Ex-Coca-Cola chemist jailed for 14 years over trade secrets theft
A former Coca-Cola chemical engineer has been sentenced to 14 years in prison after being convicted of stealing trade secrets worth $120 million to benefit a China-based company.
The US Department of Justice (DoJ) confirmed on May 9 that a federal judge in Greeneville, Tennessee, handed down the sentence to Xiaorong You, aka Shannon You, 59, of Lansing, Michigan.
The defendant was also ordered to serve three years of supervised release and pay a $200,000 fine.
Economic espionage
In April 2021, a jury at the US District Court for the Eastern District of Tennessee found that You had conspired to commit trade secret theft and economic espionage, stole trade secrets, and carried out wire fraud.
According to court documents and evidence presented at trial, the trade secrets related to formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans.
You gained access to the trade secrets while working at Coca-Cola in Atlanta, and Eastman Chemical Company in Kingsport, Tennessee, which had cost nearly $120 million to develop.
You stole the trade secrets to set up a new BPA-free coating company in China. You and her Chinese corporate partner, Weihai Jinhong Group, received millions of dollars in Chinese government grants to support the new company (including a Thousand Talents Plan award).
From December 2012 through August 2017, You was employed as principal engineer for global research at Coca-Cola, which had agreements with numerous companies to conduct research and development, testing, analysis and review of various BPA-free technologies.
BPA-free trade secrets
Because of You’s extensive experience with BPA and BPA-free coating technologies, she was one of a limited number of Coca-Cola employees with access to BPA-free trade secrets belonging to Akzo-Nobel, BASF, Dow Chemical, PPG, Toyochem and Sherwin Williams.
From September 2017 through June 2018, You was employed as a packaging application development manager for Eastman Chemical Company in Kingsport, Tennessee, where she was one of a limited number of employees with access to trade secrets belonging to Eastman.
“As the evidence at trial showed, the defendant stole valuable trade secrets and intended to use them to benefit not only a foreign company, but also the government of China,” said assistant attorney general Matthew Olsen of the Justice Department’s National Security Division.
He added: “Today’s sentence reflects the seriousness of this offence, as well as the Department of Justice’s commitment to protect our nation’s security by investigating and prosecuting those who steal US companies’ IP.”
Until recently, BPA was used to coat the inside of cans and other food and beverage containers to help minimise flavour loss and prevent the container from corroding or reacting with the food or beverage contained therein.
However, due to BPA’s potential health risks, companies began searching for BPA-free alternatives. Developing these BPA-free alternatives was a very expensive and time-consuming process, noted the DoJ statement.
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