Coatings World - October 2010

Editor’s Page

New Jersey man arrested for stealing trade secrets

I’m sure has gotten around the industry by now that a former Valspar employee recently admitted to stealing trade secrets from the paint maker with plans to take them to a new employer in China. David Yen Lee, 54, of Jersey City, New Jersey, pleaded guilty to theft of a trade secret with intent to economically benefit someone other than its owner before U.S. District Judge Robert Gettleman in Chicago, IL.

Lee worked as a technical director at the Wheeling, Illinois, facility of Minneapolis-based Valspar from 2006 to 2009, when he left to take a job in Shanghai with Osaka, Japan-based Nippon Paint. Nippon wasn’t charged with any wrong doing.

When he was arrested in March 2009, Lee had a pocket-size computer thumb drive containing Valspar data in his possession. The information he took they said is worth $7 million to $20 million.

Lee, whose crime is punishable by as long as 10 years in prison and a $250,000 fine, is scheduled to be sentenced on Nov. 23.

According to his plea agreement, beginning in September 2008 and continuing through February 2009, Lee discussed possible employment with Nippon. On February 27, 2009, Lee accepted an employment offer from Nippon to serve as the vice president of technology and administrator of research and development in Nippon’s Shanghai, PRC offices. Lee resigned from Valspar on March 16, 2009, and prepared to relocate to Shanghai.

As a technical director at Valspar, Lee had access to Valspar’s secured internal computer network, including access to trade secrets in the form of proprietary chemical formulas, paint properties calculations, and emerging research and development information.

According to his plea agreement, during the period from November 2008 through March 2009, Lee downloaded trade secrets from Valspar’s secured computer system and transferred electronic files to external thumb drives with the intention of using the trade secrets for the benefit of another.

This case makes me wonder how much information has slipped through the cracks and made its way to foreign competitors. Do you know of any other instances of trade secret theft that has occurred in the paint and coatings industry recently? If so, I would like to hear about it. Thank you.

TWRIGHT@RODPUB.COM

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