Sino Legend Prevails in Legal Challenge;
Court Rejects SI Group Trade Secret Arguments

June 17, 2013 – Following an extensive review of facts presented over several months, Shanghai No.2 Intermediate People's Court (“the Court”) today ruled in favor of Sino Legend (Zhangjiagang) Chemical Co., Ltd. in two landmark patent application rights and trade secret infringement cases.

Arguments presented by SI Group Inc. and SI (Shanghai) Co., Ltd. (“SI”) in Case Nos. 48 and 50 were rejected based on a thorough investigative and hearing process in which both parties were provided ample opportunities to share relevant information, data and expert opinion.

In Case No. 48, the Court found that more than half of SI’s supposed trade secrets are invalid since they are not “unknown to the public.” In addition, it ruled that none of Sino Legend’s technology incorporated in its tackifying phenolic resin patents is identical or materially identical to any SI trade secret. As such, SI’s claim that it holds the right to apply for the tackifying phenolic reasin patents in question was determined to have no factual or legal basis.

The Court cited similar logic regarding Case No. 50. It again ruled that that that more than half of SI’s supposed trade secrets are invalid since they are not “unknown to the public.” It also determined that none of Sino Legend’s technology used to produce SL-1801 is identical or materially identical to any SI trade secret. Therefore, the Court refused to uphold SI’s claim that Sino Legend disclosed and used SI trade secrets, with that contention found to have no factual or legal basis.

In both cases, the Court dismissed all SI claims pursuant to Article 10 of the Law of the People's Republic of China Against Unfair Competition; Articles 9, 10, 11 and 14 of the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of Law in the Adjudication of Civil Cases Involving Unfair Competition; and Article 145(2) of the Civil Procedure Law of the People's Republic of China.