Seacon Corporation, a North Carolina manufacturer of custom chemicals, filed a breach of contract lawsuit against agriculture giant and chemical company BASF on Thursday in the District of New Jersey asking the court to enjoin the defendant “from misappropriating its confidential and proprietary systems and production process.”
The two parties allegedly signed a contract, including a non-disclosure agreement (NDA). BASF asked the plaintiff to help develop a manufacturing process for a surface coating on a product that would need to absorb moisture and control odor. The plaintiff said it spent 5 years developing the system and finding the best machines to do the production.
Seacon claimed it “developed the systems and methods for surface coating a BASF superabsorbent polymer known as Hysorb OC T8999X and/or 6600 OC (SAP OC).” The contract dictated that Seacon would have control of its systems and methods, but the information could only be used for the production of the BASF product. The complaint said that BASF did not pay Seacon for the time and labor used to develop the system, and that the “work instructions” are owned by Seacon.
The plaintiff explained in the complaint that “BASF can only use Seacon’s proprietary process if Seacon is coating the SAP OC at its location.” After the NDA expired BASF would be required to keep the information confidential for at least 10 years. The defendant, according to Seacon’s complaint, “began plotting and scheming” to produce the SAP OC using a third-party at BASF’s Houston Distribution Center.
On Tuesday, September 8, the defendant notified Seacon that it would not order more SAP OC past the current outstanding orders. The plaintiff alleged in the filing that this is evidence of BASF’s breach of the parties’ agreement. “While BASF claimed this termination of business was only through the end of the year, the reality is that this is the first time since 2013 that BASF has not regularly ordered SAP OC from Seacon. Moreover, it aligns perfectly with BASF’s plan to misappropriate Seacon’s confidential coating process and cut Seacon out of the business all together,” the complaint stated.
Seacon, represented by Epstein Becker & Green, P.C., asked the court to stop BASF from transferring the production of SAP OC to their own facility and to return any copies of the working instructions owned by Seacon. The company also sought damages and filed counts of breach of contract, violations of New Jersey’s Trade Secret Act, and unfair competition.
