitive way. He wouldn't have been given that access without signing the agreement. There are a lot of facts that are not clear, but it is not difficult for me to see both sides.

Generally speaking, trade secrets are protectable if they are not generally known and there is economic value arising (at least in part) from the fact that they are not known.

My guess is that this will come down to whether the "secret process" is truly a secret or if it was widely known in the industry, as the Edge guy is saying. If is IS widely known, it will be important for the Edge guy to show it is not a result of his own use and disclosure at some point in the past.

All those words to say.... ah.... I'm not really sure what they say.

I wonder what OG does for a living?

 

[sanjuro]

All those words to say.... ah.... I'm not really sure what they say.

I wonder what OG does for a living?

Showing off his edjumacation on mountain bike forums.

 

[ire]

I like this part:

Lew, an engineering graduate of the U.S. Naval Academy, also alleges that the process has been used by his other company, Lew Aeronautics, and could be applied to “low observable” or “stealth” technologies and the dissemination of the information could pose “a grave and severe threat” to U.S. security.

When in doubt, say its for national security

 

[MtnbikeMike]

When in doubt, say its for national security

And call the guy a terrorist.

 

[ire]

I'm posting this pic (mountain wheels, not road), because these wheels may well use the "secret process".....and James hates carbon clinchers

and some tubulars