Ex-Eastman employee charged with trade-secret theft

A federal grand jury has indicted an American materials scientist and a Chinese national for stealing trade secrets related to formulas for bisphenol A-free coatings. The technology was developed by several companies and a major customer as part of an effort to replace food and beverage can linings made with BPA-containing epoxies because of concerns about human health effects of BPA.

The American, Xiaorong (Shannon) You, is a PhD polymer scientist and 25-year industry veteran who worked for Coca-Cola and Eastman Chemical, the companies confirm. They are identified as “Employer #1” and “Employer #2” in the indictment.

During You’s employment at Coca-Cola as principal engineer for global research, the beverage company had a confidential research collaboration with six unnamed firms to develop non-BPA coating technologies. The indictment says she was one of a limited number of employees with access to trade secrets from all six companies.

Before she left Coca-Cola in the spring of 2017, the indictment alleges, You conspired with a Chinese businessperson, Liu Xiangchen, to steal trade secrets related to the formulations. The indictment claims that Liu agreed to help You get financially rewarded for her effort through a Chinese program called Thousand Talents.

You began working at Eastman in September 2017 where, the indictment alleges, the conspiracy to steal secrets continued until she was fired in June 2018.

“Eastman takes protection of its intellectual property seriously and we have controls in place to help prevent and to detect theft of confidential information,” Eastman’s chief legal officer, David A. Goldman, tells C&EN. “Those controls worked in this case, and we have been cooperating with law enforcement in this matter for some time.”

The trade secrets at issue in the case span the breadth of industry’s efforts to replace BPA in linings for steel and aluminum food and beverage cans. They include chemical substances and formulas for epoxy, polyolefin, and polyester materials and several application methods. In all, the US Department of Justice says, the technologies are worth about $120 million.

Since the beginning of 2018, Chinese companies have also allegedly targeted other chemical and pharmaceutical companies for trade-secret theft, including Lanxess, BASF, DuPont, and GlaxoSmithKline.

“Unfortunately, China continues to use its national programs, like the ‘Thousand Talents,’ to solicit and reward the theft of our nation’s trade secrets and intellectual property,” says John C. Demers, assistant attorney general for national security, “but the Justice Department will continue to prioritize investigations like these, to ensure that China understands that this criminal conduct is not an acceptable business or economic development practice.”