Former employee accused of stealing US Eastman trade secrets

Author: Al Greenwood

2019/02/15

HOUSTON (ICIS)--US-based Eastman Chemical confirmed on Friday that a former employee had been indicted on allegations that she stole trade secrets during the brief time she worked at the company.

The former employee, You Xiaorong, along with Liu Xiangchen, are accused of stealing trade secrets related to formulations of coatings that are free of bisphenol-A (BPA), according to the US Department of Justice.

You was alleged to have stolen trade secrets from six entities while working for an unnamed company before joining Eastman, the US said. The value of the trade secrets allegedly stolen from these six entities was worth $106.6m, the US alleged.

From Eastman, the secrets allegedly stolen were worth $13m, and they covered resins used to make BPA-free coatings that were applied to the interior of metal packaging, according to the indictment.

From September 2017 through June 2018, You worked as a packaging application development manager for a company in Kingsport, Tennessee, the department said. In that role, You had access to the company's trade secrets.

In a statement, Eastman's chief legal officer, David Golden, said: "Eastman confirms that the indictment’s statements about a Kingsport, Tennessee Company are references to Eastman. As an innovation-driven maker of additives and specialty materials, Eastman takes protection of its intellectual property seriously and we have controls in place to help prevent and to detect theft of confidential information.

"Those controls worked in this case, and we have been cooperating with law enforcement in this matter for some time," Golden said in the statement. "However, this case involves someone who worked for Eastman for less than 10 months after 25 years with other US companies, so our involvement with the person and the case was relatively limited."

Eastman fired You in June 2018, the US alleged in the indictment.

According to the allegations from the US, You allegedly sought to steal trade secrets from seven unnamed entities, according to the indictment. She would then transfer the trade secrets to an unnamed company in Shandong province, China, for which Xiangchen was the general manager, the US alleged in the indictment.

An unnamed third person allegedly acted as an intermediary between You and Xiangchen, the US alleged.

In return for You's alleged theft, Xiangchen would help her receive the Thousand Talent and the Yishi-Yiyi awards, the indictment said.

The Chinese governments gives the Thousand Talent award to people living in Western countries who return to China and use their expertise to promote the country's technological development, the US said.

The Yishi-Yiyi award is given to people on a provincial level by Shandong, the US said.

The three then planned to use the stolen trade secrets to develop a new generation of BPA-free coatings, the US alleged. They would develop these new coatings at a laboratory built by a joint venture that included an unnamed Italian company and another unnamed Chinese company.

The Department of Justice and the indictment did not disclose contact information for You and Xiangchen, and they could not be reached for comment.

The indictment was filed in Us District Court, Eastern Tennessee District. The case number is 19-cr-14.

(adds paragraphs 3-4 to clarify that You allegedly stole trade secrets when she was employed with a company other than Eastman)