Dow Secrets Stolen in Taiwan

BUSINESS IN ASIA

Company suspects ex-manager planned to use Dow know-how in China

A former manager of Dow Chemical in Taiwan was arrested at Taipei's international airport following a complaint by the U.S. company that he had stolen technical data.

Dow is working with police officials in Taiwan to determine whether the former executive, Tu Chung-hsien, has transferred the data to companies he formed in China earlier this year. Tu was with Dow for 14 years and reportedly had access to the company's R&D database. Taipei's China Post reports that Tu was recognized, in 2001, as one of Dow's three "technical leaders" in Asia.

Dow is reluctant to comment. The company's spokeswoman in Hong Kong, Kay Yau, won't explain how Dow discovered Tu's alleged wrongdoings or if Dow has been the target of other cases of industrial espionage in Taiwan or in other parts of the world. But she insists that the value of Dow's loss as a result of Tu's actions does not amount to $585 million, as some Taiwanese newspapers have reported. The China Post estimated the value of Dow's loss at $6 million.

A lawyer at the Taipei Bar Association says Tu in theory could face a 15-year jail term. But the lawyer adds that this would be a stretch: Of the three offenses Tu might be charged with, none carries a sentence longer than five years.

Multinational companies are wary of losing their know-how to China, where they fear the legal system is rigged against them. Last week, China's State Intellectual Property Office ruled that GlaxoSmithKline's formulation patent for rosiglitazone, the active ingredient in the diabetes drug Avandia, was invalid. The same agency recently voided a Pfizer patent on sildenafil, the active ingredient in Viagra.