Update: GE accuses Siemens of stealing trade secrets

GE has filed a lawsuit against Siemens Energy, alleging its competitor “misappropriated” trade secrets and used them unfairly to win gas turbine contracts.

In the suit, filed in U.S. District Court in Virginia, GE accuses Siemens of “willful and malicious misappropriation of GE’s trade secrets” by one of the company’s account managers.

“The sprawling and calculated theft of GE’s trade secrets has enabled Siemens to win, so far, billions of dollars of contracts and remains ongoing—all at the expense of GE’s ability to fairly compete,” the lawsuit alleges.

According to the suit, during a confidential bidding process for a peaker plant project in Virginia for Dominion Energy, GE said a current Siemens account manager knowingly and surreptitiously received GE’s trade secrets using his personal email address on multiple occasions.

“Rather than reject or destroy GE’s trade secrets, he forwarded them to his Siemens email address and widely disseminated them to dozens of other Siemens employees, including the employees directly responsible for analyzing and preparing Siemens’ bid responses, who then—critically—used GE’s trade secrets to improve Siemens’ own bid, ultimately winning a lucrative contract to provide gas turbine units and maintenance services in Virginia worth at least US$225 million, and potentially as much as US$340 million,” the suit alleges.

Siemens released this statement:

We have only just learned about the lawsuit from the media and have not yet been served officially. When that happens, we will review it thoroughly and respond appropriately.

According to reports, the lawsuit relates to a case regarding the use of competitive information that Siemens Energy identified through its own robust compliance processes. We involved a third-party in conducting the internal investigation and disclosed the findings to the customer and to the competitors.

In addition, Siemens Energy implemented extensive remedial measures in response. These include:

• • • Swift and appropriate discipline of the involved employees, including separation from the company.
    • With the support of a third-party expert supplier, comprehensive measures were taken to remove the confidential competitor information from all internal Siemens Energy systems and sources, including databases and pricing models.
    • Restricting employees who received the competitor confidential information from working on similar bids or proposals and re-assigning employees to other parts of the business.
    • Extensive additional compliance training of all employees in the U.S. and in our global Generation Division who are involved with project bidding and pricing.

Siemens Energy’s integrity is foundational to our operating principles and will not be compromised under any circumstances.

Dominion Power announced in December that it was canceling the project. The plant, announced in November 2019, would have connected to the existing Transco natural gas pipeline.

GE said Siemens then waited 16 months before disclosing to GE that it possessed GE’s trade secrets in a letter, in which Siemens misrepresented and minimized the scope and impact of its unlawful scheme.

Along with the Virginia project, GE alleges the trade secrets misappropriated by Siemens are relevant to at least eight other gas turbine contracts that Siemens unfairly won over GE’s competing bid in the 16-month period before it first notified GE.

GE has asked for Siemens to cease using the allegedly stolen material and pay damages totaling hundreds of millions of dollars or more. The lawsuit says that Siemens has “steadfastly refused” to assure GE that documents containing the trade secrets have been destroyed.