1006-00004 · Crestline Packaging Solutions LLC · Correspondence

cease-and-desist-letter-to-harlow.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

600 Superior Avenue, Suite 2200 Cleveland, Ohio 44114

Telephone: (216) 555-0100 Facsimile: (216) 555-0101 www.calderwoodharkness.com

Catherine Bloom Partner Direct Dial: (216) 555-0184

Email: cbloom@calderwoodharkness.com

January 18, 2024

VIA Sundial Data Systems AND EMAIL

Gerald W. Norris Chief Executive Officer Harlow Chemical Supply Inc. 1120 Commerce Boulevard Terre Haute, IN 47802

Re: Misappropriation of Trade Secrets and Breach of Toll Manufacturing Agreement — Demand to Cease and Desist; CPS-BC-1147 Formulation / "ShieldCoat Pro 900"

Dear Mr. Norris:

I. Introduction and Identification of Client

This firm represents Crestline Packaging Solutions LLC ("CPS" or "our client"), an Ohio limited liability company headquartered at 4800 Scioto Industrial Parkway, Columbus, Ohio 43228. We write to you in that capacity and on CPS's express authorization concerning matters of the utmost gravity involving the misappropriation of CPS's trade secrets and the systematic breach of contractual obligations owed by Harlow Chemical Supply Inc. ("Harlow") to CPS.

By way of background, CPS is a leading specialty chemicals and packaging manufacturer that develops, manufactures, and sells proprietary high-performance barrier coatings, laminates, and packaging substrates serving the food, pharmaceutical, and industrial packaging industries. CPS's operations are substantial: its annual coatings production is approximately 38 million pounds, and its total revenues for fiscal year 2023 were approximately $214.7 million. CPS has built its market position over decades through significant investment in research and development, the cultivation of deep customer relationships, and the careful protection of its proprietary formulations and manufacturing processes.

Among CPS's most commercially valuable assets is its proprietary formulation designated CPS-BC-1147 — a water-based, high-performance barrier coating engineered for food-grade paperboard packaging substrates. CPS-BC-1147 provides exceptional moisture-vapor, grease, and oxygen barrier properties, and its performance characteristics are recognized throughout the food packaging industry as best-in-class. CPS invested approximately $3.8 million in research and development expenditures over a roughly twenty-four-month development period, from January 2015 through December 2016, to bring CPS-BC-1147 from initial concept through formulation optimization to commercial readiness. The formulation comprises fourteen distinct chemical constituents in precisely calibrated ratios, together with a defined order-of-addition protocol and specific processing temperatures and shear rates — the totality of which represents years of iterative laboratory work, pilot-scale testing, and commercial validation.

CPS-BC-1147 accounts for a significant and material portion of CPS's overall revenue. In fiscal year 2023, sales of CPS-BC-1147 and products incorporating the CPS-BC-1147 formulation represented approximately 22% of CPS's total coatings revenue — approximately $47.23 million. The formulation is, accordingly, one of the most commercially important trade secrets in CPS's portfolio, and CPS has at all times treated it as such by implementing rigorous measures to maintain its secrecy, as described further below.

This letter sets forth the factual and legal bases for CPS's claims against Harlow and states CPS's demands. We urge you and Harlow's counsel to give this letter the most careful attention.

II. The Toll Manufacturing Agreement

On March 15, 2017, CPS and Harlow entered into a Toll Manufacturing Agreement (the "TMA") pursuant to which Harlow was engaged to serve as a toll blender and packager for CPS-BC-1147 at Harlow's manufacturing facility in Terre Haute, Indiana. The purpose of the arrangement was to supplement CPS's existing production capacity at its Columbus, Ohio facility in order to meet growing customer demand for CPS-BC-1147. Under the TMA, Harlow was to blend, package, label, and ship finished CPS-BC-1147 product in accordance with CPS's specifications and quality standards, and solely at CPS's direction.

Critically, the TMA was structured around a partial disclosure framework designed specifically to protect the secrecy of the complete CPS-BC-1147 formulation. Under this framework, CPS provided Harlow with a Partial Formulation Disclosure covering only nine of the fourteen distinct chemical constituents of CPS-BC-1147, along with general proportional ranges for those nine components. The remaining five proprietary additive components — which are essential to CPS-BC-1147's differentiated performance characteristics — were never disclosed to Harlow in any form. Instead, CPS supplied those five components to Harlow as a single, pre-blended concentrate designated "CPS Concentrate A," which was manufactured and blended at CPS's Columbus facility and shipped to Harlow's Terre Haute plant for incorporation into the toll-manufactured product. Harlow was provided with no information whatsoever regarding the identity, composition, proportions, or sourcing of the constituents of CPS Concentrate A.

This partial disclosure framework was a deliberate and fundamental element of CPS's trade secret protection strategy. It ensured that no single party outside of CPS — including Harlow — possessed sufficient information to independently replicate the full CPS-BC-1147 formulation.

Under the TMA, Harlow earned a tolling fee of $0.38 per pound of CPS-BC-1147 processed. The relationship was commercially significant for Harlow: in calendar year 2022 alone, Harlow processed approximately 9.4 million pounds of CPS-BC-1147 for CPS, generating tolling fee revenues to Harlow of approximately $3,572,000. Over the life of the TMA, from 2017 through termination, Harlow earned millions of dollars in tolling fees from the relationship.

CPS terminated the TMA effective January 31, 2023, after bringing additional in-house production capacity online at its Columbus facility. The termination was carried out in accordance with the terms of the TMA and was communicated to Harlow in writing with appropriate advance notice.

III. Contractual Protections and Obligations

The TMA contained several provisions specifically designed to protect CPS's proprietary information and competitive position, both during the term of the agreement and following its termination. Harlow negotiated, agreed to, and was bound by each of these provisions, which include the following:

Section 7 — Confidentiality and Non-Disclosure. Section 7 of the TMA imposed upon Harlow a comprehensive obligation to maintain the confidentiality of all CPS proprietary and confidential information received or generated in connection with the tolling relationship. This obligation extends to, among other things, all formulation data (including the Partial Formulation Disclosure), batch production records, analytical test results, process parameter logs, quality control data, customer information, pricing information, and any other information designated as confidential by CPS or that Harlow knew or should have known was proprietary to CPS. Section 7 further required Harlow to use such confidential information solely for the purpose of performing its obligations under the TMA and for no other purpose whatsoever.

