IMAX Corporation claims that one of its former software engineers stole the company’s technology and has used it to help a lower-cost Chinese giant-screen rival.
According to IMAX’s court filings, Gary Tsui worked for IMAX in Mississauga, Ontario from 1999 to 2009. When he told his employer that he intended to quit, he was fired first when IMAX discovered that he had started a company that was bidding for giant screen business in China.
IMAX searched Tsui’s computer and allegedly found “rampant use” of the company’s trade secrets in starting his company.
Tsui is now the chief engineer for China Film Giant Screen (CFGS). IMAX says CFGS misappropriated IMAX’s technology for converting 2-D movies into 3-D.
CFGS was co-developed by the China Film Group, which determines which foreign movies may be shown in China.
The CFGS system is used in 50 movie theaters in China, compared to 20 using IMAX. The CFGS system is cheaper than IMAX, and ticket prices for CFGS theaters are lower.
In Ontario, IMAX obtained an injunction against Tsui which ordered him to stop competing with IMAX pending trial. The court also ordered Tsui detained for failing to comply with its orders, but he has apparently remained outside Canada.
IMAX also filed suit in Los Angeles against a Burbank company associated with a Hong Kong-based parent company. IMAX accuses the Burbank company of selling a CFGS system based on the IMAX technology allegedly stolen by Tsui.
The CFGS system is being used by Sony and MGM to exhibit the movie RoboCop in China. Large-format movies are especially popular in China, and the number of IMAX theaters there grew 37% in one year.
The Chinese film market is now second only to the US market, and growing rapidly, with about $3.6 billion in ticket sales annually, compared to about $10.8 billion for the US and Canada combined.