California businessman accused of stealing DuPont trade secrets

| Feb 28, 2014 | Trade Secrets

A jury in San Francisco is getting ready to deliberate over whether or not a California man is guilty of stealing secret DuPont technology and giving it to China. The 56-year-old man is accused of providing Chinese company Pangang Group Co. with trade secrets involving the process for manufacturing titanium dioxide. The chemical is used as a white pigment in plastics, paper and paint. Prosecutors allege that the man began providing secret information to the Chinese company after a meeting he had with a Chinese state council member in 1991. The politician allegedly encouraged the defendant to obtain technologies that could be beneficial to China. Delaware-based DuPont is the largest producer of titanium dioxide in the world.

The businessman ran a consulting company in Oakland between 2006 and 2011 that received $28 million in contracts for designing a facility that could produce titanium dioxide for Pangang. He is accused of using internal DuPont reports regarding plant equipment as well as DuPont process-flow diagrams in his plans. Prosecutors state that the man lied about the plans when his actions were discovered in 2011.

The specific charges against the man include trade secret theft, conspiracy and economic espionage. His attorneys have argued that he used public information to create the facility designs, which were intended to directly compete with the technology used by DuPont. A key witness for the defense claimed that the FBI ignored the man’s own personal research and patents during a raid of his home in 2011, stating that the information in question is readily ascertainable and not necessarily a trade secret.

Regardless of the jury’s decision, however, there is evidence that Chinese spy agencies are increasingly trying to steal U.S. technology. According to the Obama administration, spy agencies from China are engaged in widespread industrial espionage campaigns that focus on telecommunications, biotechnology, nanotechnology and clean energy industries. Over 20 individuals have been charged with stealing U.S. trade secrets for China in recent years. Any California business related to one of these industries may need to consider legal action if there is any suspicion of espionage.

Source: Bloomberg, “California Man Gave DuPont Secrets to China, U.S. Says” Karen Gullo, Feb. 24, 2014