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Cases We’re Watching

Case #1

Companies: DuPont and Pangang Group

Current Status: Open case in a Ninth Circuit Court

Synopsis: DuPont, an American chemicals company, owns a world-leading proprietary multi-stage process for producing titanium dioxide, a chemical responsible for the brilliant white of Oreo cream filling, automotive paint, and many more industrial applications. Walter Liew, a research engineer, conspired to steal the formula with DuPont chemical engineer, Robert Maegerle. Liew used thisinformation to win contracts worth $28 million from China’s Pangang Group to build a TiO2 production facility. Liew was convicted in 2014 and sentenced to 15 years in prison and more than $28 million in fines, Maegerle was sentenced to 2 ½ years. DuPont continues to pursue legal action against Pangang which claims immunity under the Foreign Sovereign Immunities Act, despite the statute’s commercial activity exemption. U.S. v. Pangang is being tried in the U.S. Court of Appeals for the Ninth Circuit.

Media Coverage:

1) Bloomberg: How a corporate spy swiped plans for DuPont’s billion-dollar color formula. February 4, 2014.

2) Courthouse News: Service Complicates DuPont’s Trade Secrets Beef Against Chinese Companies. June 13, 2018.

3) Law360: Chinese Co. Accused Of Espionage Tells 9th Circ. It’s Immune. February 27, 2020.

4) Law360: 9th Circ. Judge Doubts Co. Can Slip Charge It Stole DuPont IP. October 15, 2020.

Case #2

Companies: Huawei and T-Mobile

Current Status: New indictments filed in February of 2020

Synopsis: In 2014, T-Mobile invited two engineers with Huawei, a Chinese telecom company, to tour its labs in Seattle. The engineers took the visit as an opportunity to steal information and a piece of confidential equipment, Tappy the Robot. A Seattle court decided in 2017 that Huawei stole T-Mobile trade secrets and awarded the company $4.8 million in damages. In 2020, the US Department of Justice filed a series of lawsuits against Huawei, one of which accusing Huawei of stealing trade secrets and launching a formal bonus program rewarding employees for stealing trade secrets.

Media Coverage:

1) New York Times: T-Mobile Accuses Huawei of Theft from Laboratory. February 13, 2014.

2) Geek Wire: Jury sides with T-Mobile in federal lawsuit over theft of ‘Tappy’ robot technology by Huawei. May 17, 2017.

3) NPR: A Robot Named ‘Tappy’: Huawei Conspired To Steal T-Mobile’s Trade Secrets, Says DOJ. January 29, 2019.

4) Reuters: U.S. accuses Huawei of stealing trade secrets, assisting Iran. February 13, 2020.

Case #3

Companies: Avago Technologies, Skyworks Solutions and Tianjin University

Current Status: 1 of the 6 Perpetrators has been arrested and charged.

Synopsis: In 2015, six Chinese citizens were charged with stealing wireless communication technology from two American microchip manufacturers to launch their own company. The six Chinese citizens created a corporate espionage network while working and studying in the United States. Some began applying for patents on the stolen technology in 2010 on behalf of Tianjin University, a state-sponsored university in China. Avago Technologies, one of the victims of this intellectual property theft, spent 20 years and $50 million developing the technology that was stolen. One of the perpetrators was arrested in 2015 and was sentenced to 18 months in prison in 2020. The five others remain at large.

Media Coverage:

1) New York Times: 6 Chinese Men Indicted in Theft of Code From U.S. Tech Companies. May 19, 2015.

2) LA Times: Chinese professor accused of stealing tech secrets faces rare espionage trial. October 6, 2019.

3) InfoSecurity Magazine: Chinese Professor Jailed for Stealing US Trade Secrets. September 2, 2020.

Case #4

Companies: LG Chem and SK Innovation

Current Status: Decision expected December 2020

Synopsis: The US International Trade Commission is expected to make a decision in December regarding an intellectual property dispute between Korean battery manufacturer’s LG Chem and SK Innovation. The suit has been filed on the basis that SK stole trade secrets from LG Chem and used them to open a new plant in Commerce, Georgia which is scheduled to be complete in 2021.

This new $2.6 billion facility is expected to employ approximately 2,600 individuals and has already signed a deal to provide lithium-ion batteries for the Volkswagen electric SUV being built in neighboring Chattanooga, TN, and the new electric Ford F-150 pickup. In recent years, more than 100 LG Chem employees have left the company for SK, and according to a complaint filed the US International Trade Commission, those former employees are suspected to have stolen critical battery secrets.

Media Coverage:

1) Reuters: SK Innovation fuels LG Chem feud with EV battery patent lawsuit. August 29, 2019.

2) Korea Times: LG Chem gains edge over SK in battery battle. February 16, 2020.

3) Reuters: U.S. ITC delays decision on LG Chem, SK Innovation trade secret case. October 26, 2020.

Past Cases 

Case #1

Companies: American Superconductor and Sinovel Wind Group.

Date: Sinovel was charged in 2013 and the case was settled in 2018.

Synopsis: The theft led to American Superconductor cutting 700 jobs, half its global workforce, and losing approximately $1 billion in market value. The courts imposed the maximum statutory fine of $1.5 million on Sinovel and the company received a year of probation until the full restitution of $57.5 million is paid. Sinovel was also ordered to pay $850,000 to additional victims during the probationary period. 

Media Coverage:

  1. Reuters: China's Sinovel convicted in U.S. of trade-secret theft. January 24, 2018.

  2. CNN Business: Chinese trade secret theft nearly killed my company. March 23, 2018.  

  3. S&P Global: Sinovel to pay American Superconductor $57.5M settlement for trade secret theft. July 6, 2018.

  4. BBC: Will Trump's tariffs stop Chinese espionage? August 8, 2018.

Case #2

Companies: Micron Technology and Fujian Jinhua Integrated Circuit Co./United Microelectronics Corp.

