DATE : 2014-03-21
Ineos announced today that it is taking legal action against Sinopec and Sinopec subsidiaries, including Sinopec Ningbo Engineering Co. (SNEC), for breach of contract and/or misuse of trade secrets. Ineos says that SNEC has broken a long-established technology agreement which, together with trade secret misuse by other Sinopec companies, has enabled development of a series of world-scale acrylonitrile plants without Ineos’s agreement or consent. Ineos says it fears that these breaches of rights will cause major harm to its acrylonitrile business which generates up to $500 million/year of profit and has a replacement value of $3 billion. Ineos is pursuing parallel actions in the Beijing High Court and through arbitration in Sweden.
“We have good and valuable relationships with Sinopec and other Chinese companies across our business," says Jim Ratcliffe, chairman of Ineos. "But in this case, we have to take action to protect the interests of our stakeholders. The fundamental value of a business like Ineos depends on its intellectual property which includes trade secrets and patents, covering technology, design and operations. Unless we protect our intellectual property, ultimately we will see the demise of Ineos.”
Sinopec has denied the charge. The company told Reuters that its subsidiary Shanghai Research Institute of Petrochemical Technology has developed what became a core technology after 50 years of research. "Sinopec has full proprietary intellectual property rights over such technology. There is no ground for the infringement alleged by Ineos," the company told Reuters.
Ineos says it cannot comment on the detail of Sinopec's counter argument and says that this will be at the heart of the issues that will be debated in the Chinese courts and in the Swedish arbitration. "Our legal action concerns the technology used in a recently commissioned 130,000-m.t./year acrylonitrile plant at Anqing. This plant claims to use Sinopec's own acrylonitrile technology. However, Ineos has evidence that Anqing is using specific Ineos technology without any license from Ineos," the company says. "Sinopec is also in the process of building a number of other large scale acrylonitrile plants, again, without any technology license from Ineos. It has recently become apparent to Ineos that SNEC has laso been at the heart of many of Sinopec's recent acrylonitrile projects in China," Ineos adds.
"SNEC has been the sole engineering firm used by Ineos in acrylonitrile licensing in China for 30 years. SNEC's entire prior knowledge of designing and constructing acrylonitrile plants has been obtained as a result of this relationship. They have agreed to work exclusively on Ineos's secret and patented acrylonitrile technology," Ineos says. Ineos recently announced plans to jointly build a phenol plant with Sinopec and an acrylonitrile plant with Tianjin Bohai. Ineos says its acrylonitrile technology provides the basis for over 90% of the world’s production.
SOURCE Chemweek's Business Daily