Pangang Group Summons Blocked in U.S. Trade Secrets Case

China’s Pangang Group Co., facing criminal allegations by the U.S. that it conspired to steal secrets about titanium dioxide technology from DuPont Co. (DD), won a court ruling that prosecutors failed to serve a summons.

U.S. District Judge Jeffrey S. White in San Francisco rejected prosecutors’ arguments that they had properly served the company and three of its units with court papers.

“The United States has still not met its burden to show it has satisfied the delivery requirement,” White said today in an 11-page ruling.

Pangang runs the largest titanium complex in China and is one of the country’s biggest titanium pigment producers, according to its website.

Pangang, a California businessman and two former DuPont employees were charged last year with conspiring to steal information about chloride-route titanium dioxide, a white pigment used in paint, plastics and paper.

The U.S. defendants sold the confidential information to Pangang so it could develop a large-scale factory in Chongqing, prosecutors alleged. DuPont, based in Wilmington, Delaware, is the world’s largest manufacturer of titanium dioxide, and won’t sell or license its technology to Chinese companies.

The U.S. encountered difficulty delivering notice of the charges to the corporate defendants, leading the court to initially quash service against them last year.

White ruled today that prosecutors still haven’t fulfilled legal requirements.

The judge directed prosecutors and the defendants to appear in court on April 18 to address how they intend to proceed.

The case is U.S. v. Liew, 11-cr-00573, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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