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DuPont Trade Secrets Case Heads to Trial

The Recorder

An immigrant businessman. A powerful U.S. corporation. And the secret to making everyday products from paper to paint a bright, luminous white. Those are the elements of a high-stakes trial beginning this week in San Francisco federal court, where combustible racial politics and the strained relations between the U.S. and China are inextricably linked to economic espionage charges levied against an East Bay engineer.

Walter Liew, a U.S. citizen of Chinese descent, is accused of stealing valuable manufacturing secrets from the industrial giant DuPont and selling them to entities controlled by the Chinese government. But Liew's lawyers at Keker & Van Nest insist their client carried out nothing more than routine business deals in China¬—a far cry from the spy narrative offered up by federal prosecutors.

It's among the first economic espionage cases to go to trial. And with the U.S. government determined to crack down on what it sees as pervasive domestic spying by China, the politics of the prosecution have been somewhat fevered since the Justice Department announced the charges in a three-page press release.

To make their case against Liew, assistant U.S. attorneys Peter Axelrod and John Hemann will have to prove that DuPont's processes were bona fide trade secrets. Although the technology dates back to the 1940s, federal prosecutors argue that DuPont continued to hone its process for manufacturing titanium dioxide and guarded it closely. Unable to come up with another viable method, China was forced to import titanium dioxide from the West as manufacturing boomed.

Prosecutors allege that Chinese officials enlisted Liew to help them develop the titanium dioxide on their own in 1991. Nearly two decades later, he won a contract to build a manufacturing plant in Chongqing that would have been one of the largest of its kind in the world, according to court papers. His plan was based on secrets pilfered from DuPont, prosecutors contend.

But Liew's lawyers will tell jurors DuPont's techniques—decades-old and detailed in public sources like patents—were already common knowledge in the industry. When Liew and Maegerle signed on to work with the Pangang Group, their aim was to help the companies build a factory using information in the public domain, argues the team at Keker, which includes associates Simona Agnolucci and Katherine Lovett.

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Stuart Gasner
Mr. Gasner centers his practice in the areas of white collar criminal and securities defense, intellectual property litigation and complex corporate disputes. A federal prosecutor before joining Keker & Van Nest, Mr. Gasner has tried more than 25 cases to verdict before juries across the United States.

Simona Agnolucci
Ms. Agnolucci specializes in high-stakes complex litigation, including intellectual property matters, securities cases, white collar criminal defense and commercial disputes. Her clients have included medical device manufacturers, brokerage companies, investment advisors, smartphone manufacturers, and leading law firms. Ms. Agnolucci has been an active member of several trial teams in both state and federal courts.

Katherine Lovett
Prior to joining Keker & Van Nest, Ms. Lovett served as a law clerk, and as an intern for the Missouri State Public Defender’s office, the Fair Trial Initiative, and the Southern Center for Human Rights. In these roles, she learned how to weave legal theory into narratives which could persuade both jurists and the general public.