By Tom Hals

Sept 24 (Reuters) - South Korea's Kolon Industries Inc can continue to make a rival version of DuPont's Kevlar synthetic fiber used in body armor while it challenges a judge's order that halted production, an appeals court has ruled.

The U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia, ordered a stay on Friday - pending appeal - of a 20-year injunction that barred Kolon from making and selling Heracron.

DuPont won the injunction from U.S. District Judge Robert Payne in Richmond in August.

"This is not a decision on the merits of the case, only a ruling to keep the status quo during the appeal," Wilmington, Delaware-based DuPont said in a statement on Monday. The company said the ruling did not affect the verdict it won last year.

In September 2011, a federal jury in Richmond ordered Kolon to pay DuPont $919.9 million in damages for stealing 149 trade secrets relating to Kevlar, a high-strength para-aramid fiber used in armor, military helmets, tires and fiber-optic cables.

DuPont had sued Kolon in February 2009, claiming misuse of proprietary information obtained from Michael Mitchell, a 24-year DuPont veteran who left the company in 2006 to start his own fiber business and later began working with Kolon.

In 2010, Mitchell pleaded guilty to theft of trade secrets and served most of an 18-month prison term, according to court and prison records.

In its request for a stay, Kolon said it is likely to win an appeal, claiming errors at trial, weaknesses in DuPont's case, and a lack of evidence that Kolon's activities caused DuPont to lose sales or profit.

Appeals Court Judges Dennis Shedd and Andre Davis voted to stay the injunction against Kolon, while Albert Diaz voted against the stay, according to the court order.

Shares of DuPont were down 62 cents, or 1.2 percent, at $51.18 on the New York Stock Exchange at midday. Kolon rose 2.5 percent, or 1,500 won, to 61,900 won on the Korea Stock Exchange.

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