Reference no: EM133256956

ChemTech is a chemical and materials laboratory that develops, manufactures and markets a variety of chemical compounds and materials. In early 2020, ChemTech developed a new type of bonding compound (in simple terms, a type of glue) that was extremely effective at bonding steel. The bonds this new compound create between pieces of steel exhibit a higher degree of tensile strength than any commercially available compound. ChemTech applied for and received a patent for the bonding compound in June 2020. ChemTech planned to sell the newly developed bonding material under the name 'Gel-Weld', which was registered as a trademark in January, 2021, two months before it went on sale. ChemTech required all employees involved in the development, production, and marketing of Gel-Weld to sign contracts containing confidentiality agreements under which they promised not to reveal details about the invention, commercialization or marketing of Gel-Weld to anyone outside the company. The contracts also contained non-compete agreements under which the employees promised that, if they left ChemTech, they would not accept employment at any company involved in the manufacturing or consumer goods industry anywhere in North America.
To ensure efficacy of the bond, the steel being bonded needed to have the bonding surface roughened with sand paper, to create more surface area for the bond to act upon. Additionally, in order to ensure safety of the user, the bond needed to be applied in a well-ventilated area to prevent buildup of potentially explosive fumes. ChemTech had its scientists and engineers develop documentation carefully explaining how to safely and effectively use the bonding material, and they eventually produced a six-page pamphlet that provided careful and clear instructions on the correct usage of Gel-Weld. On the exterior packaging, there was a prominent warning saying "Warning: To Avoid Risk of Injury or Death, Read the Enclosed Efficacy and Safety Material Carefully Before Using Product". Clearly visible under the transparent plastic wrapping on the pail in which Gel-Weld was sold, was the six-page pamphlet.
Gel-Weld begins to degrade after 2 months unless stored at stable temperatures in low humidity. In 2021, ChemTech did not have sufficient climate-controlled storage space to keep all the Gel-Weld product they were manufacturing, though they intended to build extra storage in the near future. ChemTech entered into a contract with SteadyTemp for SteadyTemp to keep up to 200,000 liters of Gel-Weld in climate-controlled storage for six months, starting February 1, 2021, in return for $26,000.
As part of an initial marketing campaign for Gel-Weld, in March, 2021, ChemTech announced a contest, offering a $20,000 reward for whoever could produce the tallest sculpture made out of standard 30-centimeter steel rulers bonded using Gel-Weld. The contest would remain open until October 10, 2021. ChemTech also ran video advertisements showing a well-known female gymnast using Gel-Weld to attach a long steel bar to a steel frame. The gymnast who had attached the bar was then shown hanging by her arms from the bar, while speaking into the camera for thirty seconds about the benefits of Gel-Weld, at which point, the camera drew back, revealing two well-known professional wrestlers, also hanging by their arms from the same steel bar.