By Mike Spector
NEW YORK, Jan. 14 (Reuters) – General Electric Co has accused a Siemens Energy AG subsidiary of using stolen trade secrets to defraud bids for lucrative gas turbine supply contracts for utilities and cover up improper business gains, totaling more than $ 1 billion, according to a lawsuit filed on Thursday.
GE sued rival company Siemens Energy Inc in a U.S. district court in Virginia, claiming that the theft dates back to May 2019, when industrial conglomerates made an offer to provide gas turbine equipment and services to Dominion Energy Inc. Dominion is a Virginia energy utility that provides electricity to approximately 4 million customers on the east coast.
The process follows the separation of Siemens AG from its energy business to create Siemens Energy. GE claims that Siemens Energy used trade secrets wrongly received from a Dominion employee, in part to win contracts that would increase the price of its initial public offering that took place in September.
A Siemens Energy spokesman did not immediately comment and the Dominion representative did not immediately respond to requests for comment.
In the course of GE’s bid to negotiate with Dominion, the suit alleges, a senior Dominion employee began to send confidential business information that GE had submitted to a Siemens account manager. The information also included Dominion’s analysis of all tenders, giving Siemens a “plan” to win contracts worth up to $ 340 million with the service concessionaire, known as the Peakers Project, GE claimed.
The recipient of GE’s trade secrets at Siemens passed the information on to colleagues who included those preparing the Dominion offer, which they used to help win the business, the suit said.
The Dominion employee, who no longer works there, passed the information to the Siemens manager at least half a dozen times, in some cases forwarding it from his personal email address to that of the Siemens manager’s wife, said the process. The employee who receives it remains at Siemens, says the process.
In a bidding package, GE provided Dominion with technical specifications for four models of gas turbines, prices for different combinations of equipment, and details on how the company would do the service and maintenance, the process says. Gas turbines are combustion engines that convert natural gas into energy generators that supply electricity to large residential and commercial enterprises.
Siemens only alerted GE about the undue receipt of trade secrets 16 months later, in September, through what GE described as a “nothing to see here, personal” letter minimizing the infringement, the lawsuit claimed.
The warning came after Siemens completed its own internal investigation and Dominion completed its own investigation, the suit said. Dominion warned GE of the alleged illegality before Siemens, the suit said. GE asked a judge to prevent Siemens from using the allegedly stolen material and to pay damages worth hundreds of millions of dollars or more.
The litigation is the latest legal battle involving corporate rivals, who faced off in patent infringement lawsuits last year.
The alleged theft has put GE at a disadvantage in competition for contracts worth at least $ 120 million each, the suit says. GE and Siemens are competing in another Dominion bid, scheduled for January 19, adding urgency to resolve the theft allegations, the suit said.
Since the first undue receipt of the information in May 2019, Siemens has won eight other gas turbine tenders over GE’s competing bids valued at more than $ 1 billion, the suit alleges.
In most of these proposals, GE offered some of the same gas turbine models as the Dominion project and, in one case, equipment with similar specifications, the process said.
According to GE, the Siemens employee who received the trade secrets passed them on to several colleagues, some of whom played important roles in preparing other gas turbine tenders. GE lost Dominion’s bid for Siemens in July 2019 without explanation, the suit alleges, and Siemens employees continued to disclose and use GE trade secrets to adapt at least two additional gas turbine proposals.
Siemens also “vehemently refused” to assure GE that the documents containing the trade secrets were destroyed, the suit says. (Reporting by Mike Spector; Editing by Edward Tobin)