Sat, Nov 17, 2018 - Page 10 News List

Chinese-born German faces data theft charge

Reuters, COLOGNE, Germany

German prosecutors are pressing criminal charges against a former employee of chemicals maker Lanxess AG for allegedly stealing trade secrets to set up a Chinese copycat chemical reactor.

The case underscores fears among German officials and executives about industrial espionage in Europe’s largest manufacturing nation.

State prosecutors in Cologne, where the company is headquartered, said they had brought criminal charges in June against a Chinese-born German national, based on a complaint filed with police by Lanxess about two years ago.

There have been several reports in Germany of manufacturers with operations in China catching local staff doing work for copycat rivals, but the alleged data theft at Lanxess is a rare case in which a suspected leak has been identified at home.

The German intelligence agency, the Federal Office for the Protection of the Constitution, in July warned companies in its annual report that China could resort to intellectual property theft as it aspires to become an exporter of high-tech products, adding that it is hard to distinguish between state and industrial espionage.

In the Lanxess case, which has not previously been reported, the 48-year-old engineer was fired when the company discovered the data theft related to a chemical reactor, prosecutors said.

A 40-year-old German associate, also of Chinese descent, who allegedly received the trade secrets via e-mail and sought to commercially exploit them in China, is also being prosecuted, they said.

If convicted, the two face up to four years in prison. A third accomplice was allegedly also involved, but prosecutors have no knowledge of his whereabouts.

Lanxess and the prosecutors’ office declined to disclose the names of the accused.

Criminal defense lawyer Martin Buecher of Birkenstock Rechtsanwaelte, the Cologne-based law firm that represents both defendants in the criminal case, said their clients would not comment on the accusations.

He would not identify them.

The case is complex and the prosecution is relying on assertions from Lanxess staff, Buecher said, adding that the defense would seek external expert witnesses to be heard to ensure objectivity.

In an online synopsis of an earlier civil lawsuit heard in a Duesseldorf court in February last year, which two sources said involved the same alleged infringement, the unnamed man denied that the e-mailed data amounted to trade secrets.

The court ruled that he should pay damages of about 180,000 euros (US$204,221). An appellate court lowered the amount to around 167,000 euros, but ruled that the defendant was liable to compensate Lanxess for any future fallout from the infringement.

A group of employees of Chinese origin stole confidential information about a new, innovative product several years ago and tried to exploit it commercially, Lanxess said in a statement.

“The main culprit was a former employee, who abused a position of trust and access to confidential business information,” the company said.

“Lanxess was able to secure evidence and is holding the perpetrators accountable in court. Lanxess therefore managed to avert damage from the business,” it said.

Lanxess, which makes additives, pesticide ingredients, construction pigments and engineering plastics, declined to provide further details of the case.

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