China Accused Of Technology Theft

Ineos is suing the Chinese oil and chemicals giant Sinopec for misusing trade secrets related to its process for manufacturing acrylonitrile, an intermediate used to make acrylic fibers and plastics.

Ineos, one of the world’s largest chemical makers, claims that Sinopec is engaged in “prolific building” of acrylonitrile plants in China that copy its technology. The Swiss company makes the material at four sites in the U.S. and Europe that employ 600 people. In addition, Ineos says its process is used by more than 90% of acrylonitrile plants worldwide. All told, Ineos’s nitriles business brings in about $2.5 billion a year, the firm says.

“We have good and valuable relationships with Sinopec and other Chinese companies across our business,” Ineos Chairman Jim Ratcliffe says. In fact, last month Ineos and Sinopec formed a joint venture to build phenol and acetone facilities in Nanjing, China. But “unless we protect our intellectual property, ultimately we will see the demise of Ineos,” Ratcliffe adds.

Ineos has brought the case before the Beijing High Court and an arbitration tribunal in Sweden. China’s legal protection for intellectual property has improved as the country has started to file more patents, Ineos says. Sinopec didn’t respond to C&EN requests for comment. The company denied in a statement to Reuters that it had done anything improper.

Ineos’s allegations fit the narrative that Chinese firms don’t respect intellectual property rights. Last summer, the Commission on the Theft of American Intellectual Property reported that intellectual property theft by China is “disproportionately large” in size and impact.

Earlier this month, the U.S. Department of Justice found two individuals and one company guilty of selling trade secrets related to DuPont’s titanium dioxide process to Chinese state-owned companies.

Fear of losing control of their technology has kept many companies from building plants in China. For instance, China is a major market for synthetic rubber, but no international producer has built facilities there for solution-polymerized styrene-butadiene, an advanced rubber used in tires.