Chinese court rules for Sino Legend in trade secret case

ZHANGJIAGANG CITY, China—Shanghai No. 2 Intermediate People's Court has ruled in favor of Sino Legend (Zhangjiagang) Chemical Co. Ltd. in a trade secret infringement case brought against Sino Legend by Schenectady, N.Y.-based SI Group Inc.

In the case originally filed in 2007, SI Group accused Sino Legend and other companies of colluding with a plant manager at SI Group's Shanghai plant to steal SI Group's methods for manufacturing rubber tackifier resins, then hiring away the manager.

More recently, Sino Legend and its affiliates exported resins to the U.S. manufactured using SI Group's proprietary process, SI Group alleged.

The Shanghai court, after a two-day trial May 29-30 and several months of reviewing evidence, found June 17 that there was no factual or legal basis for SI Group's claims, according to a Sino Legend press release.

On its website, Sino Legend also said SI Group tried to withdraw from the trial May 28, then failed to appear in court the next day after the judge refused its request.

"These rulings reaffirm that our extensive investment in research and development led to our innovative processes and products," said Sino Legend Deputy Manager Corey Xie in the press release.

An SI Group spokeswoman said the company tried to add another defendant in the Chinese case, but the judge told the company it would have to withdraw and refile the case to do so. However, the same judge refused SI Group's request to withdraw and refile.

"We decided not to proceed with the case without all the evidence," she said.

The same day as the Chinese court ruling, an International Trade Commission administrative law judge made an initial determination in SI Group's favor on the same charges.

Judge Robert R. Rogers Jr. found that Sino Legend and its affiliates had misappropriated SI Group's rubber resin trade secrets and used them to cause material injury to the domestic resin industry.

"Despite the Chinese court ruling, this is a clear victory for us," the SI Group spokeswoman said. "The ITC made an unequivocal finding that our trade secrets were stolen."

Sino Legend is disappointed in the ITC decision and will appeal, according to Xie. SI Group, in turn, said it would appeal the Chinese court decision.