Anticipate This!™ | Patent and Trademark Law Blog

Dow’s Trade Secrets Sold to China?

Posted in General Commentary by Jake Ward on August 29, 2006

According to this Reuters article, U.S. authorities have recently arrested David Liu, a former Dow R&D employee of 27 years (retired), and charged him with attempting to sell stolen trade secrets to Chinese companies.  It is further alleged that Liu later hired Dow Chemical employees to prepare a detailed engineering package to sell to prospective Chinese buyers.

The secrets Liu allegedly was trying to sell were connected to Dow´s Tyrin-brand chlorinated polyethylene business. Tyrin is used primarily as an impact modifier in vinyl and PVC, as well as general rubber applications.  Tyrin applications include automotive and industrial hoses, electrical cable jackets, vinyl siding and window framing.  See Dow website.

The Uniform Trade Secrets Act (UTSA) defines a “trade secret” as information, including a formula, pattern, compilation, program device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 

When used properly, trade secrets can be a valuable means of protecting intellectual property.

Note:  David Liu has been charged with 15 counts, including eight counts of wire fraud. If convicted, he could face a total of 300 years in jail and a maximum fine of $9.75 million. 

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