National Oilwell Varco Sues CeRam-Kote over Alleged Bribery Tied to Knockoff Oilfield Equipment

HOUSTON – Houston-based National Oilwell Varco LP (NOV), an international  designer and manufacturer of oil and gas drilling and production equipment, has filed a lawsuit against Big Springs, Texas-based CeRam-Kote Inc. based on claims that CeRam-Kote’s president bribed an NOV employee to produce a knockoff version of NOV’s proprietary oilfield equipment.

In October 2012, NOV won a temporary restraining order against CeRam-Kote as part of the Houston state district court lawsuit, which includes claims that CeRam-Kote president Kevin Freeman paid an NOV employee $40,000 to make a copy of an NOV blast unit used to clean oilfield drilling pipes. This is the second lawsuit NOV has filed against competitors for allegedly stealing the company’s trade secrets in order to make knockoffs.

NOV is represented by attorneys Lauren Reeder and Ben Foster from the Houston-based complex commercial litigation and intellectual property law firm Ahmad Zavitsanos Anaipakos Alavi & Mensing PC.

In this most recent lawsuit, NOV says the company received an anonymous tip that led to a confession from one of its own employees who allegedly accepted the bribe from Mr. Freeman. NOV accuses CeRam-Kote and Mr. Freeman of conspiracy with the NOV employee, misappropriation of trade secrets, conversion and additional claims. NOV also has sued the employee for allegedly breaching his contract with the company.

The lawsuit alleges that CeRam-Kote did not have the technology to make the advanced proprietary blast unit and “rather than investing in research and development themselves, they decided to cheat.”

The case is National Oilwell Varco LP v. CeRam-Kote Inc., et al., No. 2012-58748, in the 234th Judicial District Court in Harris County.

NOV’s lawsuit has been reported by the legal news website Law360 (subscription required).

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