Bloomberg News

Ex-Dow Scientist Gets 5-Year Term for Trade Secret Theft

January 14, 2012

(Updates with Dow comment in seventh paragraph.)

Jan. 13 (Bloomberg) -- A former Dow Chemical Co. research scientist was sentenced to five years in prison for stealing trade secrets and selling them to Chinese companies.

The sentence against Wen Chyu Liu, also known as David W. Liou, was handed down yesterday by U.S. District Judge James J. Brady in Baton Rouge, Louisiana. A jury in February convicted Liu of perjury and conspiring to steal Dow trade secrets. He was indicted in 2005.

Liu, 75, of Houston worked for Dow from 1965 to 1992. At its Plaquemine, Louisiana, facility he had access to secrets related to the manufacture of chlorinated polyethylene or CPE, used in the making of vinyl siding, electrical cable jackets and industrial hoses, according to a U.S. Justice Department statement today.

“Liu traveled extensively throughout China to market the stolen information, and evidence introduced at trial showed that he paid current and former Dow employees for Dow’s CPE-related material and information,” the department said.

He paid one Dow worker $50,000 for a process manual and other product-related information, the U.S. said.

Liu’s lawyer, Frank Holthaus of Baton Rouge, didn’t immediately return a call seeking comment.

‘Immense Value’

“The technology that Mr. Liou was convicted of stealing belonged to Dow,” the Midland, Michigan-based company said in an e-mailed statement today. “Because of his education and position within the company, Mr. Liou knew of its immense value.”

Dow called the theft and sale of its intellectual property “a complete betrayal of the trust imparted to Mr. Liou as a Dow employee.”

A former Dow AgroSciences LLC researcher, Kexue Huang, was sentenced to seven years and three months in federal prison last month after pleading guilty in two consolidated cases to stealing trade secrets to benefit a Chinese university. The Huang prosecution was separate from the Liu case.

The Dow Chemical case is U.S. v. Liu, 05-cr-00085, U.S. District Court, Middle District of Louisiana (Baton Rouge). The Dow AgroSciences cases are U.S. v. Huang, 11-cr-00163 and 10-cr- 00102 U.S. District Court, Southern District of Indiana (Indianapolis).

--Editors: Andrew Dunn, Mary Romano

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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