POET Sues Engineering Firm

Source: By Todd Neeley, DTN/Progressive Farmer • Posted: Wednesday, March 8, 2017

The nation’s largest corn ethanol producer POET, LLC, and its research division alleges in a lawsuit filed Monday that a former employee who works for an engineering firm markets and sells a technology identical to POET’s, under a different trademark.

According to the lawsuit POET alleges its former employee Jerry Baker, who now works for Nelson Engineering in Sioux Falls, South Dakota, along with a number of former POET employees, repackaged a POET technology called “Delayed Dilution” as “Hydrolysis Utilization.” The lawsuit said POET uses the technology to improve ethanol production at all of its 27 plants in Indiana, Michigan, Iowa, Minnesota, Missouri, Ohio and South Dakota.

“In June 2016, POET learned that Nelson Engineering was promoting a technique it called ‘Hydrolysis Utilization’ at the Fuel Ethanol Workshop in Milwaukee, Wisconsin,” according to the lawsuit filed in the U.S. District Court for the District of South Dakota.

“POET became concerned because Nelson Engineering’s description of Hydrolysis Utilization sounded exactly like POET’s Delayed Dilution technology. POET’s concerns were later confirmed. Specifically, POET learned that Nelson Engineering tried to sell ‘Hydrolysis Utilization’ to at least one of POET’s competitors, an ethanol plant called Glacial Lakes Energy, LLC, in Watertown, South Dakota. An individual who worked at Glacial Lakes at that time and who now works for a POET plant, realized upon his new employment that the technology Nelson Engineering had offered to Glacial Lakes was the same as POET’s Delayed Dilution technology.”

POET outlines in its lawsuit the steps taken to protect the company’s proprietary information.

“POET is known throughout the industry for its strict protection of its proprietary information and its culture of confidentiality,” the company said. “POET requires all of its employees, as well as third-party contractors, consultants and vendors, to sign confidentiality agreements.

“As part of their contracts with POET, POET plants are required to sign confidentiality agreements and, in turn, require their employees, as well as third-party contractors, consultants, and vendors, to do the same. POET marks key documents as ‘confidential,’ controls visitor access to company facilities, and limits the taking of photographs. These same measures are required of POET plants. POET has never published or otherwise publically disclosed anything related to the details of POET’s Delayed Dilution technology.”

The lawsuit alleges four counts including a misappropriation of trade secrets, misappropriation of POET’s research division’s trade secrets, a breach of a confidentiality agreement and interference with a contract.

POET asks the court to set a jury trial and to provide injunctive relief to stop the use of the company’s technology, as well as to require Nelson Engineering to pay damages and costs, among a number of other requests.