Section 8.2 — Prohibition on Reverse Engineering. Section 8.2 of the TMA contained an express and unambiguous prohibition against Harlow analyzing, deconstructing, reverse-engineering, or otherwise attempting to determine the composition, formulation, or makeup of CPS Concentrate A or any other proprietary CPS materials provided to Harlow under the TMA. This provision was included precisely because CPS recognized that Harlow, as a chemical supply company with laboratory and analytical capabilities, would have the technical ability to attempt to reverse-engineer CPS Concentrate A if not expressly prohibited from doing so.

Section 9.1 — Non-Compete Covenant. Under Section 9.1 of the TMA, Harlow covenanted and agreed that, for a period of three (3) years following termination or expiration of the TMA, Harlow would not, directly or indirectly, manufacture, produce, blend, formulate, sell, distribute, market, or otherwise commercially exploit any barrier coating product that is "substantially similar" to CPS-BC-1147 in formulation, composition, or performance characteristics. Given the January 31, 2023 effective date of termination, this non-compete covenant remains in full force and effect through January 31, 2026.

Section 9.3 — Customer Non-Solicitation. Section 9.3 of the TMA further required Harlow to refrain from soliciting, contacting, or diverting, directly or indirectly, any customer of CPS for the purpose of selling or offering to sell any barrier coating product, for a period coextensive with the non-compete period set forth in Section 9.1.

Each of the foregoing provisions was expressly stated to survive the termination or expiration of the TMA, and each remains in full force and effect as of the date of this letter. Harlow's obligations under these provisions are clear, unambiguous, and enforceable, and Harlow cannot credibly claim ignorance or misunderstanding of their terms.

IV. Harlow's Wrongful Conduct — Reverse Engineering and Misappropriation

CPS has become aware that, in or about April 2023 — approximately three months after termination of the TMA — Harlow commenced the manufacture, marketing, and sale of a barrier coating product under the brand name "ShieldCoat Pro 900," targeting the food packaging industry. The timing of this product launch, following so closely upon the termination of the TMA, was itself suspicious and prompted CPS to investigate further.

CPS obtained commercial samples of ShieldCoat Pro 900 and submitted them for comprehensive compositional analysis to an independent, third-party forensic analytical laboratory with expertise in polymer and coating chemistry. The results of that forensic analysis are unequivocal and deeply troubling. The analysis reveals that ShieldCoat Pro 900's composition matches CPS-BC-1147 in all fourteen chemical constituents — including the five proprietary additive components that were contained exclusively in CPS Concentrate A and were never disclosed to Harlow — within a tolerance of ±0.3% by weight.

To be clear about the significance of this finding: a compositional match across all fourteen constituents within ±0.3% by weight is not achievable through independent research and development. The CPS-BC-1147 formulation is the product of years of iterative experimentation, and the specific combination and precise ratios of its fourteen constituents reflect countless optimization decisions that cannot be replicated by chance or by independent parallel development. The degree of similarity between ShieldCoat Pro 900 and CPS-BC-1147 is consistent only with direct access to the complete CPS-BC-1147 formulation — access that Harlow did not have through legitimate means and could only have obtained through reverse engineering of CPS Concentrate A or unauthorized retention and use of CPS's proprietary data, or both.

CPS has substantial reason to believe — and upon information and belief alleges — that during the tolling period, Harlow, acting through its Vice President of Technical Operations, Kenneth Fielding, retained batch production records, analytical test results, and process parameter logs well beyond the scope permitted by the TMA and in contravention of Harlow's obligations under Section 7. These records would have provided Harlow with a substantial portion of the technical information necessary to approximate the CPS-BC-1147 formulation, even without full knowledge of the composition of CPS Concentrate A.

Furthermore, and most egregiously, CPS has information and belief — supported by evidence obtained in the course of CPS's investigation — that in or about September 2022, approximately five months before the TMA was terminated, Harlow sent a sample of CPS Concentrate A to an outside analytical laboratory, Archer Material Sciences Inc., located in Indianapolis, Indiana, for the express purpose of conducting a compositional analysis to determine the identity and proportions of the constituents of CPS Concentrate A. This conduct was undertaken in direct, deliberate, and knowing violation of Section 8.2 of the TMA, which expressly prohibited Harlow from analyzing, deconstructing, reverse-engineering, or otherwise attempting to determine the composition of CPS Concentrate A. The fact that this reverse-engineering activity was initiated while the TMA was still in effect — and while Harlow was continuing to earn millions of dollars in tolling fees from CPS — makes Harlow's conduct all the more brazen and reprehensible.

CPS characterizes Harlow's conduct as deliberate, willful, and malicious misappropriation of CPS's trade secrets and a calculated breach of Harlow's contractual obligations. The evidence demonstrates that Harlow — far from acting as a faithful toll manufacturer — used its position of trust and access to systematically steal CPS's most valuable proprietary formulation, and did so with the premeditated intent of launching a competing product the moment the TMA was terminated. This was not a mistake, an oversight, or a good-faith dispute over contract interpretation. It was theft.

V. Harlow's Wrongful Conduct — Customer Solicitation

Harlow's misconduct has not been limited to the misappropriation of CPS's trade secrets and the manufacture of a competing product. CPS has confirmed that Harlow has also engaged in a systematic campaign to solicit CPS's customers in direct violation of the customer non-solicitation covenant set forth in Section 9.3 of the TMA.

Specifically, CPS has confirmed that Harlow's Sales Director, Amanda Trent, has directly and personally solicited multiple CPS customers, offering ShieldCoat Pro 900 as a substitute for CPS-BC-1147 at a discount of approximately 15% below CPS's pricing. This pricing strategy is plainly designed to exploit the misappropriated trade secret by undercutting CPS on price — a strategy made possible only because Harlow did not bear the $3.8 million in research and development costs that CPS invested to create the formulation in the first place.

