Quoted Text

ROTTERDAM
GE sues former supplier, claims infringement
BY JAMES SCHLETT Gazette Reporter

   A Rotterdam manufacturer obtained protected design information from the General Electric Co. and used it to make precision turbine parts that were sold to GE’s competitors, according to a lawsuit filed by GE.
   GE and the defunct Feuz Manufacturing Inc. (FMI) are facing off in court over a series of transactions that GE said were not sanctioned. GE on Tuesday filed a lawsuit in U.S. District Court in Albany seeking at least $2 million in damages from FMI.
   FMI was GE’s parts supplier. The company had been operated since 1984 by Gary Feuz, a former GE employee.
   FMI manufactured shrouds, seal pins, rotors and other parts for the GE Energy gas turbines. GE occasionally provided FMI with engineering drawings and specifi cations for those parts.
   That intellectual property represented millions of dollars worth of research and development work undertaken by GE, the company said. FMI was required to keep it confidential under a sale agreement.
   “FMI’s … theft of GE’s trade secrets damaged GE by depriving GE of payments that GE was lawfully entitled to receive in exchange for the use and sale of drawings, speculations and designs,” the suit states.
   FMI’s attorney, Scott Paton, was not able to comment on the federal suit because he had not received a copy of it as of Thursday morning.
   An FMI employee in 2004 told GE that Feuz was using the proprietary information to make and sell parts to GE’s competitors. A GE investigation confirmed the tip. It also recovered an FMI invoice to a GE competitor with a proprietary GE engineering drawing attached to it, according to court documents.
   The findings prompted GE to issue a cease-and-desist notification to FMI, ordering it to stop using its intellectual property to manufacture parts for non-GE customers. In April 2004, Gary Feuz sent a notice about the cease-and-desist order to his non-GE customers, who included World Wide Gas Turbine Products in Ballston Lake, Steam Specialties in Saratoga Springs and Gas Turbine Parts & Services in Clifton Park, according to court documents.
   “We have learned an invaluable lesson from our past carelessness and will never again engage in the misuse of GE’s property or use it in any unauthorized manner whatsoever,” Feuz said in a July 2004 letter to GE.
   After the infringement discovery, GE severed its relationship with FMI, crippling the parts maker. Between 1984 and 2004, sales to GE accounted for approximately 70 percent of FMI’s business.
   In April, FMI sued GE in state Supreme Court in Schenectady County for $533,000 for alleged unpaid orders.
   Amid tensions between GE and the company, Feuz in 2004 sold his company to three Hickory, N.C., investors for $3 million.
   The North Carolina trio tried to revive the business — renamed VStream Manufacturing — but it closed in March and underwent liquidation in May.
   FMI’s roots date back to the founding of Altamont Metal Products in 1962. After the business became VStream, its owners in 2005 announced plans to invest $2.18 million in equipment and double the size of its 50-person labor force. They planned to take more orders from GE and expand into Asian and European markets.
   But those plans never took off. The Green Island-based Zak Inc. in spring acquired FMI’s assets, including its 55,000-square-foot Rotterdam headquarters. Most of those assets were auctioned off in May, but Larkin Commercial Properties is marketing the Mariaville Road facility for $3.5 million.