Chinese court rules in favour of Dow and Johnson Matthey in trade secrets case

Dow (NYSE: DOW) and Johnson Matthey (LSE: JMAT) announced that the Jiangsu High People’s Court in China has ruled that Shanjun Clean Energy Technology Company Limited (“the defendant”) infringed the trade secrets of Dow’s and JM’s affiliates and ordered the defendant to pay significant compensation for the illegal utilization of these trade secrets.

The Court held in its July 2020 ruling that the defendant illicitly obtained and infringed trade secrets owned by Dow Global Technologies LLC, a subsidiary of The Dow Chemical Company, and Johnson Matthey Plc (through its Johnson Matthey Davy Technologies Limited subsidiary). The stolen trade secrets relate to the companies’ jointly owned LP Oxo^SM Technology, which is a catalyzed low pressure process for the production of oxo alcohols. The LP Oxo^SM Technology provides licensed customers with significant competitive advantages, including superior catalyst systems, simplified design, low capital investment, high feedstock efficiency, high quality products, and safe and easy plant operations. The LP Oxo^SM Technology has been licensed into more than 20 projects in China.

“Dow thanks the Jiangsu High People’s Court for its final decision on this case,” said Yoke Loon Lim, President, Dow Greater China. “The ruling demonstrates fair enforcement of trade secret rights and commitments of the U.S. and China’s Phase One Agreement and China’s commitment to improve intellectual property rights. This enforcement is critical to protect the legitimate operations and economic resiliency of domestic manufacturers in China, the US and around the globe. Dow will continue to vigorously exercise our full legal rights to protect our intellectual properties in all countries.”

“This ruling by the Jiangsu High People’s Court vindicates the decision by JM and Dow to pursue legal action against infringing operators. We are pleased with this ruling which achieves our aim of protecting the investment of our legitimate licensees. There are 20 projects in China who operate licensed LP Oxo^SM Technology in plants designed by JM and they will benefit from this ruling. JM will continue to defend the investment of our licensees in our technology.” said John Gordon, Managing Director, Efficient Natural Resources, JM.

This case marks the second successful defense by Dow and JM of their LP Oxo^SM Technology. In 2017, an arbitration panel of the Stockholm Chamber of Commerce held that Luxi Chemical Group Co., Ltd. based in Shandong Province, P.R. China violated its Secrecy and Non Use Undertaking for the LP Oxo^SM Process by using Dow’s and JM protected information in the design, construction, and operation of its butanol and 2-ethylhexanol plants and awarded Dow and JM approximately USD $100 million. Dow and JM are pursuing appropriate actions to enforce the award.

Dow, JM, and their predecessors have continuously improved the LP Oxo^SM Technology and offered it to the oxo alcohols industry for over 45 years and intend to continue improving and licensing the technology in the future. To date, the suite of LP Oxo^SM Technology has been licensed into a significant number of projects across 15 countries, representing a majority of the world's oxo alcohols capacity licensed. Legitimate licensees are provided performance warranties and design and technical support at every step to ensure success.