On or about June 12, 2023, CPS's Sales Director, Brian Novotny, was informed by representatives of Mapleridge Paper Corp. — a longstanding and valued CPS customer — that Amanda Trent had approached Mapleridge with an offer to supply ShieldCoat Pro 900 at a 15% discount to CPS's pricing for CPS-BC-1147. CPS's subsequent investigation has confirmed that at least four additional CPS customers have been contacted by Harlow with similar solicitations: Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC. CPS believes that additional customers may have been contacted as well, and its investigation is ongoing.

This solicitation activity constitutes a direct and flagrant violation of Section 9.3 of the TMA. It has caused, and continues to cause, irreparable injury to CPS's customer relationships and competitive market position — relationships that CPS has cultivated over years and even decades of reliable service, consistent quality, and technical support. The harm to CPS's goodwill and customer loyalty cannot be fully compensated by monetary damages alone.

VI. Legal Claims — Trade Secret Misappropriation

CPS-BC-1147, including its complete fourteen-constituent formulation, proprietary ratios, order-of-addition protocol, and defined processing temperatures and shear rates, constitutes a trade secret under both federal and state law. The formulation derives independent economic value, both actual and potential, from not being generally known to, and not being readily ascertainable through proper means by, other persons who can obtain economic value from its disclosure or use. CPS has taken extensive and reasonable measures to maintain its secrecy, as described herein.

Federal Law — The Defend Trade Secrets Act. The Defend Trade Secrets Act of 2016 ("DTSA"), 18 U.S.C. §§ 1836–1839, provides a federal civil cause of action for the misappropriation of trade secrets related to a product or service used in, or intended for use in, interstate commerce. The DTSA authorizes courts to grant injunctive relief to prevent any actual or threatened misappropriation, to award compensatory damages for actual loss caused by the misappropriation and for unjust enrichment not addressed by actual loss, and — in cases of willful and malicious misappropriation — to award exemplary damages in an amount not exceeding two times the amount of compensatory damages, together with reasonable attorneys' fees. 18 U.S.C. § 1836(b)(3).

State Law — The Ohio Uniform Trade Secrets Act. The Ohio Uniform Trade Secrets Act ("Ohio UTSA"), Ohio Rev. Code §§ 1333.61–1333.69, similarly provides for injunctive relief to prevent actual or threatened misappropriation, compensatory damages (including damages measured by unjust enrichment not captured by actual loss), exemplary damages not exceeding two times the compensatory damages award in cases of willful and malicious misappropriation, and attorneys' fees in cases where willful and malicious misappropriation exists or a claim of misappropriation is made in bad faith. Ohio Rev. Code §§ 1333.62–1333.64.

CPS took extensive reasonable measures to maintain the secrecy of CPS-BC-1147, including but not limited to the following: (a) the partial disclosure framework under the TMA, pursuant to which only nine of fourteen constituents were disclosed to Harlow; (b) the supply of the remaining five proprietary additive components exclusively in pre-blended form as CPS Concentrate A, thereby preventing any toll manufacturer from learning the identities or proportions of those components through the ordinary course of manufacturing; (c) the contractual protections set forth in the TMA, including the confidentiality, reverse-engineering prohibition, non-compete, and non-solicitation provisions described in Section III above; (d) restricted internal access protocols at CPS, limiting knowledge of the complete CPS-BC-1147 formulation to a small number of authorized CPS personnel on a need-to-know basis; (e) physical and electronic security measures at CPS's Columbus facility, including restricted-access laboratories, secured electronic document management systems, and employee confidentiality agreements; and (f) marking and labeling of all CPS-BC-1147 formulation documents as "Confidential — Proprietary."

Harlow's reverse engineering of CPS Concentrate A, unauthorized retention and use of CPS's proprietary production data, manufacture and commercial sale of ShieldCoat Pro 900, and solicitation of CPS's customers using the misappropriated formulation constitute misappropriation of CPS's trade secrets under both the DTSA and the Ohio UTSA. CPS's evidence establishes that Harlow acquired the trade secret by improper means, including breach of a duty to maintain the secrecy of the trade secret, breach of a duty to limit use of the trade secret, and reverse engineering in violation of a contractual prohibition — and that Harlow used and disclosed the trade secret without CPS's consent. The misappropriation was willful and malicious, warranting the imposition of exemplary damages and attorneys' fees.

VII. Legal Claims — Breach of Contract and Other Claims

In addition to its trade secret misappropriation claims, CPS has strong claims against Harlow for breach of contract. Harlow's conduct as described in this letter constitutes material breach of the following provisions of the TMA:

• Section 7 (Confidentiality / Non-Disclosure): Harlow breached its confidentiality obligations by retaining and using CPS's proprietary formulation data, batch production records, analytical test results, and process parameter logs after termination of the TMA and for purposes other than performing under the TMA.

• Section 8.2 (Prohibition on Reverse Engineering): Harlow breached its express obligation not to analyze, deconstruct, reverse-engineer, or otherwise attempt to determine the composition of CPS Concentrate A by sending CPS Concentrate A to Archer Material Sciences Inc. for compositional analysis.

• Section 9.1 (Non-Compete): Harlow breached its non-compete covenant by manufacturing, marketing, and selling ShieldCoat Pro 900, a barrier coating product that is not merely "substantially similar" to CPS-BC-1147 but is, for all practical purposes, identical to it.

• Section 9.3 (Customer Non-Solicitation): Harlow breached its customer non-solicitation covenant by directing its Sales Director, Amanda Trent, to solicit CPS customers, including Mapleridge Paper Corp., Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC.

CPS also reserves all claims for tortious interference with business relationships arising from Harlow's deliberate and improper interference with CPS's existing and prospective customer relationships, as well as all claims for unjust enrichment arising from Harlow's wrongful profiting from the manufacture and sale of a product derived from CPS's misappropriated trade secret.

CPS further places you on notice that Gerald W. Norris, as Chief Executive Officer and sole shareholder of Harlow, and Kenneth Fielding, as Vice President of Technical Operations who directed and personally participated in the reverse engineering of CPS Concentrate A and the unauthorized retention of CPS's proprietary data, may be held individually liable for their respective roles in the misappropriation and breach of contractual and legal duties. Individual liability may be predicated on, among other theories, personal participation in tortious conduct, the DTSA, and piercing of the corporate veil, as the facts and circumstances may warrant.

