[BreachExchange] Former Coca-Cola Scientist Is the Latest to Be Indicted in U.S. Crackdown on China-Related IP Theft

[Destry Winant]

http://fortune.com/2019/02/15/us-china-ip-theft-coca-cola-you-xiaorong/

Another week, another China-linked case about intellectual property
theft. This time, U.S. authorities have charged a Chinese-born,
Michigan-based engineer—a former Coca-Cola employee—with the attempted
theft of trade secrets valued at almost $120 million.

You Xiaorong, also known as Shannon You, worked as a principle
engineer for global research at an unnamed Atlanta company from
2012-2017, the Justice Department said Thursday. Coca-Cola told the
Wall Street Journal that it was the company in question.

At Coke, You had access to trade secrets regarding the development of
new coatings for the inside of cans and other containers, that were
free of bisphenol-A (BPA)—a coating that was used for a long time but
that is now known to have harmful effects. She then went on to work
for a packaging company in Tennessee where she also had access to
trade secrets.

According to the indictment, she then took trade secrets to China, in
order to give them to a state-backed company there. U.S.
prosecutors—who have recently lobbed intellectual property theft
charges at Huawei and a Chinese former Apple employee—said this formed
part of a pattern.

In the context of the U.S.-China trade war, which is partly about the
issue of IP theft, it is now beyond doubt that the Justice Department
is trying to send China a message.

“The conduct alleged in today’s indictment exemplifies the rob,
replicate and replace approach to technological development,” said
Assistant Attorney General John Demers. “Unfortunately, China
continues to use its national programs, like the ‘Thousand Talents,’
to solicit and reward the theft of our nation’s trade secrets and
intellectual property, but the Justice Department will continue to
prioritize investigations like these, to ensure that China understands
that this criminal conduct is not an acceptable business or economic
development practice.”

You wasn’t the only one charged in this case—so were Chinese national
Liu Xiangchen and an unnamed third co-conspirator. Liu apparently
manages the Chinese company that would have manufactured products
based on the allegedly stolen secrets, and paid You with money and
part-ownership of a new company that would have “owned” the secrets.