Former Coca-Cola Scientist Is the Latest to Be Indicted in U.S. Crackdown on China-Related IP Theft

February 15, 2019, 11:33 AM UTC

Another week, another China-linked case about intellectual property theft. This time, U.S. authorities have charged a Chinese-born, Michigan-based engineer—a former Coca-Cola employee—with the attempted theft of trade secrets valued at almost $120 million.

You Xiaorong, also known as Shannon You, worked as a principle engineer for global research at an unnamed Atlanta company from 2012-2017, the Justice Department said Thursday. Coca-Cola told the Wall Street Journal that it was the company in question.

At Coke, You had access to trade secrets regarding the development of new coatings for the inside of cans and other containers, that were free of bisphenol-A (BPA)—a coating that was used for a long time but that is now known to have harmful effects. She then went on to work for a packaging company in Tennessee where she also had access to trade secrets.

According to the indictment, she then took trade secrets to China, in order to give them to a state-backed company there. U.S. prosecutors—who have recently lobbed intellectual property theft charges at Huawei and a Chinese former Apple employee—said this formed part of a pattern.

In the context of the U.S.-China trade war, which is partly about the issue of IP theft, it is now beyond doubt that the Justice Department is trying to send China a message.

“The conduct alleged in today’s indictment exemplifies the rob, replicate and replace approach to technological development,” said Assistant Attorney General John Demers. “Unfortunately, China continues to use its national programs, like the ‘Thousand Talents,’ to solicit and reward the theft of our nation’s trade secrets and intellectual property, but the Justice Department will continue to prioritize investigations like these, to ensure that China understands that this criminal conduct is not an acceptable business or economic development practice.”

You wasn’t the only one charged in this case—so were Chinese national Liu Xiangchen and an unnamed third co-conspirator. Liu apparently manages the Chinese company that would have manufactured products based on the allegedly stolen secrets, and paid You with money and part-ownership of a new company that would have “owned” the secrets.