VIII. Demands

In light of the foregoing, CPS, through this firm, makes the following demands:

1. Immediate Cessation. Harlow must immediately cease and desist from all manufacture, production, blending, formulation, marketing, sale, distribution, offering for sale, and any other commercial exploitation of ShieldCoat Pro 900 or any other product derived from, based upon, or incorporating, in whole or in part, CPS-BC-1147, CPS Concentrate A, or any other CPS confidential or proprietary information. This demand includes, without limitation, the immediate cessation of all solicitation of customers for the purpose of selling or offering to sell any such product, and the immediate withdrawal of all marketing materials, product literature, sample kits, price sheets, and other promotional materials relating to ShieldCoat Pro 900.

2. Return and Destruction of Confidential Information. Harlow must immediately return to CPS all CPS confidential information in Harlow's possession, custody, or control — including but not limited to the CPS-BC-1147 Partial Formulation Disclosure, CPS Concentrate A analytical data (including without limitation any and all reports, data, chromatograms, spectra, or other analytical results obtained from or generated by Archer Material Sciences Inc. or any other third-party laboratory), batch production records, analytical test results, process parameter logs, quality control data, customer lists and contact information, and all copies, summaries, notes, extracts, compilations, or derivatives thereof, in whatever form or medium. With respect to any copies or derivatives that cannot be physically returned (including electronically stored information), Harlow must certify in writing, under oath, signed by Gerald W. Norris in his capacity as Chief Executive Officer, the complete and permanent destruction of all such materials, with a detailed description of the materials destroyed and the manner and date of destruction.

3. Full Accounting. Harlow must provide CPS with a complete and accurate accounting of all ShieldCoat Pro 900 sales from the inception of the product through the date of Harlow's response, including without limitation: (a) the identity of all customers to whom ShieldCoat Pro 900 has been sold, offered for sale, or provided as samples; (b) the volumes (in pounds) sold or shipped to each such customer; (c) the pricing and payment terms applicable to each such sale; (d) the total revenues received by Harlow from all such sales; and (e) the total profits earned by Harlow from all such sales, calculated on a product-line basis with supporting documentation.

Harlow must comply fully with each of the foregoing demands within ten (10) business days of its receipt of this letter.

IX. Preservation of Evidence

CPS further demands that Harlow immediately take all steps necessary to identify, locate, and preserve all documents and electronically stored information ("ESI") in Harlow's possession, custody, or control that relate in any way to ShieldCoat Pro 900, CPS-BC-1147, CPS Concentrate A, Archer Material Sciences Inc., or any communications with CPS's customers (including but not limited to Mapleridge Paper Corp., Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC). The materials to be preserved include, without limitation, all emails, text messages, instant messages, voicemails, memoranda, letters, laboratory notebooks, formulation records, batch records, production records, financial records (including invoices, purchase orders, and accounts receivable records), marketing materials, sales reports, customer correspondence, and all associated metadata.

Harlow must immediately implement a litigation hold to prevent the routine or intentional destruction, alteration, deletion, overwriting, or concealment of any such documents or ESI. This obligation extends to all backup tapes, servers, cloud storage accounts, personal devices, and any other media on which relevant information may be stored.

CPS places Harlow on explicit notice that any destruction, alteration, spoliation, or concealment of evidence — whether intentional or resulting from a failure to implement adequate preservation measures — will give rise to additional legal claims, including claims for spoliation of evidence, and will support requests for adverse inference instructions and other sanctions in any subsequent litigation.

X. Warning of Litigation

CPS sincerely hopes that this matter can be resolved without the necessity of litigation. However, CPS is fully prepared to protect its rights through every available legal avenue.

If Harlow fails to comply fully with each of the demands set forth in Section VIII above within ten (10) business days of receipt of this letter, CPS will immediately commence litigation against Harlow in the United States District Court, seeking, among other relief:

• Emergency injunctive relief, including a temporary restraining order and preliminary injunction, prohibiting Harlow from manufacturing, selling, marketing, or distributing ShieldCoat Pro 900 or any product derived from CPS's trade secrets, and prohibiting Harlow from soliciting or contacting CPS's customers;

• Compensatory damages for CPS's lost profits, price erosion, and other economic losses caused by Harlow's misappropriation and breach of contract;

• Disgorgement of all profits earned by Harlow from the manufacture and sale of ShieldCoat Pro 900;

• Exemplary damages for willful and malicious misappropriation under the Defend Trade Secrets Act, 18 U.S.C. § 1836(b)(3)(C), and the Ohio Uniform Trade Secrets Act, Ohio Rev. Code § 1333.63(B), in an amount up to two times the compensatory damages award;

• Reasonable attorneys' fees and costs of litigation under the DTSA and the Ohio UTSA; and

• Such other and further relief as the Court deems just and appropriate.

CPS will also seek relief against Gerald W. Norris, individually, in his capacity as Chief Executive Officer and sole shareholder of Harlow, and against Kenneth Fielding, individually, in his capacity as Vice President of Technical Operations, for their personal direction of and participation in the misappropriation and related wrongful conduct described herein.

XI. Reservation of Rights

This letter does not constitute an exhaustive recitation of CPS's claims, rights, defenses, or the facts and circumstances supporting them. CPS expressly reserves the right to present additional facts, legal theories, and claims as may be appropriate in any future proceedings or communications.

All rights and remedies available to CPS at law and in equity are expressly reserved, including without limitation the right to seek ex parte injunctive relief without further notice to Harlow should circumstances warrant. Nothing in this letter shall be construed as a waiver, release, or limitation of any of CPS's rights or remedies, and CPS's decision to make the demands set forth herein shall not be deemed an election of remedies or a condition precedent to the commencement of litigation.

We trust that Harlow will give this matter the immediate and serious attention it requires. Any response to this letter should be directed to the undersigned at the contact information set forth below.

