GT Solar sues its founder
Merrimack-based GT Solar International is suing its founder, Kedar Gupta. A suit filed May 7 by GT Solar in Hillsborough County Superior Court alleges that Gupta, now head of ARC Energy in Nashua, copied a new method for making crystals - touted as unique by Gupta and President Barack Obama on a trip last year to ARC's plant - which was really developed by what is now a subsidiary of GT Solar.GT Crystal Systems and GT Solar Hong Kong - both subsidiaries of GT Solar - charge that Advanced Renewable Energy Company LLC (ARC Energy) obtained the complicated method from Chandra Khattak.Khattak formerly worked at Crystal Systems Inc., which GT Solar acquired last year, and left to work at GT Solar in 2006, when Gupta was still involved with the company. A year later, the suit alleges, Khattak slipped Gupta CSI's trade secrets and followed Gupta to work on them at ARC.Gupta, reached by NHBR, declined comment on the advice of his attorney, but he did not disavow statements claiming that ARC developed a new cost-saving way to produce sapphire crystals - a key component in the production of LED lighting.ARC makes a turnkey system that allows manufacturers to grow sapphire crystals on six-inch and eight-inch disks, as opposed to the industry-standard two-inch disks currently in use. That brings the cost down, enabling LED to better compete with other lighting methods."We have found the most economical way [to produce the crystals]," Gupta told NHBR in September 2010, "and we are the only one in the world that does it."His claims were echoed by Obama, who said in a February 2010 speech in Nashua that "the technology they've created is the only one of its kind in the world."Gupta co-founded GT Solar with his longtime business partner, Jon Talbott, in 1994 with $1,000 between them, then led the company as CEO until retiring from it in 2006.But Gupta was part of the group - GT Solar Holdings LLC - that controlled the Merrimack company even after it went public in 2008. That move resulted in a $90 million dividend, when the group controlled 51 percent of the company.The LLC sold off its majority stake in September 2010.Gupta founded ARC Energy in 2007, but it really took off last February, when it got a visit from Obama and $5 million from General Catalyst Partners, a Cambridge, Mass., venture capital firm.At that time, GT Solar's sole focus was on developing and distributing the equipment to make solar cells, but that changed last July when it acquired Crystal Systems, a company founded in 1971 and based in Salem that does the same thing for LED lighting. That put Gupta's former company - GT Solar International - in direct competition with his new company, ARC Energy.According to the lawsuit, Crystal Systems was hard at work developing its method for producing larger-diameter sapphire crystals for almost 40 years, through a complicated "heat-exchanger method" that involves melting aluminum oxide around a seed crystal while keeping the seed cool enough to remain in crystallized form.The suit said CSI's method produces "the largest highest-quality sapphire crystals in the world," using a formula with many variables that have been developed through years of trial and error that cannot be deduced from the crystal itself.CSI employed Khattak from 1977 to 2006, according to the suit, where he rose to senior positions that required for him to be "fully familiar with all details concerning the process of producing sapphire crystals."Khattak left CSI to work at GT Solar as senior vice president of technology in 2006, with a confidential separation agreement and a 10-year noncompete clause, according to the suit. However, in 2007, according to the suit, Khattak broke that agreement by undertaking an "active collaboration with Gupta," which "continues to this day."In October, Gupta filed a patent application that is "substantially identical to CST's process," according to the suit.GT "terminated" Khattak's employment in May 2010 (the suit does not say why), and ARC hired him in July 2010 as vice president of technology."It is impossible for Khattak to work within ARC Energy on the process described in Gupta's patent application without using his knowledge of CSI's proprietary trade secrets," the suit alleges.All this comes at a time when LED lighting is taking off worldwide. LED bulbs are significantly more efficient than incandescent and CFL bulbs, but they are also more costly to produce, so any method to substantially cut production costs could be worth billions.Gupta told NHBR ARC is in "stealth" mode and referred all questions about the lawsuit to Dan Lyman - a former in-house counsel for GT Solar who now represents ARC Energy. Lyman did not return phone calls by deadline. Khattak also declined comment, referring his questions to Lyman as well.Bob Sanders can be reached at email@example.com.