Beijing Neu Cloud Oriental System Technology Co – Joint Undertaking based on IBM Server products in China – the court of IBM Corp and his Chinese subsidiary in the Federal Court of Manhattan on Friday for the fact that the company allegedly squeezed their secrets.
Neu Cloud said in the complaint that IBM provided confidential information about customers in its partnership to a rival joint venture that was later established with another Chinese company.
Armonk, New York, IBM did not immediately respond to a request for comment, nor did Neu Cloud’s attorney Gary Hnath and Bryan Nese of Mayer Brown.
The complaint says that IBM China – of which Neu Cloud claims to be operated by IBM Corp – and its distributor Beijing TeamSun Technology Co., a “leading integrated IT services provider in China”, founded Neu Cloud in 2014 to “further open up the Chinese market” for IBM Power Systems server-based hardware and software. Their deal would make Neu Cloud “completely dependent” on IBM’s supplies and would give it “substantial control” over its operations.
Neu Cloud said it submitted an RFQ to IBM as part of an agreement that included confidential customer information and that IBM agreed to keep it confidential. According to the lawsuit, IBM formed a separate joint venture with another Chinese company, INSPUR Co, in 2017 to develop and market Power Systems products.
The complaint states that IBM subsequently “refused to sell server products to Neu Cloud, except through a new joint venture, and reminded its own employees to have knowledge of the list of secret customers.”
Neu Cloud’s confidential information joins this new venture and shares this confidential information.”
Neu Cloud said it had lost market share and a sales opportunity based on IBM’s stock. They sued IBM for alleged misappropriation of its trade secrets under US law, seeking damages and an injunction against IBM abusing its secrets.
The case is Beijing Neu Cloud Oriental Co., Ltd. System technology v. International Business Machines Corp., United States Southern District Court for the Southern District of New York, no. 1:21cv07589.
For Neu Cloud: Gary Hnath, Bryan Nese and Clark Bakewell by Mayer Brown; Shen Wang, Hao Tan and Chen Li from Arch & Lake.