Sincerely,

CALDERWOOD & HARKNESS LLP

By: ________

Catherine Bloom Partner

Direct Dial: (216) 555-0184

Email: cbloom@calderwoodharkness.com

cc: Rachel Sung, General Counsel, Crestline Packaging Solutions LLC cc: Alan Ngo, Calderwood & Harkness LLP

CALDERWOOD & HARKNESS LLP Attorneys at Law
600 Superior Avenue, Suite 2200 Cleveland, Ohio 44114
Telephone: (216) 555-0100 Facsimile: (216) 555-0101 www.calderwoodharkness.com
Catherine Bloom Partner Direct Dial: (216) 555-0184
Email: cbloom@calderwoodharkness.com
January 18, 2024
VIA Sundial Data Systems AND EMAIL
Gerald W. Norris Chief Executive Officer Harlow Chemical Supply Inc. 1120 Commerce Boulevard Terre Haute, IN 47802
Re: Misappropriation of Trade Secrets and Breach of Toll Manufacturing Agreement — Demand to Cease and Desist; CPS-BC-1147 Formulation / "ShieldCoat Pro 900"
Dear Mr. Norris:
I. Introduction and Identification of Client
This firm represents Crestline Packaging Solutions LLC ("CPS" or "our client"), an Ohio limited liability company headquartered at 4800 Scioto Industrial Parkway, Columbus, Ohio 43228. We write to you in that capacity and on CPS's express authorization concerning matters of the utmost gravity involving the misappropriation of CPS's trade secrets and the systematic breach of contractual obligations owed by Harlow Chemical Supply Inc. ("Harlow") to CPS.
By way of background, CPS is a leading specialty chemicals and packaging manufacturer that develops, manufactures, and sells proprietary high-performance barrier coatings, laminates, and packaging substrates serving the food, pharmaceutical, and industrial packaging industries. CPS's operations are substantial: its annual coatings production is approximately 38 million pounds, and its total revenues for fiscal year 2023 were approximately $214.7 million. CPS has built its market position over decades through significant investment in research and development, the cultivation of deep customer relationships, and the careful protection of its proprietary formulations and manufacturing processes.
Among CPS's most commercially valuable assets is its proprietary formulation designated CPS-BC-1147 — a water-based, high-performance barrier coating engineered for food-grade paperboard packaging substrates. CPS-BC-1147 provides exceptional moisture-vapor, grease, and oxygen barrier properties, and its performance characteristics are recognized throughout the food packaging industry as best-in-class. CPS invested approximately $3.8 million in research and development expenditures over a roughly twenty-four-month development period, from January 2015 through December 2016, to bring CPS-BC-1147 from initial concept through formulation optimization to commercial readiness. The formulation comprises fourteen distinct chemical constituents in precisely calibrated ratios, together with a defined order-of-addition protocol and specific processing temperatures and shear rates — the totality of which represents years of iterative laboratory work, pilot-scale testing, and commercial validation.
CPS-BC-1147 accounts for a significant and material portion of CPS's overall revenue. In fiscal year 2023, sales of CPS-BC-1147 and products incorporating the CPS-BC-1147 formulation represented approximately 22% of CPS's total coatings revenue — approximately $47.23 million. The formulation is, accordingly, one of the most commercially important trade secrets in CPS's portfolio, and CPS has at all times treated it as such by implementing rigorous measures to maintain its secrecy, as described further below.
This letter sets forth the factual and legal bases for CPS's claims against Harlow and states CPS's demands. We urge you and Harlow's counsel to give this letter the most careful attention.
II. The Toll Manufacturing Agreement
On March 15, 2017, CPS and Harlow entered into a Toll Manufacturing Agreement (the "TMA") pursuant to which Harlow was engaged to serve as a toll blender and packager for CPS-BC-1147 at Harlow's manufacturing facility in Terre Haute, Indiana. The purpose of the arrangement was to supplement CPS's existing production capacity at its Columbus, Ohio facility in order to meet growing customer demand for CPS-BC-1147. Under the TMA, Harlow was to blend, package, label, and ship finished CPS-BC-1147 product in accordance with CPS's specifications and quality standards, and solely at CPS's direction.
Critically, the TMA was structured around a partial disclosure framework designed specifically to protect the secrecy of the complete CPS-BC-1147 formulation. Under this framework, CPS provided Harlow with a Partial Formulation Disclosure covering only nine of the fourteen distinct chemical constituents of CPS-BC-1147, along with general proportional ranges for those nine components. The remaining five proprietary additive components — which are essential to CPS-BC-1147's differentiated performance characteristics — were never disclosed to Harlow in any form. Instead, CPS supplied those five components to Harlow as a single, pre-blended concentrate designated "CPS Concentrate A," which was manufactured and blended at CPS's Columbus facility and shipped to Harlow's Terre Haute plant for incorporation into the toll-manufactured product. Harlow was provided with no information whatsoever regarding the identity, composition, proportions, or sourcing of the constituents of CPS Concentrate A.
This partial disclosure framework was a deliberate and fundamental element of CPS's trade secret protection strategy. It ensured that no single party outside of CPS — including Harlow — possessed sufficient information to independently replicate the full CPS-BC-1147 formulation.
Under the TMA, Harlow earned a tolling fee of $0.38 per pound of CPS-BC-1147 processed. The relationship was commercially significant for Harlow: in calendar year 2022 alone, Harlow processed approximately 9.4 million pounds of CPS-BC-1147 for CPS, generating tolling fee revenues to Harlow of approximately $3,572,000. Over the life of the TMA, from 2017 through termination, Harlow earned millions of dollars in tolling fees from the relationship.
CPS terminated the TMA effective January 31, 2023, after bringing additional in-house production capacity online at its Columbus facility. The termination was carried out in accordance with the terms of the TMA and was communicated to Harlow in writing with appropriate advance notice.
III. Contractual Protections and Obligations
The TMA contained several provisions specifically designed to protect CPS's proprietary information and competitive position, both during the term of the agreement and following its termination. Harlow negotiated, agreed to, and was bound by each of these provisions, which include the following:
Section 7 — Confidentiality and Non-Disclosure. Section 7 of the TMA imposed upon Harlow a comprehensive obligation to maintain the confidentiality of all CPS proprietary and confidential information received or generated in connection with the tolling relationship. This obligation extends to, among other things, all formulation data (including the Partial Formulation Disclosure), batch production records, analytical test results, process parameter logs, quality control data, customer information, pricing information, and any other information designated as confidential by CPS or that Harlow knew or should have known was proprietary to CPS. Section 7 further required Harlow to use such confidential information solely for the purpose of performing its obligations under the TMA and for no other purpose whatsoever.
