First off, don’t worry, Coca-Cola’s super-secret trade secret recipe is still safe.  But on April 22, 2021, a jury in the Eastern District of Tennessee convicted a former Coca-Cola employee, Dr. Xiaorong (a/k/a Shannon) You, of stealing trade secrets related to BPA-free coatings for the inside of beverage cans for the Chinese Government. The Indictment alleged that the trade secret information cost almost $120 million to develop. The twelve-day in-person trial focused not just on the former employee’s wrong doing, but also on some the best practices Coca-Cola and Eastman Chemical Company used to protect the trade secrets at issue.

Dr. You worked as a Principal Engineer for Global Research at Coca-Cola from 2012 to 2017, where she had access to the BPA-free related trade secrets. According to the Indictment, before departing from Coca-Cola, You opened files containing trade secrets on her computer and took photos of her desktop to bypass Coca-Cola’s security measures. She also transferred other trade secret information to an external hard drive.

After leaving the Coca-Cola company, Dr. You worked for Eastman Chemical Company, where she was employed until June 2018 as an application development manager. In this position, Dr. You had access to Eastman Chemical Company’s BPA-free related trade secrets. Shortly before the end of her employment, Dr. You uploaded more trade secret documents to her Google drive account.

Dr. You was arrested on February 14, 2019, and her trial began in April 2021. According to prosecutors, Dr. You planned to share the trade secrets with a Chinese corporate partner and start her own coating company in China, and intended to benefit the Chinese Communist Party and the Chinese Government. The jury agreed and convicted You of conspiracy to commit economic espionage and to steal trade secrets, possession of stolen trade secrets, economic espionage, and wire fraud.

Notably, Dr. You and one of her co-conspirators received millions of dollars in grants from the Chinese government for the actions leading to her conviction, including from a “Thousand Talents Program.” As previously discussed, the FBI has indicated that such programs “usually involve undisclosed and illegal transfers of information, technology, or intellectual property that are one-way and detrimental to U.S. institutions.” Dr. You awaits sentencing this November.

Dr. You’s conviction also underscores the importance of using a combination of best practices to prevent and address unauthorized trade secret disclosures.  Prosecutors noted that both Coca-Cola and Eastman Chemical Company limited access to the BPA-free trade secret formulas to just a subset of their employees.  Unfortunately, as a senior engineer with BPA-free coatings experience, Dr. You was among that subset of employees.  Prosecutors also noted that Coca-Cola trained its employees to protect trade secrets in its possession.

Companies should combine these steps with additional best practices to better safeguard their trade secrets.  For example, in addition to training employees to report suspicious behavior, companies should create a detailed response plan for quickly addressing potential unauthorizes disclosures.  In addition, companies should draw on their HR, IT, and legal departments to create cross-departmental teams capable of quickly executing on such plans.