Ineos sues Chinese petrochem giant over IP infringement

ERJ staff report (PN)

Rolle, Switzerland – Ineos, the world’s fourth largest petrochemicals group, is suing Chinese state-owned oil and petrochemical giant Sinopec, accusing it of violating intellectual property agreements and misusing trade secrets to build acrylonitrile factories, reported Steve Toloken for Plastics News.

Ineos said in a strongly-worded 21 March statement that it feared “major harm” to its global $3bn (€2.18bn) acrylonitrile business, which it said generates $500m (€363m) in profits 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,” said Ineos chairman Jim Ratcliffe. "But in this case, we have to take action to protect the interests of our stakeholders.

“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 had 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”.

But in its statement Switzerland-based Ineos said Sinopec’s Ningbo Engineering had “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's 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 fibre used to manufacture the new Boeing 787 Dreamliner aircraft.

The company said “the prolific building of acrylonitrile plants in China will destroy its 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 had “every confidence” in China’s intellectual property system because the country files more patents than any other country, it added.

One chemical industry consultant who has experience working 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, who requested anonymity.

The US Environmental Protection Agency’s website said: “Acrylonitrile is primarily used in the manufacture of acrylic and modacrylic fibres. It is also used as a raw material in the manufacture of plastics (acrylonitrile-butadiene-styrene and styrene-acrylonitrile resins), adiponitrile, acrylamide, and nitrile rubbers and barrier resins.”