Dow Trade Secrets to China

On January 12, 2012, Wen Chyu Liu, aka David W. Liou, a former research scientist at Dow Chemical Company in Louisiana, was sentenced in the Middle District of Louisiana to 60 months in prison, two years supervised release, a $25,000 fine and was ordered to pay $600,000 in restitution. Liu was convicted on February 7, 2011 of one count of conspiracy to commit trade secret theft for stealing trade secrets from Dow and selling them to companies in China, and he was also convicted of one count of perjury. According to the evidence presented in court, Liu came to the United States from China for graduate work. He began working for Dow in 1965 and retired in 1992. Dow is a leading producer of the elastomeric polymer, chlorinated polyethylene (CPE). Dow’s Tyrin CPE is used in a number of applications worldwide, such as automotive and industrial hoses, electrical cable jackets and vinyl siding. While employed at Dow, Liu worked as a research scientist on various aspects of the development and manufacture of Dow elastomers, including Tyrin CPE. The evidence at trial established that Liu conspired with at least four current and former employees of Dow’s facilities in Plaquemine, Louisiana, and in Stade, Germany, who had worked in Tyrin CPE production, to misappropriate those trade secrets in an effort to develop and market CPE process design packages to Chinese companies. Liou traveled throughout China to market the stolen information, and he paid current and former Dow employees for Dow’s CPE-related material and information. In one instance, Liou bribed a then-employee at the Plaquemine facility with $50,000 in cash to provide Dow’s process manual and other CPE-related information. The investigation was conducted by the FBI.