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Avery Dennison Awarded $40 Million in Trade Theft

February 05, 2000|From Bloomberg News

CLEVELAND — A jury Friday awarded Avery Dennison Corp. at least $40 million in damages from a Taiwanese rival that stole trade secrets from the Pasadena-based adhesives maker.

Jurors in federal court in Cleveland deliberated nearly seven hours before finding officials of Taiwan-based Four Pillars Ltd. liable for bribing a senior research engineer at Avery Dennison to get access to confidential information about adhesive formulas and label technology.

Jurors awarded Avery Dennison $10 million in compensatory damages and $30 million in punitive damages over the thefts.

P.Y. Yang, Four Pillars' chief executive, and his daughter, Hwei Chang "Sally" Yang, were convicted in April of violating the U.S. Economic Espionage Act by paying the Avery Dennison employee to pilfer company secrets. P.Y. Yang was sentenced to six months of home detention on the criminal charges and Sally Yang was sentenced to probation.

Those convictions came in the first case tried under the law designed to protect U.S. companies from trade secret thefts by foreign governments or business rivals.

Four Pillars lawyers maintained during the trial that the Avery Dennison material passed to the Taiwanese company didn't qualify as trade secrets.

"I don't think the verdict comports with the evidence," William Bittman, a Washington lawyer representing Four Pillars, said after the verdict was announced. "They [jurors] should have been required to state which trade secrets were misappropriated."

During the two-week civil trial, jurors heard testimony that Avery Dennison engineer Teng Hong "Victor" Lee stole more than 12,000 research and development documents outlining the company's adhesive formulas and other proprietary information at the behest of P.Y. Yang, who wanted to gain an advantage in the Asian adhesives market.

Jurors also watched a videotape made by FBI agents that showed P.Y. Yang clipping Avery Dennison logos and confidential stamps off documents turned over by Lee.

Lee helped set up the sting while cooperating with the government. News of the decision came after the markets closed in New York. Avery Dennison shares closed up $1.06 at $67.13 on the New York Stock Exchange.

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