Miller UK in $100m court claim against Caterpillar

Cramlington-based Miller UK are involved in a David Vs Goliath-style court battle with their former biggest client Caterpillar

Miller directors - Gary, Jacqui and Keith - outside the Miller UK factory
Miller directors - Gary, Jacqui and Keith - outside the Miller UK factory

A Northumberland business is involved in a multi-million pound court battle against former major client Caterpillar, claiming the US construction giant stole its engineering designs.

Founded in 1978, Miller UK enjoyed a long and mutually-beneficial business relationship with global firm Caterpillar, an arrangement which gave the American firm exclusive rights to sell the Miller Bug Coupler in the US.

First going on the production line in 1999, the coupler soon became a global leader and by 2007 the Cramlington business had seen sales soar to £38.7m, with profits topping £5.5m.

But in 2008 Caterpillar dealt Miller a catastrophic blow by ending the business agreement – a move the firm claims led to the loss of just under 300 of its 400-strong workforce.

The firm pulled through the ensuing recession, but said it was dealt an even bigger blow when it emerged soon after that Caterpillar were making their own version of the bug coupler.

Miller UK claim Caterpillar have used Millers’ own designs to make the rival coupler, drawings only given to them as part of a confidentiality agreement.

Now Miller UK is embroiled in a David and Goliath-style court battle in the Illinois law courts, in which the firm claims Caterpillar used a supply agreement to gain access to proprietary materials.

In court documents, however, Caterpillar states the design of its own coupler was supervised by one of its own in-house engineers.

The family firm – run by siblings Keith, Jacqui and Gary Miller – alleges fraud, trade secret misappropriation and breach of confidentiality agreements, and are seeking more than $100m in damages and compensation.

Keith Miller on the production line
Keith Miller on the production line
 

The case was set in motion in the US District Court for the Northern District of Illinois in 2010, but Miller UK directors are now speaking about the case for the first time, coinciding with the case entering the final stages of deposition.

Keith Miller, who founded the business in 1978, said the firm has so far spent several millions on raising the case and hopes a court date will be set for June 2015.

Keith was the main negotiator with Caterpillar who, he claims, repeatedly led the North East business to believe that it would continue to purchase from and help to grow the business.

He alleges to have sat through countless phone calls and face-to-face meetings in which they denied they were working on a similar product.

Keith said the firm is determined to have their day in court.

He said: “When they ended our agreement it took away a third of our business and the majority of our profits.

“Then we learned that their coupler was virtually identical to ours. Through discovery in the US we have learned they have stolen our models and tweaked them. The metadata shows that.

“In 2008 we had 400 people and had to manage it down to just over 100. We had offices in the US, Gibraltar, China, Japan and the North East and I had to go around the world sacking people – it was a horrible, horrible time.

“Grown men, worried they had nothing else to go to, were crying.

“I had to remortgage my house. We also had terrible rows within the family who were looking to someone to blame, and as I had been the main negotiator they blamed me.

“We have spent millions on the court case so far and we’ve had litigation funding in the US too.

“We’ve been through deposition and everything has been videotaped and people have been interviewed under oath, so now we are waiting for a court date to be set.”

The coupler production line at the Miller UK factory
The coupler production line at the Miller UK factory
 

Fellow director Jacqui Miller added: “We are in a true David Vs Goliath battle and I think they want to beat the small man until he runs out of money and goes away, but we want to make this an example to other big companies.

“It impacted enormously on us. The personal impact was immeasurable and we had huge difficulties within the family, the three of us running the business.

“For a couple of years we didn’t know if our business was going to survive.

“If it wasn’t for our tenacity and sheer grit and determination and true Geordie “it’s not over until it’s over” fashion, much weaker individuals would have folded.

“Sure the recession would have taken a bite but nowhere near as much as it did.

“We are a little company in the North East but we have teeth. As Body Shop founder Anita Roddick once said ‘if anyone ever thought ‘small’ couldn’t hurt, they have not been in bed with a mosquito’.”

A spokesman for Caterpillar said: “As this is pending litigation, we prefer not to comment.”

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