Evergreen Settles Trade Secrets Case


Evergreen Holdings, its engineering affiliate and a former employee have reached a settlement in a trade secrets case that underscores the value and importance of engineering knowledge in the rerefining industry.

Evergreen, Chemical Engineering Partners, and former employee Rohit Joshi last week said they had reached a global settlement to resolve an arbitration action filed against Joshi in December 2007 and all related actions.

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Chemical Engineering Partners business development manager Mark Williams said the arbitration action came about after Joshi left Evergreen affiliate CEP in late 2005 and started a new company – Sequoia Global Inc. – in Pune, India. According to Sequoia’s web site, it designs and builds plants for oil recycling. CEP provides rerefining technology, process simulation, consulting services and basic engineering designs for clients worldwide.

“In essence, there was an injunction – he’s unable to use our proprietary rerefining technology that he basically signed a confidentiality agreement not to use while he was an employee here,” Williams explained to Lube Report, noting that Joshi was an employee with CEP from January 1997 through November 2005.

Under the terms of the settlement agreement jointly announced May 27, no damages were paid, and neither party admitted any wrongdoing or liability. The parties each released all claims it may have against the other. The agreement includes settlement of all litigation between the parties, as filed in Irvine, Calif.; Oklahoma City, Okla.; and Pune, India. “Everything was covered by a secrecy agreement until it was settled,” Williams said, explaining why the original arbitration action was not publicly announced. Part of the agreement for settling was a joint release announcing it, he added.

Joshi said the settlement ended what was a bit of a distraction for Sequoia. “I am proud that I was able to stand up to someone who is financially much stronger,” he told Lube Report.

As part of the agreement, Joshi – on behalf of himself, Sequoia Global Inc. and Sequoia Global Private Ltd. in India – agreed that in providing used oil distillation and/or hydrotreating engineering and design services, he has not and will not make use of the following Evergreen trade secrets:

  • A proprietary method of chemically treating used oil feedstock, to inhibit fouling and reduce catalyst poisons in the rerefining process.
  • A proprietary method of operating the thin film evaporator, as practiced by Evergreen at its Newark, Calif., rerefinery, for the purpose of producing distillate of specific specifications.
  • A proprietary engineering design whereby the use of a separate depoisoning reactor is eliminated.
  • CEP consultant Lewis Magnabosco’s models and their derivatives to determine initial operating reactor inlet temperatures, and adjustments to reactor inlet temperatures, necessary to achieve essential deactivation of all catalysts in a multiple reactor design, simultaneously. The methodology is applied to two or three catalytic hydrogenation reactors configured in-line, or in series, without the use of a sacrificial guard reactor.
  • A combination trade secret that includes some or all of the above stated trade secrets. In addition, as employed at Evergreen’s Newark rerefinery, some or all of the elements, sizing and proportions of the hydrogenating reactors, and the selection, placement and packing of catalysts.
  • The Evergreen and CEP list of leads and customers known to the Joshi Group.

Sequoia recently completed projects in the United States and United Kingdom, Joshi noted, stating it has designed a hydrotreater in the U.S. that produces oil with less than 100 ppm sulfur and a viscosity index greater than 115. “We certainly did not use the Evergreen trade secret mathematical model to design it,” he added. “In the U.K. project, we have implemented a vapor recompression method for dehydration of oil for the first time in the used oil recycling industry.

According to Joshi, Sequoia has an active R&D program and a healthy list of customers, including repeat customers. “I would say we are very optimistic about our future in the used oil recycling industry,” he said.

In June last year, Evergreen Oil announced plans to build a new base oil rerefining plant with 800 barrels per day of API Group II capacity in southern California’s Imperial Valley. Evergreen worked with CEP on the plant’s basic engineering design.

Evergreen’s existing Newark, Calif., plant has 800 b/d of API Group II capacity. The Newark facility uses hydrotreating to produce base oil from used engine oil.

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