Intellectual Property Law Knowledge Center

Theft of DuPont Trade Secrets Leads to Guilty Verdict Against Two in $28 Million Conspiracy

March 6th, 2014

In recent years, the U.S. Department of Justice (DOJ) has been much more aggressive in investigating and prosecuting federal criminal trade secret matters. This trend continued Wednesday, when a federal jury in California found Mr. Walter Liew and his company, USA Performance Technology Inc., guilty of conspiracy to commit economic espionage and possession of trade secrets. The jury further found Mr. Liew personally guilty of tampering with witnesses and evidence, filing false tax returns, and making false statements in bankruptcy proceedings. Mr. Robert Maegerle, an engineer hired by Mr. Liew from DuPont Co., was found guilty of conspiracy to steal trade secrets, conveying trade secrets, attempted trade-secrets theft, and tampering with witnesses and evidence.

Years ago, Mr. Liew hired Mr. Maegerle to aid USA Performance Technology to build plants to safely produce large amounts of titanium dioxide, a subject Mr. Maegerle learned a great deal about while at DuPont. While USA Performance Technology did not use DuPont’s factory plans exactly, they were used as a starting point from which new plans could be developed. From this information, USA Performance Technology generated nearly $28 million.

Mr. Maegerle believed he was free to share this information because, after leaving DuPont in 1991, he believed the confidentiality agreement he signed was only good for five years. He further believed the information has been in the public domain for decades, particularly since DuPont sold it to Sherwin Williams Co. in the 1970s.

Mr. Liew was ordered directly into custody, while Mr. Maegerle was released. The two are scheduled to be sentenced June 10. The Federal Sentencing Guidelines apply, and given a $28 million conspiracy, it is inevitable that the defendants will be given significant jail time.

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