Section 8.2 — Prohibition on Reverse Engineering. Section 8.2 of the TMA contained an express and unambiguous prohibition against Harlow analyzing, deconstructing, reverse-engineering, or otherwise attempting to determine the composition, formulation, or makeup of CPS Concentrate A or any other proprietary CPS materials provided to Harlow under the TMA. This provision was included precisely because CPS recognized that Harlow, as a chemical supply company with laboratory and analytical capabilities, would have the technical ability to attempt to reverse-engineer CPS Concentrate A if not expressly prohibited from doing so.
Section 9.1 — Non-Compete Covenant. Under Section 9.1 of the TMA, Harlow covenanted and agreed that, for a period of three (3) years following termination or expiration of the TMA, Harlow would not, directly or indirectly, manufacture, produce, blend, formulate, sell, distribute, market, or otherwise commercially exploit any barrier coating product that is "substantially similar" to CPS-BC-1147 in formulation, composition, or performance characteristics. Given the January 31, 2023 effective date of termination, this non-compete covenant remains in full force and effect through January 31, 2026.
Section 9.3 — Customer Non-Solicitation. Section 9.3 of the TMA further required Harlow to refrain from soliciting, contacting, or diverting, directly or indirectly, any customer of CPS for the purpose of selling or offering to sell any barrier coating product, for a period coextensive with the non-compete period set forth in Section 9.1.
Each of the foregoing provisions was expressly stated to survive the termination or expiration of the TMA, and each remains in full force and effect as of the date of this letter. Harlow's obligations under these provisions are clear, unambiguous, and enforceable, and Harlow cannot credibly claim ignorance or misunderstanding of their terms.
IV. Harlow's Wrongful Conduct — Reverse Engineering and Misappropriation
CPS has become aware that, in or about April 2023 — approximately three months after termination of the TMA — Harlow commenced the manufacture, marketing, and sale of a barrier coating product under the brand name "ShieldCoat Pro 900," targeting the food packaging industry. The timing of this product launch, following so closely upon the termination of the TMA, was itself suspicious and prompted CPS to investigate further.
CPS obtained commercial samples of ShieldCoat Pro 900 and submitted them for comprehensive compositional analysis to an independent, third-party forensic analytical laboratory with expertise in polymer and coating chemistry. The results of that forensic analysis are unequivocal and deeply troubling. The analysis reveals that ShieldCoat Pro 900's composition matches CPS-BC-1147 in all fourteen chemical constituents — including the five proprietary additive components that were contained exclusively in CPS Concentrate A and were never disclosed to Harlow — within a tolerance of ±0.3% by weight.
To be clear about the significance of this finding: a compositional match across all fourteen constituents within ±0.3% by weight is not achievable through independent research and development. The CPS-BC-1147 formulation is the product of years of iterative experimentation, and the specific combination and precise ratios of its fourteen constituents reflect countless optimization decisions that cannot be replicated by chance or by independent parallel development. The degree of similarity between ShieldCoat Pro 900 and CPS-BC-1147 is consistent only with direct access to the complete CPS-BC-1147 formulation — access that Harlow did not have through legitimate means and could only have obtained through reverse engineering of CPS Concentrate A or unauthorized retention and use of CPS's proprietary data, or both.
CPS has substantial reason to believe — and upon information and belief alleges — that during the tolling period, Harlow, acting through its Vice President of Technical Operations, Kenneth Fielding, retained batch production records, analytical test results, and process parameter logs well beyond the scope permitted by the TMA and in contravention of Harlow's obligations under Section 7. These records would have provided Harlow with a substantial portion of the technical information necessary to approximate the CPS-BC-1147 formulation, even without full knowledge of the composition of CPS Concentrate A.
Furthermore, and most egregiously, CPS has information and belief — supported by evidence obtained in the course of CPS's investigation — that in or about September 2022, approximately five months before the TMA was terminated, Harlow sent a sample of CPS Concentrate A to an outside analytical laboratory, Archer Material Sciences Inc., located in Indianapolis, Indiana, for the express purpose of conducting a compositional analysis to determine the identity and proportions of the constituents of CPS Concentrate A. This conduct was undertaken in direct, deliberate, and knowing violation of Section 8.2 of the TMA, which expressly prohibited Harlow from analyzing, deconstructing, reverse-engineering, or otherwise attempting to determine the composition of CPS Concentrate A. The fact that this reverse-engineering activity was initiated while the TMA was still in effect — and while Harlow was continuing to earn millions of dollars in tolling fees from CPS — makes Harlow's conduct all the more brazen and reprehensible.
CPS characterizes Harlow's conduct as deliberate, willful, and malicious misappropriation of CPS's trade secrets and a calculated breach of Harlow's contractual obligations. The evidence demonstrates that Harlow — far from acting as a faithful toll manufacturer — used its position of trust and access to systematically steal CPS's most valuable proprietary formulation, and did so with the premeditated intent of launching a competing product the moment the TMA was terminated. This was not a mistake, an oversight, or a good-faith dispute over contract interpretation. It was theft.
V. Harlow's Wrongful Conduct — Customer Solicitation
Harlow's misconduct has not been limited to the misappropriation of CPS's trade secrets and the manufacture of a competing product. CPS has confirmed that Harlow has also engaged in a systematic campaign to solicit CPS's customers in direct violation of the customer non-solicitation covenant set forth in Section 9.3 of the TMA.
Specifically, CPS has confirmed that Harlow's Sales Director, Amanda Trent, has directly and personally solicited multiple CPS customers, offering ShieldCoat Pro 900 as a substitute for CPS-BC-1147 at a discount of approximately 15% below CPS's pricing. This pricing strategy is plainly designed to exploit the misappropriated trade secret by undercutting CPS on price — a strategy made possible only because Harlow did not bear the $3.8 million in research and development costs that CPS invested to create the formulation in the first place.
