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Chemical Manufacturer Data Theft Case to Begin in June

by Chris Brook on Thursday February 7, 2019

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For the second time in the last month, a chemical manufacturer is accusing one of its former employees of stealing trade secrets to commercially exploit them in China.

A court will convene later this year to try to hold a former chemical manufacturer employee accountable after he allegedly stole trade secrets from his billion-dollar employer in Germany.

Lanxess, a chemical manufacturer based in Cologne, makes additives for lubricants, grease, metalworking fluids, flame-retardants, and other synthetic base fluids.

It's believed the suspect, with the aid of an associate, used intel taken from the company to build a chemical reactor in China and manufacture an unidentified chemical that would compete with a Lanxess offering.

It’s assumed the case is the connected to a civil suit the company brought against two individuals in 2017 after it discovered the theft and in turn, terminated the employee. German prosecutors indicted two Chinese-born German nationals involved in the incident last fall.

An appellate court awarded the company €167,000, or $189,553 USD in damages at the time and ruled the defendants were liable for future fallout stemming from the theft.

Lanxess insists it hasn't suffered any damage to its business because of the theft but it isn't done with legal proceedings either. According to Reuters, which broke the news of the impending criminal charges on Monday, preliminary hearings around the case will take place on June 26 and July 5 this summer.

The two apparently facilitated the data theft through email as the employee at Lanxess – 48 year old a senior engineer – rose up through the ranks, in 2011 and 2013, and gained "access to large amounts of sensitive data." The engineer sent the information, specifically data on a Lanxess-designed reactor, to a 40 year old associate via e-mail according to Reuters.

What exactly the trade secrets included, outside of sensitive data on the reactor, isn’t known.

“A group of people of Chinese origin stole company and trade secrets about an innovative product that had not yet achieved a high turnover and tried to exploit it commercially,” the company told Chemical & Engineering News, a trade publication published by the American Chemical Society, this week.

The civil lawsuit alleges the defendants built a 400 ton-per-year reactor and was promoting its product globally.

“In 2016, the employee co-founded unspecified legal entities to produce and export the copied product from China and the business advertised its new capabilities online and in a press release, according to the documents,” Reuters said in November.

In January, BASF, another German chemical producer, accused former employees of leaking some of its technologies to a Chinese company.

Tags: Industry Insights, Manufacturing, IP theft

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Chris Brook

Chris Brook is the editor of Data Insider. He is a technology journalist with a decade of experience writing about information security, hackers, and privacy. Chris has attended many infosec conferences and has interviewed hackers and security researchers. Prior to joining Digital Guardian he helped launch Threatpost, an independent news site which is a leading source of information about IT and business security for hundreds of thousands of professionals worldwide.