Date: First suit filed in 2017 and latest ruling in June 2020.

Synopsis: A Taiwanese court ruled that current and former engineers from United Microelectronics Corp. stole trade secrets from U.S. chipmaker Micron and shared them with a government-backed mainland Chinese company Fujian Jinhua Integrated Circuit Co worth approximately $9 billion. A fine of $3.4 million was assessed and the three engineers will be jailed for periods between 4.5 to 6.5 years and fined.

The Commerce Department blocked the Chinese company, Fujian Jinhua Integrated Circuit Co. from buying goods and services in the United States, to prevent the company profiting from the technology it stole. Furthermore, the Justice Department filed a civil lawsuit, seeking a court order that would block the Chinese and Taiwanese companies from transferring the stolen technology or exporting products to the U.S. based on it.

Media Coverage:

  1. Reuters: U.S. indicts Chinese, Taiwan firms for targeting Micron trade secrets. November 1, 2018.

  2. NBC News: Chinese company charged with stealing trade secrets from U.S. computer firm. November 1, 2018.

  3. Chicago Tribune: Here are 5 cases where the U.S. says Chinese companies and workers stole American trade secrets. February 21, 2019.

  4. Financial Times: China chipmaker accused of IP theft looks to rival for rescue. May 9, 2019.

  5. Bloomberg: Engineers found guilty of stealing micron secrets for China. July 12, 2020.

Case #3

Companies: Tennessee Valley Authority and China General Nuclear Power Company

Date: Sentenced in 2017

Synopsis: Szuhsiung Ho, a naturalized Chinese-American citizen, was charged with stealing sensitive nuclear technology to sell to China’s state-run General Nuclear Power Company (CGN). Ho arranged two payments from the Chinese government to experts at American nuclear companies in exchange for information to advance the CGN Small Modular Reactor Programme. Ho was sentenced to two years in prison in 2017. Ching Ning Guey, a Senior Manager at the Tennessee Valley Authority, was charged with conspiring with Ho to provide secrets to China and sentenced to three years of probation. 

Media Coverage:

1)    Global Construction Review: Man Arrested as FBI Probes Conspiracy to Sell US Civil Nuclear Secrets to China. May 19, 2016.

2)    SkyNews: US engineer gets two years in jail for leaking nuclear secrets to China. September 1, 2017.

3)    Knox News: Judge rejects prison for former TVA exec tied to confessed operative for China. February 8, 2018.

Case #4 

Companies: Apple and Xiaopeng Motors

Date: Arrests in 2018 and 2019

Synopsis: Jizhong Chen and Xiaolong Zhang were arrested individually in 2018 and 2019 and charged with stealing trade secrets. Both former Apple employees had been working closely on the highly secretive autonomous car initiative “Project Titan”. Chen and Zhang were both arrested by the FBI before they could board planes back to China. Zhang had resigned from Apple and was going back to China to work for Xiaopeng Motors, a startup autonomous car company in China. Apple found that Zhang had transferred 40GB of confidential information from his company laptop before returning it to Apple. They also found that Chen had transferred over two thousand files to a personal hard drive containing confidential and proprietary Apple material, including manuals, schematics, and diagrams. The two are awaiting trial in the United States.

Media Coverage:

  1. Business Insider: An ex-Apple employee has been charged with stealing autonomous vehicle secrets. July 10, 2019.

  2. The Verge: A second Apple employee was charged with stealing self-driving car project secrets. January 30, 2019.

  3. Reuters: Apple has 'deep concerns' that ex-employees accused of theft will flee to China. December 9, 2019 

Case #5 

Companies: Google and Otto

Date: Arrests in 2018 and 2019

Synopsis: Anthony Levandwoski, a French-American engineer who co-founded Google’s self-driving car program, was indicted in 2019 on 33 federal charges of stealing self-driving car trade secrets. Levandowski allegedly downloaded files of Google’s confidential files and trade secrets to start and found Otto, a self-driving technology company. Levandowski sold Otto to Uber Technologies in 2016. Google filed a lawsuit against Uber in 2017 and Uber was subsequently ordered to give an estimated $245 million in equity to Google and not to use the technology it bought through the acquisition of Otto. Levandowski was ordered to pay $179 million in damages to Google and was sentenced to 18 months in prison.

Media Coverage:

  1. The Guardian: Who is Anthony Levandowski, and Why is Google Suing Him? February 23, 2017.

  2. New York Times: Star Engineer Who Crossed Google Is Ordered to Pay $179 Million to Company. March 4, 2020.

  3. The Verge: Former Google exec Anthony Levandowski sentenced to 18 months for stealing self-driving car secrets. August 4, 2020.

Case #6 

Companies: IBM and China’s National Health and Family Planning Commission

Date: Sentenced in 2018

Synopsis: Xu Jiaqiang was arrested in May of 2016 on charges of stealing trade secrets for a clustered file system. During Jiaqiang’s time at IBM between 2010 and 2014 he stole source code for the file system used for data management in health care. He conspired to sell the information to the National Health and Family Planning Commission of the People’s Republic of China. Upon resigning from IBM in 2014, he offered to sell the confidential information to an undercover law enforcement agent posing as an investor. In 2015, he demonstrated the software to undercover FBI agents. He was eventually sentenced to five years in prison.

Media Coverage:

  1. BBC: US charges Chinese ex-IBM worker with espionage. June 15, 2016.

  2. Fortune: Ex-IBM Employee Guilty of Stealing Secrets For China. May 21, 2017.

  3. Washington Times: Xu Jiaqiang, former IBM employee, sentenced for selling trade secrets. January 19, 2018.