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.

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 in 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.”

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.