On the evening of August 9, Luxi Chemical issued an announcement. The company recently received the “Civil Ruling” delivered by the Liaocheng Intermediate People’s Court, which ruled that the arbitration institution of the Swedish Stockholm Chamber of Commerce recognized the company’s violation of the law on November 7, 2017. The arbitration award was made under the “Low Pressure Oxo Synthesis Technology Non-Use and Confidentiality Agreement” signed by Xinwanfeng Davie Technology Co., Ltd. (“Davie”) and Dow Global Technologies Co., Ltd. (“Dow”).
The company’s deputy general manager Zhang Lei responded to the judgment on behalf of the company on the evening of August 9. He said that
The company respected the civil ruling made by the Municipal Intermediate Court and would fulfill its compensation obligations in accordance with the procedures. However, the company did not infringe on the other party’s intellectual property rights. It was only due to lack of experience in international cooperation in the early years. The confidentiality agreement was violated and a huge price was paid, and lessons will be learned in the future.
The compensation amount accounted for nearly 30% of the net profit in the first half of the year
The civil ruling of the Liaocheng Intermediate People’s Court means that the arbitration award made by the Swedish Stockholm Chamber of Commerce Arbitration Institution has the same legal effect as the effective judgment made by the People’s Court of the People’s Republic of China, and will then enter the execution stage.
According to the arbitration award, the company should compensate various expenses totaling approximately RMB 749 million. The company stated that the actual compensation amount shall be subject to the amount finally calculated and approved by the applicant and the company. Subsequent compensation payments will have a greater impact on the company’s profits for the current period.
According to the company’s disclosed 2021 semi-annual report, the company achieved a net profit attributable to the parent company of 2.632 billion yuan in the first half of 2021, and the compensation amount of 749 million yuan accounted for nearly 10% of the company’s net profit in the first half of the year. Thirty percent.
The company stated that the arbitration only imposed an injunction on the unbuilt fourth polyol plant (i.e., subsequent unbuilt units) and did not prevent the operation of the three already built plants. Therefore, the Liaocheng Intermediate People’s Court’s ruling to recognize the arbitration award involved in the case will not have an impact on the production and sales of the company’s three currently operating polyol factories (i.e., the company’s currently operating three production units). In addition, since the device involved is only polyol, the company’s other main product production and project construction will not be affected.
The company believes that there is no intellectual property infringement
It is understood that the matters involved in this ruling Dating back to 2010. Zhang Lei said that the company planned to build a butyl-octanol project at that time, and conducted research for this purpose. During the research process, it contacted a number of suppliers of butyl-octanol production technology, including David/Dow and Sichuan University.
In the end, David/Dow proposed a technology license fee quotation of 80 million yuan per set of butanol unit with an annual output of 250,000 tons to Luxi Chemical, and also needed to purchase The cost of the designated manufacturer’s proprietary equipment is approximately 200 million yuan. Luxi Chemical believed that the price was too high and failed to reach cooperation with Davie/Dow. Instead, it chose the water-based catalyst technology of Sichuan University whose price was far lower than Davie/Dow.
After the company’s project was completed, David and Dow used its confidential technical information in the company’s butanol unit in November 2014, violating the “Low Pressure Oxo Synthesis Technology” Arbitration was initiated at the Stockholm Chamber of Commerce Arbitration Institution on the grounds of “non-use and confidentiality agreement” and a huge claim was made against the company.
The reason why the company ultimately lost the lawsuit, Zhang Lei analyzed, was mainly because during the business negotiation process with David and Dow in 2010, the company signed the “Low Pressure Oxo Synthesis” at the request of the other parties. Technology Non-Use and Confidentiality Agreement. The scope of confidential information stipulated in the agreement is very broad, and it is stipulated that if the information legally obtained by Luxi Chemical from the public domain or a third party contains confidential information, Luxi Chemical must also obtain David/ Dow’s written consent, otherwise it will be regarded as a violation of the confidentiality agreement; however, since David/Dow has never provided relevant confidential information to Luxi Chemical, Luxi Chemical has no way of knowing whether the information obtained from the public domain or a third party contains confidential information. Information content cannot be obtained from David/Dow in advance.
Zhang Lei particularly emphasized that Luxi Chemical attaches great importance to intellectual property protection when communicating with partners. Regarding the issues involved in this arbitration, the company also has no intellectual property infringement issues. . He introduced that the water-based technology of Sichuan University used in the company’s butanol unit is fundamentally different from the oil-based catalyst technology of Davie/Dow. Davie/Dow claimed that Luxi Chemical used its confidential technical information, which is inconsistent with the facts.
In addition, during the business negotiations between Luxi Chemical and Davie/Dow, Davie/Dow only provided or displayed some products for promotional and marketing purposes to Luxi Chemical. materials and information, but does not provide any confidential technical information. </p
