Couple ordered to pay $10 million for stealing trade secrets

ST. LOUIS (AP) – A judge has ordered a former employee of a mid-Missouri tech firm and his wife to pay $10 million for stealing trade secrets and partnering with a Chinese firm to sell knockoff products to unsuspecting buyers, including the U.S. Navy.

Franklin County Associate Circuit Judge Robert Schollmeyer this month awarded Rolla-based Brewer Science $8.4 million in punitive damages and $1.6 million in compensatory damages to cover the company’s lost profits and research and development costs due to the actions of Brewer Science engineer Hai Xuan and his wife, Hong Sheng, along with the company they formed, Best Tools LLC.

Brewer Science makes coatings used for microchips, along with spin coater machines, which apply thin uniform films to flat substrates. The judge determined that the couple partnered with a Chinese manufacturer to make and distribute spin coater machines that used Brewer Science technology and was in direct competition with the company.

In 2013, the Department of the Navy awarded a $5,580 contract to Best Tools LLC for “Laboratory Equipment and Supplies,” according to a website that tracks government contracts.

Foreign intellectual property theft “is a threat to American innovation, entrepreneurship, and jobs,” said Alan Gerson, Brewer Science’s chief legal officer. He urged lawmakers and police “to do more to address this issue and help American companies who have been victimized.”

The couple’s whereabouts are uncertain. Xuan has no listed phone number, and a message left with Sheng was not returned. The phone at Best Tools LLC has been disconnected. Court documents didn’t list attorneys for them, and they did not appear at the court hearing.

Brewer Science spokeswoman Loretta Wallis said Wednesday that actually getting the money is a challenge since the couple may have left the country.

“Because this is an international issue, it makes it very difficult to collect the funding,” Wallis said.

In addition to the financial award, Schollmeyer entered a permanent injunction prohibiting Xuan, Sheng and Best Tools LLC from making or distributing knockoff products.

Meanwhile, Brewer Science said it has asked the U.S. government to take further action against the Chinese firm since it continues to produce and sell items using Brewer Science technology.