A Gaithersburg company engaged in developing and selling grain-analyzing devices has filed a $72 million lawsuit charging a Silver Spring competitor and two other companies with the theft of one of its products.
It is believed to be one of the biggest cases involving charges of industrial espionage ever in this area and is enlarged by a countersuit for more than $1 million.
Trebor Industries Inc., a small, family-owned company founded three years ago, filed the original suit in Montgomery County Circuit Court in May.
Named as defendants are Pacific Scientific Co., an Anaheim, Calif., manufacturer of nuclear, industrial and agricultural equipment; Pacific's Gardner/Neotech division in Silver Spring, and Grain Dryers Service Inc., a Granite Falls, Minn., distributor of grain-drying equipment.
Trebor accuses them of conspiracy in the alleged theft of a machine designed to measure protein and moisture levels in whole grain.
Meanwhile, Pacific Scientific has filed a countersuit for more than $1 million against Trebor in U.S. District Court in Baltimore.
Trebor's president, Robert D. Rosenthal was a founder and president of Neotech Corp., the forerunner of Gardner/Neotech, until he resigned in 1979.
Later that year, Rosenthal formed Trebor, which specializes in the development of grain-handling, measuring and analyzing equipment and other sophisticated instruments used in agriculture.
In its courtersuit, Pacific Scientific claims that while Rosenthal was president of Neotech, he prevented the company from pursuing development of a whole-grain analyzer.
Pacific Scientific said Rosenthal wanted to develop the analyzer for himself and that after resigning he obtained financing for research and development from a Swedish firm with which Neotech had had discussions.
At issue in the case is the mysterious disappearance and handling earlier this year of one of Trebor's first successfully developed instruments, called the Trebor-90 Grain Tester.
Rosenthal calls the incident "a blatant case of industrial espionage" and suggests a "double agent" was involved.
Prior to the introduction of the Trebor-90 in 1980, grain had to be ground before samples could be tested for protein and moisture levels. The Trebor-90 uses near-infrared light to measure those elements in whole grain.
Court papers show that early last February, Trebor retained Grain Dryers Services as its exclusive sales agent in South Dakota. As part of the deal, Trebor loaned a Trebor-90 unit to Grain Dryers to be used as a demonstrator.
On the basis of information it obtained from unnamed sources in mid-February, Trebor alleges that Gardner/Neotech, aided by Grain Dryers, illegally obtained a Trebor-90. The $8,000 machine, the allegation continues, was dismantled at Gardner/Neotech to ascertain how it was manufactured in order to copy its functions.
Trebor said Gardner/Neotech denied having possession of the machine and that a few days later the unit was shipped to Trebor offices--not from South Dakota, but from Minneapolis.
According to court documents, an inspection of the unit by Trebor officials showed that "the integrity of the unit had been violated and parts thereof had been otherwise removed and changed."
Trebor contends that as a result, it has been "deprived of the use" of the machine as designed and "all trade secrets developed" in its manufacture and its $350,000 research and development has been compromised.
Trebor further contends that it has been deprived of "the competitive edge" that it held in the grain-measuring market.
In return for what it calls "intentional, wanton and malicious" acts, Trebor is seeking $18 million in compensatory damages plus $54 million in punitive damages from the three defendants.
In its counterclaim, Pacific Scientific denies that Gardner/Neotech ever had the Trebor unit. It acknowledges, however, that the Trebor-90 in question was shipped to Minneapolis.
Pacific Scientific, in its courtersuit, outlines decisions Rosenthal made while president of Neotech. Those decisions, Pacific Scientific charges, were designed to damage Neotech.
Pacific Scientific is seeking $1 million in punitive damages and $10,000 in compensatory damages from Rosenthal.
Rosenthal denies Pacific Scientific's allegations. and argues that the issue to be resolved is the disappearance and unauthorized shipment of his company's product.