A trader walks next to the logos of Siemens Energy AG during the initial public offering of Siemens Energy (IPO) at the Frankfurt Stock Exchange in Frankfurt, Germany, September 28, 2020.
Ralph Orlowski | Reuters
General Electric sued rival Siemens Energy on Thursday, alleging that the company had used stolen trade secrets to manipulate bids for “billions of dollars” in contracts to supply gas turbines to public utilities.
Central to the lawsuit, filed in a U.S. district court in Virginia on Thursday, is a 2019 bid to provide gas turbine equipment and maintenance services to Dominion Energy, a Virginia-based energy company.
During the bidding process, the lawsuit alleges, a Dominion employee sent confidential information submitted by GE as part of their offer to a Siemens employee. The information reportedly illegally shared with Siemens also included an analysis of all bids for the so-called Peakers project, which served as a “blueprint” to help Siemens win the contract, worth at least $ 225 million and up to $ 340 million.
GE noted in the lawsuit that Dominion serves approximately 4 million customers on the East Coast and is a “critical strategic partner for energy equipment manufacturers.”
The new suit comes just months after Siemens split off Siemens Energy, which began trading on the Frankfurt stock exchange in September. GE alleged in the lawsuit that Siemens used its trade secrets to win contracts that pushed up the price of Siemens Energy’s IPO.
A Siemens Energy representative did not immediately comment on the suit.
Siemens reportedly only disclosed in September that one of its employees had obtained the trade secrets, some 16 months after the information was reportedly first opened, in what GE described as a “nothing to see here, folks” letter in which the Violation was minimized, the lawsuit said. That report came after Siemens completed its own internal investigation, the lawsuit says.
Since the disclosure, Siemens has “steadfastly refused” to assure GE that documents containing the trade secrets have been destroyed, the lawsuit said.
“At GE, we aggressively protect and defend our intellectual property. As this lawsuit is ongoing, we have no further comments at this time,” Mathilde Milch, a GE spokeswoman, told CNBC.
GE asked the judge to stop Siemens’ use of the allegedly stolen material and to pay damages of at least hundreds of millions of dollars.
“Siemens employees have not only received and disseminated GE’s trade secrets,” GE said in the lawsuit. “They aggressively and affirmatively used the Trade Secrets to gain an unfair commercial advantage in preparing competitive bids against GE.
GE’s trade secrets related to four gas turbine models, the pricing structure for different turbine units and GE’s turbine maintenance process are among the information reportedly requested by Siemens, the suit said. GE said in the lawsuit that Siemens employees likely used the allegedly stolen information to win eight other contracts, for a combined value of more than $ 1 billion.
Siemens’ possession of that information allows the company to “undermine GE’s price and / or develop its products to meet GE specifications,” GE said in the lawsuit.
“Even for projects that GE wins, Siemens is able to use GE’s confidential information to manipulate the bidding process and lower the price, thereby winning GE’s successful bids on wafer-thin or negative margin gas turbine projects,” added GE .
The company noted that it is currently competing with Siemens for a contract with Dominion Energy in South Carolina. GE said it competes at a disadvantage because Siemens employees can still have access to the trade secrets. Bids for that contract must be submitted next week.