SI Group Ordered to Cease All Commercially Defamatory Actions and Compensate for Losses
ZHANGJIAGANG, China, May 14, 2015 /PRNewswire/ -- Sino Legend (China) Chemical Co., Ltd. ("Sino Legend") has once again been successful in the lawsuit against SI Group (Shanghai) Ltd. ("SI Group"). Zhangjiagang City People's Court has recently rendered its judgement, confirming SI Group's commercially defamatory activities and ordering the company to cease all such activities, send an open letter stating the facts and compensate for any losses.
The long-standing lawsuits and disputes between Sino Legend and SI Group can be traced back to the end of 2008, at which time the two firms filed several intellectual property lawsuits against each other.
On November 26, 2008, SI Group filed a complaint with the Economic Crime Investigation Unit of the Shanghai Municipal Public Security Bureau, alleging that Sino Legend has stolen its trade secrets. Then in 2010, SI Group filed two lawsuits with Shanghai No.2 Intermediate People's Court over attribution of the right to apply for patents and infringement of commercial secrets, claiming that Sino Legend has infringed its trade secrets. Shanghai No.2 Intermediate People's Court rendered its judgement on the two cases on June 17, 2013, determining that Sino Legend's product processes had been independently researched and developed by the company and the court would not hear SI Group's lawsuits as they had no factual and legal basis. On October 12, 2013, Shanghai High People's Court issued a final ruling, having made the decision to reject SI Group's appeal and sustain the original judgement as the appeal lacked any factual and legal basis.
After the Economic Crime Investigation Unit of the Shanghai Municipal Public Security Bureau issued a notice that it would close the case on September 4, 2009, as a result of concluding that Sino Legend had not engaged in any criminal activities, and before Shanghai No.2 Intermediate People's Court put the case on record, SI Group repeatedly sent letters to several Japanese and the three largest international tire manufacturers at the beginning of 2010, claiming that Sino Legend had illegally absconded with its business secrets and that the facts had been confirmed by the relevant authorities. Accordingly, Sino Legend filed a damage of reputation lawsuit against SI Group with Zhangjiagang City People's Court, and then withdrew the suit and refiled the commercial defamation lawsuit. Sino Legend alleged that SI Group sent open letters to its customers with the intent of damaging its reputation and published news releases containing defamatory commentary on the latter's website.
Zhangjiagang City People's Court recently rendered a judgement on the commercial defamation case, in support of Sino Legend and ordering SI Group to immediately stop all commercial defamation actions, to send open letters stating the facts to Michelin China Investment, Sumitomo Rubber Industrial, Toyo Tire & Rubber Co., Goodyear Tire Management Company (Shanghai), Yokohama Rubber Co and Continental Tires (Shanghai) and to publish open letters on its website and in two magazines Tire Industry and Rubber Industry, as well as to compensate Sino Legend for economic losses amounting to 1 million yuan (approx US$161,300).
"Integrity is essential for a company's sustainable success in business," said Sino Legend general manager Corey Xie Xiaojun, "unfortunately, as a U.S. company, SI Group declined to answer the questions to 'whether they would send the open letter to the customers or not' in the Chinese court. They wouldn't dare to avoid answering such a question if this took place in a U.S. court. The strong evidence made it futile to try to explain itself. The court's judgment confirming SI Group's commercially defamatory activities protected our legitimate rights and penalized SI Group for its dishonest behavior, all of which helps maintain fair competition and order in the market."
SI Group (Shanghai), a wholly-owned subsidiary of U.S.-based SI Group, is the world's largest producer of phenolic resin for use in tires. However, within less than six years since engaging in full-scale production, Sino Legend became one of the largest manufacturers of phenolic resin for use in the tire and rubber industries across Asia and the biggest rival of SI Group, a firm that had been until that point dominant in the market. These events led to the lawsuit against SI Group.