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Kolon is challenging U.S. in trade-secrets case

By Erin Geiger Smith

(Reuters) - South Korea's Kolon Industries Inc <120110.KS> is seeking dismissal of U.S. government charges of stealing trade secrets from DuPont Co , on the grounds that the Department of Justice did not properly notify the company of the case.

U.S. District Judge Robert Payne in Richmond, Virginia on Friday will hear arguments over whether the government has properly served Kolon with court papers in the manner that would require it to face the criminal charges.

The government has argued Kolon is making a novel argument that is an "irrational interpretation" of U.S. legal procedure.

The U.S. Department of Justice announced last October the unsealing of an indictment against Kolon over how the company produced high-strength fiber.

The charges came on the heels of DuPont's $920 million jury victory over Kolon in September 2011. DuPont had accused Kolon of misusing propriety information relating to Kevlar, a fiber produced by DuPont and used in armor, military helmets, tires and fiber-optic cables.

The Justice Department's allegations against Kolon and five of its executives relate to the same conduct.

In December, attorneys for Kolon said the case should be dismissed because the government has failed to properly serve the company with a copy of the summons, as required by law.

The summons was not properly served, Kolon argued, despite the fact that the government emailed the documents to Kolon employees and left a copy with a Kolon subsidiary.

Kolon argued that the U.S. government must mail the summons to Kolon's "last known address" in the United States and that, because Kolon does not have such an address, it cannot be properly served.

The United States argued in court papers that Kolon has been properly served, including to its authorized agent in New Jersey.

Further, the government said, no court has ever dismissed an indictment on the theory that a foreign company cannot be prosecuted for crimes committed in the United States just because that company does not have an active U.S. address.

The government also noted that Kolon has formally appeared in U.S. courts on several occasions, including the DuPont trial.

The Justice Department declined to comment. Stephen Neal of law firm Cooley, who represents Kolon, and other attorneys for the company were not immediately available for comment.

The case is U.S. v. Kolon, et al, U.S. District Court for the Eastern District of Virginia, No. 12-137.

(Reporting by Erin Geiger Smith; Editing by Phil Berlowitz)

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