Time Line: Fighting Intellectual Property Theft

A former employee of St. Jude Medical was found guilty of stealing trade secrets from his employer and using them to set up a rival medical device company, Nervicon. Yongning Zou, a former hardware design engineer with Pacesetter, St. Jude’s cardiac rhythm management division, allegedly stole documents relating to a crystal oscillator unique to St. Jude’s products. Zou left St. Jude in June 2009 and became a shareholder in Nervicon, a China-based medical device business. On April 22, 2011, a California jury awarded a total a total of $1.47 billion against Zou for theft of trade secrets and an additional $868 million against Nervicon.

Mike Tyson’s tattoo artist filed suit against Warner Bros. Entertainment weeks before The Hangover Part II’s May 26, 2011, opening, alleging that the movie’s use of his design, which was tattooed on the face on one of the movie’s characters was copyright infringement. S. Victor Whitmill claimed that since he owned copyrights to the “artwork on 3-D,” as he called it, the use of his design in the movie and in advertisements without his consent should be considered infringement. On May 24, 2011, Chief Judge Catherine D. Perry of the United States District Court for the Eastern District of Missouri denied an injunction on the movie’s release but felt Whitmill did in fact have a case. On June 17, Warner Bros. and Whitmill settled for undisclosed terms.

Carter Bryant was working for Mattel when he allegedly came up with the idea for Bratz, a line of fashion dolls and merchandise manufactured by MGA Entertainment. The Bratz brand proved successful for MGA and was blamed for a 30% decrease in U.S. sales of Barbie dolls. In April 2005, MGA sued Mattel, claiming that their newer line of “My Scene” Barbie dolls were clear replications of the Bratz dolls look. Mattel then sued MGA for $500 million, claiming that Bryant created Bratz while he was working at Mattel. With both sides claiming the other stole trade secrets, the parties returned to court in January 2011. On April 21, 2011, a federal jury returned a verdict supporting MGA. On August 5, 2011, Mattel was ordered to pay MGA $310 million for attorney fees, stealing trade secrets and false claims.

In February 2009 DuPont sued Kolon Industries for stealing trade secrets concerning Kevlar, a high-strength synthetic fiber used in body armor. The suit alleged that Michael Mitchell, a former DuPont employee who worked at Kolon, had “retained certain highly confidential information on his home computer” that he illegally passed to his new employer. Mitchell pleaded guilty to theft of trade secrets and was sentenced to 18 months. On September 14, 2011, a civil court awarded Dupont damages of $919.9 million, and this October, a U.S. grand jury charged Kolon and five company executives with trade secret theft in an effort to take at least $226 million in assets from Kolon, a sum that represents the gross proceeds of the company’s sale of Heracron, the only direct competitor of Kevlar.

Xiaorong Wang, a former employee at Bridgestone Center for Research and Technology in Akron, Ohio, was charged with eight counts of theft of trade secrets and seven counts of making false statements to federal agents. The indictment against Wang alleges that, in April 2010, he stole Bridgestone’s proprietary trade secret information involving various projects and formulas related to rubber and other polymer-related projects. Wang was also charged with making false statements to FBI agents regarding, among other things, his alleged intention to accept employment at Suzhou University in China to establish a rheology polymer center. Wang’s case is pending.