On or about June 12, 2023, CPS's Sales Director, Brian Novotny, was informed by representatives of Mapleridge Paper Corp. — a longstanding and valued CPS customer — that Amanda Trent had approached Mapleridge with an offer to supply ShieldCoat Pro 900 at a 15% discount to CPS's pricing for CPS-BC-1147. CPS's subsequent investigation has confirmed that at least four additional CPS customers have been contacted by Harlow with similar solicitations: Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC. CPS believes that additional customers may have been contacted as well, and its investigation is ongoing.
This solicitation activity constitutes a direct and flagrant violation of Section 9.3 of the TMA. It has caused, and continues to cause, irreparable injury to CPS's customer relationships and competitive market position — relationships that CPS has cultivated over years and even decades of reliable service, consistent quality, and technical support. The harm to CPS's goodwill and customer loyalty cannot be fully compensated by monetary damages alone.
VI. Legal Claims — Trade Secret Misappropriation
CPS-BC-1147, including its complete fourteen-constituent formulation, proprietary ratios, order-of-addition protocol, and defined processing temperatures and shear rates, constitutes a trade secret under both federal and state law. The formulation derives independent economic value, both actual and potential, from not being generally known to, and not being readily ascertainable through proper means by, other persons who can obtain economic value from its disclosure or use. CPS has taken extensive and reasonable measures to maintain its secrecy, as described herein.
Federal Law — The Defend Trade Secrets Act. The Defend Trade Secrets Act of 2016 ("DTSA"), 18 U.S.C. §§ 1836–1839, provides a federal civil cause of action for the misappropriation of trade secrets related to a product or service used in, or intended for use in, interstate commerce. The DTSA authorizes courts to grant injunctive relief to prevent any actual or threatened misappropriation, to award compensatory damages for actual loss caused by the misappropriation and for unjust enrichment not addressed by actual loss, and — in cases of willful and malicious misappropriation — to award exemplary damages in an amount not exceeding two times the amount of compensatory damages, together with reasonable attorneys' fees. 18 U.S.C. § 1836(b)(3).
State Law — The Ohio Uniform Trade Secrets Act. The Ohio Uniform Trade Secrets Act ("Ohio UTSA"), Ohio Rev. Code §§ 1333.61–1333.69, similarly provides for injunctive relief to prevent actual or threatened misappropriation, compensatory damages (including damages measured by unjust enrichment not captured by actual loss), exemplary damages not exceeding two times the compensatory damages award in cases of willful and malicious misappropriation, and attorneys' fees in cases where willful and malicious misappropriation exists or a claim of misappropriation is made in bad faith. Ohio Rev. Code §§ 1333.62–1333.64.
CPS took extensive reasonable measures to maintain the secrecy of CPS-BC-1147, including but not limited to the following: (a) the partial disclosure framework under the TMA, pursuant to which only nine of fourteen constituents were disclosed to Harlow; (b) the supply of the remaining five proprietary additive components exclusively in pre-blended form as CPS Concentrate A, thereby preventing any toll manufacturer from learning the identities or proportions of those components through the ordinary course of manufacturing; (c) the contractual protections set forth in the TMA, including the confidentiality, reverse-engineering prohibition, non-compete, and non-solicitation provisions described in Section III above; (d) restricted internal access protocols at CPS, limiting knowledge of the complete CPS-BC-1147 formulation to a small number of authorized CPS personnel on a need-to-know basis; (e) physical and electronic security measures at CPS's Columbus facility, including restricted-access laboratories, secured electronic document management systems, and employee confidentiality agreements; and (f) marking and labeling of all CPS-BC-1147 formulation documents as "Confidential — Proprietary."
Harlow's reverse engineering of CPS Concentrate A, unauthorized retention and use of CPS's proprietary production data, manufacture and commercial sale of ShieldCoat Pro 900, and solicitation of CPS's customers using the misappropriated formulation constitute misappropriation of CPS's trade secrets under both the DTSA and the Ohio UTSA. CPS's evidence establishes that Harlow acquired the trade secret by improper means, including breach of a duty to maintain the secrecy of the trade secret, breach of a duty to limit use of the trade secret, and reverse engineering in violation of a contractual prohibition — and that Harlow used and disclosed the trade secret without CPS's consent. The misappropriation was willful and malicious, warranting the imposition of exemplary damages and attorneys' fees.
VII. Legal Claims — Breach of Contract and Other Claims
In addition to its trade secret misappropriation claims, CPS has strong claims against Harlow for breach of contract. Harlow's conduct as described in this letter constitutes material breach of the following provisions of the TMA:
•  Section 7 (Confidentiality / Non-Disclosure): Harlow breached its confidentiality obligations by retaining and using CPS's proprietary formulation data, batch production records, analytical test results, and process parameter logs after termination of the TMA and for purposes other than performing under the TMA.
•  Section 8.2 (Prohibition on Reverse Engineering): Harlow breached its express obligation not to analyze, deconstruct, reverse-engineer, or otherwise attempt to determine the composition of CPS Concentrate A by sending CPS Concentrate A to Archer Material Sciences Inc. for compositional analysis.
•  Section 9.1 (Non-Compete): Harlow breached its non-compete covenant by manufacturing, marketing, and selling ShieldCoat Pro 900, a barrier coating product that is not merely "substantially similar" to CPS-BC-1147 but is, for all practical purposes, identical to it.
•  Section 9.3 (Customer Non-Solicitation): Harlow breached its customer non-solicitation covenant by directing its Sales Director, Amanda Trent, to solicit CPS customers, including Mapleridge Paper Corp., Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC.
CPS also reserves all claims for tortious interference with business relationships arising from Harlow's deliberate and improper interference with CPS's existing and prospective customer relationships, as well as all claims for unjust enrichment arising from Harlow's wrongful profiting from the manufacture and sale of a product derived from CPS's misappropriated trade secret.
CPS further places you on notice that Gerald W. Norris, as Chief Executive Officer and sole shareholder of Harlow, and Kenneth Fielding, as Vice President of Technical Operations who directed and personally participated in the reverse engineering of CPS Concentrate A and the unauthorized retention of CPS's proprietary data, may be held individually liable for their respective roles in the misappropriation and breach of contractual and legal duties. Individual liability may be predicated on, among other theories, personal participation in tortious conduct, the DTSA, and piercing of the corporate veil, as the facts and circumstances may warrant.
VIII. Demands
In light of the foregoing, CPS, through this firm, makes the following demands:
