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$110m lawsuit accuses US firm of securing stator technology `improperly`

11 March, 2011

The Italian motor technology developer Tecnomatic has filed a $110m lawsuit against the US motor manufacturer Remy International, accusing it of “improperly” securing proprietary stator technology developed by Tecnomatic and using it to apply for $60m of grants from the US Department of Energy (DOE). Remy has rejected the allegations as being “false and totally without merit”.

Tecnomatic’s 79-page lawsuit, filed in the US District Court for the Northern District of Illinois, charges Remy and others with multiple counts of fraud, breach of fiduciary duty, unfair competition and negligent misrepresentation. According to the complaint, at least one former Remy employee has submitted sworn testimony demonstrating that Remy’s application for DOE funding in 2008 included technical materials developed by Tecnomatic.

Tecnomatic, founded in 1973, develops systems used to manufacture complex stator windings for electric motors, including those used in hybrid electric vehicles. It also develops automated assembly systems for other automotive components including alternators, turbochargers, starters, wiper motors, ignition coils, electric steering and air bags. Its customers include Ferrari, General Motors, Magneti Marelli, Ford, TRW, Denso, Magna, ABB and GKN.

Tecnomatic’s lawsuit details 15 separate charges including misappropriation of trade secrets. It alleges that during a period of mutual confidentiality, Remy modified drawings and documentation supplied by Tecnomatic to conceal its true origin. This material was instrumental in securing the $60m DOE grant as part of the American Recovery and Reinvestment Act.

“After several attempts at settlement, we are extremely disappointed to have brought this lawsuit against one of our customers,” says Tecnomatic’s president and CEO, Giuseppe Ranalli (above). “Theft of intellectual property is something we take very seriously, and we fully intend to pursue this action until our claims have been satisfied.

“We acted in good faith over the course of four years under the pretence that Tecnomatic would be working together with Remy as part of a joint venture,” he adds. “Instead, we now have an adversary that has wrongfully adopted our technology as their own to establish a significant presence in this market.

“Theft of intellectual property is something we take very seriously,” Ranalli declares, “and we fully intend to pursue this action until our claims have been satisfied”.

Responding to Tecnomatic’s charges, Remy International says that the allegations in the lawsuit are “false and totally without merit”. In 2008, the US company filed its own complaint against Tecnomatic in the Indiana District Court. It suggests that the new lawsuit is “a desperate attempt by Tecnomatic to force a settlement of this pending case as it nears trial.”

Remy points out that it has been making rotating electric products for more a century. “Remy`s integrity is well-known in our industry,” it adds. “It is unfortunate that Tecnomatic has filed a baseless lawsuit for a competitive advantage using false statements about Remy and its technology. Remy will vigorously fight these claims and pursue all remedies for Tecnomatic`s abuse of the judicial process, including damages for false claims.”

Remy International, which spun off from General Motors in 1994, manufactures and distributes starters, alternators and electric propulsion motors. It collaborates with companies around the world to develop automotive innovations.

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