Sinopec Denies Violating Ineos Acrylonitrile Patent

21.03.2014 -

Ineos is suing Shanghai Research Institute, a subsidiary of China's largest petrochemicals producer Sinopec, in the Beijing high court for allegedly violating the Swiss-based petrochemicals giant's intellectual property rights to acrylonitrile (ACN) production technology.

Saying the Sinopec subsidiary is using the technology in a new chemical plant in Anhui Province without paying license fees, the former British chemical producer led by chairman Jim Ratcliffe is asking for more than $1 billion in compensation.

It also is requesting mediation under Swedish law to resolve other disputes with the Chinese group, which already licenses the Ineos technology for use in other production facilities.

Ineos, which claims to own licenses for 90% of global ACN production, is concurrently negotiating with the Sinopec group about licensing the process for six plants under construction throughout the country. It also is in talks with other Chinese companies about licenses.

Sinopec denies the intellectual property violation charges, saying it developed the catalyst and associated technology "after 50 years of research." The Chinese giant contends it owns full rights, and there is no ground for the alleged infringement.

Even while fighting Sinopec in court, Ineos is investing in a $500 million, 50:50 joint venture with Sinopec Yangzi Petrochemical to produce phenol and cumene at Nanjing, China, agreed last month.

Doing business with a powerful partner on the one hand and suing it on the other proves once again that Jim Ratcliffe is not afraid of a fight, remarks the London-based Financial Times, which originally broke the story.

However, recalling last autumn's protracted dispute with the UK union Unite over wages and working conditions at Ineos' petrochemical complex in Grangemouth, Scotland - which Ineos won - the paper comments that "a British union is one thing and the Chinese communist party is another."

It surmises that Ratcliffe believes he will get a fair hearing because China wants to dispel its reputation for condoning the larceny of foreign intellectual property.