Corona Factory Files Landmark Trade Secret Lawsuit in New Hampshire Federal Court

Leading Private Label Company Alleges Massive Data Breach by SGS North America, Inc., Threatening Millions in Investment and Profits

Amid a surge of corporate theft nationwide, U.S. Continental Marketing, Inc. has initiated trade secret litigation against SGS North America, Inc. alleging misappropriation of proprietary and confidential chemical formulations that may cost U.S. Continental millions of dollars.

The largest private label leather and fabric care company in the world, U.S. Continental operates out of a 100,000 square foot factory in Corona, California, and partners with popular footwear, fashion, and furniture brands such as Birkenstock, Timberland, and Michael Kors to develop a range of products. The company provides commercial packaging solutions as well.

In its complaint filed last week in the U.S. District Court for the District of New Hampshire, U.S. Continental alleges that earlier this year, it spent millions to develop five unique and secret chemical formulations for an unnamed customer for use on branded textiles. Those formulas were sent to SGS North America for independent testing.  David Williams, U.S. Continental’s President, explains, “Leading up to its testing, we made very clear to SGS that the confidentiality of any and all information about our formulations was critical. Third parties, and even our customers, could not be privy to our proprietary data and SGS knew that.”

Williams added, “To put a finer point on the sensitivity of the formulations in question, we negotiated an ironclad NDA with SGS, which it signed, promising not to disclose confidential information related to our formulations to anyone without written approval.”

U.S. Continental’s complaint alleges that despite its assurances, SGS twice sent detailed, unredacted testing reports directly to the customer in August, revealing specifics about the chemical formulations SGS promised to keep under wraps.

According to Williams, “By virtue of SGS’s indiscretion, which one of its Vice Presidents cavalierly claimed was a ‘mistake,’ our customer was sent all the information it needed to manufacture essential chemical formulations on its own. That puts at risk the $2 million we invested in R&D, along with another $20 million or so in profits from our manufacturing agreement with the customer. It only gets worse from there if SGS discloses our proprietary information—which it refuses to return—to any others.”

Jeffrey Farrow, a partner at Michelman & Robinson, LLP, which represents U.S. Continental along with local counsel in New Hampshire, says, “It’s beyond crucial that trade secrets, like my client’s chemical formulations, be carefully safeguarded. By failing to do so, SGS breached its NDA—a breach that continues given that the data at issue has yet to be returned despite multiple requests from U.S. Continental. This is simply unacceptable and through this lawsuit, we want SGS to know that its unlawful disclosure of trade secrets, and unlawful retention of them, won’t go unchecked.”

The lawsuit is currently pending and U.S. Continental is awaiting a response from SGS.