POSCO denies CRGO technology theft from Nippon Steel

The Yomiuri Shimbun reported that POSCO denied that it has stolen trade secrets of Nippon Steel & Sumitomo Metal Corp's steel sheet technology in the first oral proceeding of a trial at the Tokyo District Court.

As POSCO denied the accusation of theft of trade secrets and demanded the suit be rejected, it demonstrated its intent to squarely fight the Japanese firm in court.

POSCO countered in a written statement to the court that the allegation of theft is groundless.

Regarding the confession of the former POSCO researcher to theft of Nippon Steel Corp.'s proprietary technology, the company said, "It isn't worth believing." In 2007, the POSCO researcher was arrested by South Korean prosecutors on suspicion of leaking POSCO's grain-oriented electrical sheet technology to China's Baosteel Group Corp. The researcher confessed at that time the technology he sold to the Chinese firm belonged to Nippon Steel Corp. His sentence, three years in prison suspended for five years, was finalized by a South Korean court in October 2008.

Nippon Steel & Sumitomo Metal has demanded JPY 98.6 billion in compensation for damages and an injunction to stop the manufacture and sale of products using the technology, alleging the South Korean company lured four former employees to illegally pass along the Japanese firm's technology to POSCO for huge rewards. The case was filed under the Unfair Competition Prevention Law.

When it filed the suit in April, Nippon Steel Corp. said the technology involves "trade secrets" it had spent more than 40 years developing and improving. The alleged theft was revealed when a former researcher of POSCO was arrested and indicted in the period from 2007 to 2008 by prosecutors in South Korea on charges of leaking corporate secrets to a Chinese steel firm. The researcher had confessed the technology he sold belonged to Nippon Steel.

According to the indictment for Thursday's trial, Nippon Steel & Sumitomo Metal have alleged that POSCO has been stealing the company's technological information at least since 1987 by promising huge rewards to four former employees of then Nippon Steel Corp., or by concluding a technology provision contract with a steelmaking equipment firm established by one of the four former employees via POSCO's Japanese arm.

The technology in question is for manufacturing grain oriented electrical steel sheets.

Source - The Yomiuri Shimbun