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Intellectual Property Law

: Womble Trade Secrets Blog

China Detaining U.S. Citizen on Alleged Theft of "Commercial Secrets"

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ABCNews.com is reporting that the Chinese police have detained an American automotive engineer for more than a year on accusations he misused trade secrets ? the latest case of vague secrecy laws being used against an American in China.

Hu's wife, a China-born naturalized American like her husband, said Tianjin authorities' real target is a China-based company she managed and whose cutting-edge products competed with those of the former business partner, the Hysci (Tianjin) Specialty Materials Co. Hysci, she said, complained that her startup was developing products unusually fast, prompting the trade secrets investigation.

"You don't sue someone just because you think their R&D is too fast," said Hong Li, who lives in the Los Angeles area with their two teenage children. "This case is being conducted illegally."

Hysci declined comment, as did the Chinese company that employed Hu at the time of his detention. Prosecutors referred inquiries to the Tianjin police. The police information office said the criminal investigation is continuing but refused to elaborate other than to say "it is a complicated case."

Hu's detention comes amid other similar prosecutions of China-born foreign nationals. In recent months, Australian national Stern Hu ? an executive with the global mining giant Rio Tinto involved in big-money and politically touchy iron ore negotiations ? was detained on state secrets charges that were later reduced to infringing trade secrets.

Another China-born, naturalized American, geologist Feng Xue, disappeared into custody two years ago and has been put on trial for passing on state secrets ? for arranging the purchase of a detailed commercial database on the Chinese oil and gas industry.

Late last year, Hu was detained for reasons Li said are not wholly clear to her. Hysci began accusing her and the Chinese company that she ran of developing competitive materials too quickly for a startup, she said.

"I don't know what happened. I didn't ask him what was going on with him, and he didn't ask what was going on with me. We were all busy in our work," she said.

Li said she did not know what patented technology Hu is accused of violating. She declined to name the company she chaired or its location, saying it was under a proprietary supplier relationship with Wuxi Weifu.

Wuxi Weifu and Hu's lawyer, Shanghai-based intellectual property rights expert Zhu Miaochun, declined comment. Engelhard was acquired in 2006, two years after Hu left, by the German chemical maker BASF. A BASF spokeswoman said the company had not been contacted by Hu, his lawyer or Chinese authorities about the case.

WE WILL REPORT ANYTHING FURTHER WE LEARN ABOUT THIS MATTER.

Full post as published by Womble Trade Secrets Blog on December 17, 2009 (boomark / email).