In a victory for businesses interested in protecting their trade secrets, a U.S. federal judge in Baton Rouge recently handed down a five-year sentence to a former Dow Chemical research scientist who stole and sold his employer’s trade secrets to Chinese companies. The ex-employee was indicted in 2005 and found guilty last February of perjury and conspiracy to steal trade secrets from the company. He worked for the Dow Chemical from 1965 to 1992.
A company’s intellectual property, such as its trade secrets and proprietary materials, are essential to the life and competitive value of the company. Keeping a close eye on business law, companies must aggressively enforce their intellectual property rights or risk extinction. A Dow Chemical representative referred to the theft and sale of its trade secrets as a betrayal of the trust Dow bestows on its employees.
The evidence against the former employee was extensive. The man had worked at Dow’s Plaquemine, Louisiana, facility, where the company manufactures chlorinated polyethylene — or CPE — which is used to make vinyl siding, electrical cable jackets and industrial hoses. The evidence showed that the former employee even paid other Dow employees for information on CPE, including a $50,000 payment for a process manual.
The evidence also showed that the former research scientist traveled extensively throughout China searching for buyers of the stolen information. Because of his education and position, the company said there was no doubt that he knew the immense value of CPE to foreign competitors.
This is not the first time a Dow employee has taken advantage of access to company secrets. In December 2011, a former researcher for Dow’s AgroSciences division who had been with the company for five years was sentenced to seven years in federal prison after pleading guilty to stealing secrets for a Chinese university.
Intellectual property is an essential business asset. Trade secrets and other proprietary material give a company value. It is vital to hold individuals who steal intellectual property liable, and, fortunately, business law provides companies with that opportunity. Litigation is never anyone’s first choice of action, but sometimes it is the only way to protect your business and the trade secrets that give it a unique, competitive edge in the marketplace.
Source: Bloomberg Businessweek, “Ex-Dow Scientist Gets 5-Year Term for Secret Theft,” Andrew Harris, Jan. 14, 2012