In keeping with GE, Siemens Power used stolen commerce secrets and techniques to control gives in authorized proceedings
During the IPO of Siemens Energy on the Frankfurt Stock Exchange on September 28, 2020 on the Frankfurt Stock Exchange, a trader will step next to the logos of Siemens Energy AG.
Ralph Orlowski | Reuters
General Electric sued rival Siemens Energy Thursday, alleging the company used stolen trade secrets to manipulate deals on contracts valued at “billion dollars” to supply gas turbines to public utilities.
The lawsuit, which was filed in a U.S. district court in Virginia on Thursday, centers on the 2019 offer to supply Dominion Energy, a Virginia-based utility company, with gas turbine equipment and maintenance services.
According to the lawsuit, during the tendering process, a Dominion employee sent confidential information that GE submitted as part of its bid to a Siemens employee. The information that was allegedly passed on illegally to Siemens also included an analysis of all offers for the so-called Peakers project, which served as a “blueprint” to help Siemens award contracts worth at least USD 225 million and up to USD 340 million .USD to support.
GE found in the lawsuit that Dominion serves approximately 4 million customers on the east coast and is a “key strategic partner for power equipment manufacturers.”
The new suit comes just a few months after Siemens spun off Siemens Energy, which was traded on the Frankfurt Stock Exchange in September. GE alleged in the lawsuit that Siemens used trade secrets to win contracts that raised the price of Siemens Energy’s IPO.
Tim Proll-Gerwe, a spokesman for Siemens Energy, told CNBC that the company had not yet been officially informed of the lawsuit and only found out about it from news reports. He found that Siemens’ compliance process identified the relevant violation and that the employees involved were disciplined.
“The integrity of Siemens Energy is a basic requirement for our operating principles and is not compromised under any circumstances,” he said in a statement.
Siemens allegedly only announced in September that one of its employees had obtained the trade secrets, roughly 16 months after the information was allegedly first accessed. This was described in a letter GE labeled “nothing to see folks,” which minimized the violation of the lawsuit. That announcement came after Siemens completed its own internal investigation, the lawsuit states.
Since the disclosure, Siemens has “steadfastly refused” to assure GE that documents containing the trade secrets have been destroyed, the lawsuit said.
“At GE, we protect and defend our intellectual property aggressively. As this lawsuit is ongoing, we have no further comments at this time,” Mathilde Milch, a GE spokeswoman, told CNBC.
GE ordered the judge to stop Siemens’ use of the allegedly stolen material and pay damages of at least hundreds of millions of dollars.
“Siemens employees have not only received and distributed GE’s trade secrets,” said GE in the lawsuit. “They used trade secrets aggressively and in the affirmative to obtain an unfair economic advantage in preparing competitive bids against GE.”
The information Siemens is alleged to be able to access included GE’s trade secrets regarding four gas turbine models, the pricing structure for various turbine units, and the maintenance process for GE turbines. GE said in the lawsuit, Siemens employees likely used the allegedly stolen information to win eight additional contracts for a total value of more than $ 1 billion.
Siemens’ possession of this information enables the company “to undercut GE’s price and / or design its products to meet GE specifications,” GE said in the lawsuit.
“Even for projects that GE wins, Siemens can use GE’s confidential information to manipulate the bidding process and lower the price. This will win GE’s successful bids for gas turbine projects with wafer-thin or negative profit margins,” added GE.
The company found that it is currently competing with Siemens for a contract with Dominion Energy in South Carolina. GE said it was competing at a disadvantage because Siemens employees could still have access to the trade secrets. Offers for this contract are due next week.
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