1.  Immediate Cessation. Harlow must immediately cease and desist from all manufacture, production, blending, formulation, marketing, sale, distribution, offering for sale, and any other commercial exploitation of ShieldCoat Pro 900 or any other product derived from, based upon, or incorporating, in whole or in part, CPS-BC-1147, CPS Concentrate A, or any other CPS confidential or proprietary information. This demand includes, without limitation, the immediate cessation of all solicitation of customers for the purpose of selling or offering to sell any such product, and the immediate withdrawal of all marketing materials, product literature, sample kits, price sheets, and other promotional materials relating to ShieldCoat Pro 900.
2.  Return and Destruction of Confidential Information. Harlow must immediately return to CPS all CPS confidential information in Harlow's possession, custody, or control — including but not limited to the CPS-BC-1147 Partial Formulation Disclosure, CPS Concentrate A analytical data (including without limitation any and all reports, data, chromatograms, spectra, or other analytical results obtained from or generated by Archer Material Sciences Inc. or any other third-party laboratory), batch production records, analytical test results, process parameter logs, quality control data, customer lists and contact information, and all copies, summaries, notes, extracts, compilations, or derivatives thereof, in whatever form or medium. With respect to any copies or derivatives that cannot be physically returned (including electronically stored information), Harlow must certify in writing, under oath, signed by Gerald W. Norris in his capacity as Chief Executive Officer, the complete and permanent destruction of all such materials, with a detailed description of the materials destroyed and the manner and date of destruction.
3.  Full Accounting. Harlow must provide CPS with a complete and accurate accounting of all ShieldCoat Pro 900 sales from the inception of the product through the date of Harlow's response, including without limitation: (a) the identity of all customers to whom ShieldCoat Pro 900 has been sold, offered for sale, or provided as samples; (b) the volumes (in pounds) sold or shipped to each such customer; (c) the pricing and payment terms applicable to each such sale; (d) the total revenues received by Harlow from all such sales; and (e) the total profits earned by Harlow from all such sales, calculated on a product-line basis with supporting documentation.
Harlow must comply fully with each of the foregoing demands within ten (10) business days of its receipt of this letter.
IX. Preservation of Evidence
CPS further demands that Harlow immediately take all steps necessary to identify, locate, and preserve all documents and electronically stored information ("ESI") in Harlow's possession, custody, or control that relate in any way to ShieldCoat Pro 900, CPS-BC-1147, CPS Concentrate A, Archer Material Sciences Inc., or any communications with CPS's customers (including but not limited to Mapleridge Paper Corp., Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC). The materials to be preserved include, without limitation, all emails, text messages, instant messages, voicemails, memoranda, letters, laboratory notebooks, formulation records, batch records, production records, financial records (including invoices, purchase orders, and accounts receivable records), marketing materials, sales reports, customer correspondence, and all associated metadata.
Harlow must immediately implement a litigation hold to prevent the routine or intentional destruction, alteration, deletion, overwriting, or concealment of any such documents or ESI. This obligation extends to all backup tapes, servers, cloud storage accounts, personal devices, and any other media on which relevant information may be stored.
CPS places Harlow on explicit notice that any destruction, alteration, spoliation, or concealment of evidence — whether intentional or resulting from a failure to implement adequate preservation measures — will give rise to additional legal claims, including claims for spoliation of evidence, and will support requests for adverse inference instructions and other sanctions in any subsequent litigation.
X. Warning of Litigation
CPS sincerely hopes that this matter can be resolved without the necessity of litigation. However, CPS is fully prepared to protect its rights through every available legal avenue.
If Harlow fails to comply fully with each of the demands set forth in Section VIII above within ten (10) business days of receipt of this letter, CPS will immediately commence litigation against Harlow in the United States District Court, seeking, among other relief:
•  Emergency injunctive relief, including a temporary restraining order and preliminary injunction, prohibiting Harlow from manufacturing, selling, marketing, or distributing ShieldCoat Pro 900 or any product derived from CPS's trade secrets, and prohibiting Harlow from soliciting or contacting CPS's customers;
•  Compensatory damages for CPS's lost profits, price erosion, and other economic losses caused by Harlow's misappropriation and breach of contract;
•  Disgorgement of all profits earned by Harlow from the manufacture and sale of ShieldCoat Pro 900;
•  Exemplary damages for willful and malicious misappropriation under the Defend Trade Secrets Act, 18 U.S.C. § 1836(b)(3)(C), and the Ohio Uniform Trade Secrets Act, Ohio Rev. Code § 1333.63(B), in an amount up to two times the compensatory damages award;
•  Reasonable attorneys' fees and costs of litigation under the DTSA and the Ohio UTSA; and
•  Such other and further relief as the Court deems just and appropriate.
CPS will also seek relief against Gerald W. Norris, individually, in his capacity as Chief Executive Officer and sole shareholder of Harlow, and against Kenneth Fielding, individually, in his capacity as Vice President of Technical Operations, for their personal direction of and participation in the misappropriation and related wrongful conduct described herein.
XI. Reservation of Rights
This letter does not constitute an exhaustive recitation of CPS's claims, rights, defenses, or the facts and circumstances supporting them. CPS expressly reserves the right to present additional facts, legal theories, and claims as may be appropriate in any future proceedings or communications.
All rights and remedies available to CPS at law and in equity are expressly reserved, including without limitation the right to seek ex parte injunctive relief without further notice to Harlow should circumstances warrant. Nothing in this letter shall be construed as a waiver, release, or limitation of any of CPS's rights or remedies, and CPS's decision to make the demands set forth herein shall not be deemed an election of remedies or a condition precedent to the commencement of litigation.
We trust that Harlow will give this matter the immediate and serious attention it requires. Any response to this letter should be directed to the undersigned at the contact information set forth below.
Sincerely,
CALDERWOOD & HARKNESS LLP
By: ________
Catherine Bloom Partner
Direct Dial: (216) 555-0184
Email: cbloom@calderwoodharkness.com
cc: Rachel Sung, General Counsel, Crestline Packaging Solutions LLC cc: Alan Ngo, Calderwood & Harkness LLP

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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