Ineos sues Sinopec for trade secret violations, fears 'major harm' to its acrylonitrile business

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: March 21, 2014 12:15 am ET
Updated: March 21, 2014 10:04 am ET

Image By: Ineos Ineos Chairman Jim Ratcliffe

Related to this story

Topics Materials, Legal, China, Materials Suppliers

Ineos Group AG is suing Chinese state-owned oil and petrochemical giant Sinopec, accusing the Chinese company of violating Ineos intellectual property and misusing trade secrets to build acrylonitrile factories.

Ineos said in a strongly-worded March 21 statement that it fears “major harm” to its global $3 billion acrylonitrile business, which it said generates $500 million in profit a year for the company and supports 5,000 jobs.

“We have good and valuable relationships with Sinopec and other Chinese companies across our business. But in this case, we have to take action to protect the interests of our stakeholders,” said Ineos Chairman Jim Ratcliffe. “The fundamental value of Ineos depends upon its technology. We have no option but to defend our hard-won intellectual property."

Sinopec has had a license to use Ineos acrylonitrile technology since 1984, according to the Ineos statement.

The Chinese company told the Financial Times newspaper that it has also successfully developed its own acrylonitrile catalyst and related technology at its research labs in Shanghai over the last 50 years and said it had “full proprietary intellectual property rights.”

One chemical industry consultant with experience with both Chinese and Western firms said it can be common for companies like Sinopec to feel they have made improvements in the technology that fall outside the original license. That could be a key issue to be debated in court, the consultant said, speaking anonymously.

In its statement, Rolle, Switzerland-based Ineos, however, said Sinopec’s “Ningbo Engineering Co. has broken a long-established technology agreement which, together with trade secret misuse by other Sinopec companies, has enabled development of a series of new world scale acrylonitrile plants without Ineos agreement or consent.”

Ineos said its acrylonitrile technology provides the basis for over 90 percent of world production for the chemical, which is a building block of ABS plastic and the carbon fiber used to manufacture the new Boeing 787 Dreamliner aircraft.

The Swiss company said “the prolific building of acrylonitrile plants in China will destroy [our] business.”

“We want to take our best technology to China but we need to know that it will be protected,” Ratcliffe said.

The company said it filed suit in the Beijing High Court and is pursuing a parallel arbitration case in Sweden. It said it has “every confidence” in China’s intellectual property system because the country files more patents than any other country.

Ineos, the world’s fourth-largest chemical company, manufactures acrylonitrile at two facilities in the United States and one each in the United Kingdom and Germany.

Ineos may be walking a bit of a fine line commercially with the lawsuit, as the two companies are intertwined in investments and business deals in China.

They broke ground last year on a 50/50 joint venture to build a phenol acetone plant in Nanjing, a $500 million investment that Ineos said is its largest to date in China. As well, Sinopec licenses Ineos technology in polypropylene and high density polyethylene.


Comments

Ineos sues Sinopec for trade secret violations, fears 'major harm' to its acrylonitrile business

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: March 21, 2014 12:15 am ET
Updated: March 21, 2014 10:04 am ET

Post Your Comments


Back to story


More stories

Image

2014 leaves some resin firms in the black while others struggle

January 23, 2015 2:37 pm ET

On the financial side, 2014 was good for Hexcel Corp., so-so for Celanese Corp. and it could have been better for Omnova Solutions.    More

Image

Clariant's ColorForward predicts future consumer trends

January 23, 2015 1:33 pm ET

Clariant International Ltd. is marking a decade of color forecasting with the 10th edition of its ColorForward program.    More

Image

The future for PolyOne is colorful

January 23, 2015 1:28 pm ET

PolyOne Corp. is writing four color stories for 2016.    More

Image

Mexico's Polymer Solutions looks to grow, expand offerings with name change

January 23, 2015 12:03 pm ET

British biodegradable additives developer Symphony Environmental Technologies plc's Mexico distributor has changed its name from Plásticos...    More

Image

Drop in oil leads to resin pricing plunge

January 22, 2015 3:16 pm ET

In most Decembers, resin makers try to focus on the holidays and on spending time with their families. This improves their mental well-being and also ...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events