Corning Watch: Corning sues over theft of trade secrets

Date: 1 August 2011
At the heart of Corning Inc.'s technological and financial success with liquid crystal display glass is a manufacturing technique the company invented.

A lab technician handles display glass in the Dimensional Stability Lab at Corning Inc.'s Sullivan Park facility in Erwin. / PHOTO PROVIDED

It's called the fusion draw process. In it, two streams of hot glass overflow their containers and merge to form the pristine surface necessary for modern electronic devices.

Unfortunately, preventing other companies from obtaining the details of the fusion draw process has become problematic.

That became clear last week when Corning Inc. notified the federal Securities and Exchange Commission that it was filing lawsuits in China and Korea for theft of fusion draw trade secrets.

Protecting intellectual property has been particularly difficult for Corning Inc. in China. After Corning began selling optical fiber in the People's Republic, counterfeit fiber hit the market.

Now, Corning Inc. is accusing Hebei Dongxu Investment Group Ltd., a 7-year-old Chinese company, of stealing secrets used in the production of glass for computer, smartphone and television displays.

Corning filed suit July 18 against the company in Beijing Second Intermediate People's Court.

On the same day, the Twin Tiers' largest employer -- along with its partner Samsung Corning Precision Materials Corp. -- filed suit against the same company and three individuals in Korea's Daejeon District Court.

That suit also alleges theft of company secrets used in the production of liquid crystal display glass. Two of those named in the suit were convicted in 2009 of similar charges brought by Corning.

In both cases, Corning Inc. is seeking unspecified monetary damages and a restraining order preventing Hebei Dongxu from using, disclosing or permitting others to use Corning manufacturing technology.

The new lawsuits come only five months after a California man was sentenced by a federal judge in Rochester to 30 months in jail on similar charges.

Yeong C. Lin, 71, pleaded guilty in February to conspiracy to commit theft of trade secrets.

Lin admitted that he was seeking information on the fusion draw process for a Taiwanese company that wanted to compete with Corning Inc. in the liquid crystal display glass market.

That case began in 1999, when a Corning Inc. employee in Harrodsburg, Ky., stole documents on the fusion draw process and offered them for sale.

Lin put that employee, Jonathan Sanders, in touch with PicVue Electronics in Taiwan. Sanders sold the documents to PicVue for $34,000. Their value was estimated at $60 million to $80 million.

Sanders was sentenced to four years in jail and fined $20,000. Corning Inc. sued PicVue, got its documents back and accepted a $1.5 million settlement.

PicVue later went bankrupt, but the new lawsuits indicate that Corning Inc. still faces challenges in protecting proprietary manufacturing data.

The Corning Watch column offers analysis of news involving Corning Inc. Contact Larry Wilson in care of Star-Gazette, P.O. Box 285, Elmira, NY 14902; or by e-mail at Corning Watch appears Sundays.

600450 Corning Watch: Corning sues over theft of trade secrets
Date: 1 August 2011

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