Industrial Espionage Gets Valspar Chemist 15 Months

The damage to paint manufacturer Valspar was up to$20 million, but chemist thief David Yen Lee only got 15 months in Federal prison under a sentence handed down by U.S. District Judge Robert Gettleman. Almost forgot, Lee has to repay the $31,000 that it cost Valspar to figure out he was a thief.


CHICAGO — A former chemist for a northwest suburban paint manufacturing company was sentenced today to 15 months in federal prison for stealing trade secrets involving numerous formulas and other proprietary information valued up to $20 million as he prepared to go to work for an overseas competitor.

vvalsDavid Yen Lee, formerly a technical director in Valspar Corp.’s architectural coatings group since 2006, pleaded guilty in September to using his access to Valspar’s secure internal computer network to download approximately 160 original batch tickets, or secret formulas for paints and coatings.

He also obtained raw materials information, chemical formulas and calculations, sales and cost data, and other internal memoranda, product research, marketing data, and other materials from Valspar’s offices in Wheeling.

Lee, 54, formerly of Arlington Heights and currently of Jersey City, N.J., was sentenced by U.S. District Judge Robert Gettleman, who also ordered mandatory restitution of $30,975 to reimburse Valspar for the costs of its internal investigation. Lee was ordered to begin serving the sentence next year.

Lee admitted that between September 2008 and February 2009, he had negotiated employment with Nippon Paint, located in Shanghai, China. On Feb. 27, 2009, Lee accepted employment with Nippon as vice president of technology and administrator of research and development beginning on April 1, 2009, in Shanghai. Lee was scheduled to fly from Chicago to Shanghai on March 27, 2009. He did not inform Valspar that he had accepted a job at Nippon until he resigned on March 16, 2009.

At Valspar, Lee’s duties included scouting new paint technologies, coordinating with other paint laboratories, coordinating staffing and projects with Huarun Limited, a Valspar subsidiary located in China, and overseeing Valspar’s technical service group, which conducted experiments for paint coloring.

Between November 2008 and March 2009, Lee downloaded technical documents and materials belonging to Valspar, including the paint formula batch tickets. He further copied certain downloaded files to external thumb drives to store the data, knowing that he intended to use the confidential information belong to Valspar for his own benefit.

The total value of the trade secret information Lee took was estimated at between $7 million and $20 million. There was no evidence that he actually disclosed any of the stolen trade secrets.

The sentence was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The government was represented by Assistant U.S. Attorney Jessica Romero.


Industrial Espionage Gets Valspar Chemist 15 Months — 2 Comments

  1. Ahhhhhh thank you Cal – you wrote a great article about intellectual property

    yes, I am still here, and I watch with interest

    God Bless.

  2. Correction – Cal reposted a Department of Justice press release.

    Credit where credit is due

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