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Friday, Oct. 26, 2012

Tokyo court hears first oral argument by Japanese steelmaker in tech-theft suit against Posco


Tokyo District Court on Thursday held the first oral proceedings in a damages lawsuit filed by Nippon Steel & Sumitomo Metal Corp. against its South Korean rival, Posco.

A Posco lawyer told reporters that South Korea's largest steelmaker will "fight fairly," indicating the company's readiness for a full-scale battle against Nippon Steel & Sumitomo Metal's allegations that Posco stole its technology to make high-function sheet metal.

The major Japanese steelmaker said in a statement that it will prove Posco's wrongdoing in detail during the trial.

In the lawsuit, originally filed by Nippon Steel Corp., a predecessor of Nippon Steel & Sumitomo Metal, the plaintiff claims Posco began illicitly obtaining information on the technology to make grain-oriented electrical steel sheets in 1987, or earlier, in conspiracy with a former employee of Nippon Steel and others in Japan, and succeeded in mass-producing the sheets in a short period of time.

The ex-employee worked at Nippon Steel's research section for some 32 years until 1995 and was involved in the development of the technology. After retiring, the employee became a guest professor at a South Koran university and conducted joint research with Posco until 2001.

Posco inflicted massive losses on Nippon Steel & Sumitomo Metal, the Japanese steelmaker argues, demanding the South Korean firm and the former Nippon Steel employee pay ¥100 billion in damages and the court issue an injunction against Posco's production and sale of the sheets.

Nippon Steel merged with Sumitomo Metal Industries Ltd. to become Nippon Steel & Sumitomo Metal on Oct. 1.

Japanese manufacturers allegedly have long suffered from former employees leaking their technologies to foreign rivals, but they rarely brought such thefts before the court.

The ongoing lawsuit is "extremely important," Nippon Steel & Sumitomo Metal President Hiroshi Tomono said, adding the outcome of the trial would affect Japanese industry's efforts to prevent technologies from flowing out.

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The Japan Times

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