Thursday, July 2, 2009

China corporate spy case paints outside the numbers

He booked a one-way flight from Chicago to Shanghai, stashing in his carry-on bag a computer thumb drive with 214 documents from the company he had just quit.

Before he could leave for the airport, the FBI raided his Arlington Heights apartment, seizing a half-dozen computers, a dozen external hard drives, 13 additional thumb drives and a pair of PlayStations capable of storing data.

If he didn't know it before the raid, David Yen Lee found out the hard way as the handcuffs went on: Paint is serious business. Yes, paint.
The 52-year-old Taiwan native faces a five-count indictment alleging theft of trade secrets from Valspar Corp., a publicly traded maker of household paint and other coating products. He has yet to enter a plea, and his attorney declined to comment.

The case highlights the growing problem of economic espionage, and the difficulties of protecting intellectual property from competitors in China. Hard times have ratcheted up the pressure to take all available shortcuts for obtaining new business, noted Anthony Dayrit, an equity analyst at Morningstar Inc. who follows Valspar.

"It's a matter of trying to get those sales volumes," he said. "If that means stealing trade secrets, I guess that works for some people."


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