MachiningCloud Sues Kennametal Over Trade Secrets, Contract Breach - Modern Distribution Management

MachiningCloud Sues Kennametal Over Trade Secrets, Contract Breach

The product data provider says the metalworking products manufacturer used confidential information to "knock-off" its sales platform.
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Cloud-based product data company MachiningCloud is suing Pittsburgh, PA-based metalworking products manufacturer Kennametal for allegedly using its trade secrets to build a “knock-off” sales platform.

The lawsuit — filed in Ventura County, California — outlines how Kennametal contracted with MachiningCloud to build Novo, a proprietary sales platform. Over time though, Kennametal built its own competing platform, and MachiningCloud alleges the company used its confidential information and intellectual property to do so.

MachiningCloud also alleges Kennametal failed to pay the commissions it owed on more than $1 billion worth of transactions initiated by or through the use of Novo.

MachiningCloud seeks $330 million in damages that would enjoin Kennametal from “further acquiring, disclosing or using MachiningCloud’s trade secrets,” and would shut down Kennametal’s sales platform.

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“We believe this is a simple case of a large company trying to take advantage of a smaller company,” MachiningCloud officials said in a written statement.

The lawsuit asserts, among other things, that Kennametal breached agreement provisions regarding confidentiality, payment rights and audit and accounting rights; violated the California Uniform Trade Secrets Act; and breached the implied covenant of good faith and fair dealing.

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“Since we discovered Kennametal’s actions, we have repeatedly attempted to reach an amicable resolution with Kennametal to avoid bringing this litigation,” MachiningCloud said. “Unfortunately, we were ultimately forced to take the steps necessary to protect our company and our intellectual property.”

A Kennametal spokesperson told industry press that the complaint is “entirely without merit.”

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