International

A Voice from China: Unraveling the Different Standards for Civil and Criminal Misappropriation of Trade Secrets

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In China, victims of trade secret misappropriation suffering losses over RMB 500,000 are entitled to file a civil action and may also report the case to public security authorities to initiate a criminal investigation. (For more of our coverage about trade secrets protection in China, click here). When both criminal and civil actions are pending, a Chinese criminal court tends to use the civil decision, if available, as the basis of proving the crime of trade secret misappropriation as long as the damages requirement is met. In Maige Kunci Co., Ltd. v. Suzhou Ruitai New Metal Co., Ltd. (regarded as one of the top 10 Chinese IP cases in 2014) READ MORE →

One Step Closer: European Parliament Legal Affairs Committee Approves Trade Secret Directive

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As Trade Secrets Watch has previously reported, new rules regarding the protection of trade secrets are on the horizon for the European Union. In November 2013, the European Commission announced a proposed Directive on trade secrets and confidential information. Around six months later, in May 2014, the Council of the European Union agreed on a revised draft Directive. Reception of the Trade Secrets Directive has been mixed. READ MORE →

First Foreign Hacker Is Convicted In The United States Of Hacking Crimes Involving Theft Of Trade Secrets From American Companies

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A 22-year-old Canadian hacker has been sentenced to federal prison by a Delaware court for engaging in a conspiracy to break into the computer networks of several large gaming companies, to steal trade secret and other information related to unreleased products, and to commit criminal copyright infringement.  According to the Government’s Sentencing Memorandum, David Pokora of Ontario, sentenced last Thursday was “a leading member in an international computer hacking ring . . . that committed numerous unlawful intrusions into the computer networks of various technology companies involved in the $22 billion-dollar video gaming industry.”  The conspiracy’s victims included Microsoft, Epic Games (which develops the highly popular “Gears of War” series), and Activision Blizzard (which published, among many other successful games, “Call of Duty: Modern Warfare 3”). READ MORE →

How Much Damages Can You Realistically Expect for Trade Secrets Misappropriation in China

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The best way to protect trade secrets is to prevent them from being misappropriated in the first place, but when trade secret misappropriation occurs, a trade secret holder will likely want to obtain adequate damages through litigation. The methods of calculating damages for trade secret misappropriation are thus crucial, since remedies available to the trade secret holder are determined by these methods. Although China lacks formal remedies for trade secret misappropriation, it has a body of trade secret law that flows from various statutes. READ MORE →

POTUS Declares Cybercrime a National Emergency, Announces New Penalties for Trade Secrets Theft

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Declaring cybercrime a “national emergency,” President Obama today empowered Treasury to freeze assets that are the fruits of cybercrime, according to an Executive Order issued this afternoon. The agency can block money or property in the United States or in the control of any United States person determined to have engaged in “cyber-enabled activities” originating or directed from outside the United States. Targeted activities include harming computer networks in critical infrastructure sectors; significantly disrupting a computer network; or causing significant misappropriation of trade secrets and other protected information. The EO also enables seizure of money or property of any persons involved in misappropriating trade secrets by “cyber-enabled means” that impact the national security, foreign policy, or economic health or financial stability of the United States.

TSW is tracking the EO and will report further developments.

China’s New Cybersecurity Policies: Is the Price of Compliance Worth the Risk of Disclosure?

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Tensions recently escalated in the United States and China’s ongoing exchange over online security and technology policies, as China adopted the first in a series of policies it previously approved at the end of last year.  Among other things, the newly adopted regulations require foreign technology companies that sell computer equipment to Chinese banks to submit to obtrusive audits, set up research and development centers in the country, build “back doors” into their hardware and software, and, perhaps most disconcerting, disclose intellectual property to the Chinese government, including proprietary source code. READ MORE →

Former Aerospace Engineer Pleads Guilty to Misappropriation of Trade Secrets Intended for Iran

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Although it appears that the U.S. and Iran are moving closer to a deal regarding Iran’s nuclear program, Iran’s allies appear to remain committed to acquiring military-grade technology from U.S. companies by way of engineers sympathetic to Iran.

According to an FBI press release, a former Pratt & Whitney engineer, Mr. Mozaffar Khazaee of Connecticut, pleaded guilty to violating the Arms Export Control Act by attempting to send to Iran export-controlled trade secrets (such as technical manuals, specification sheets, etc.) relating to jet engines used in the U.S. Air Force’s F35 Joint Strike Fighter program and F-22 Raptor program. He now faces a possible 20 years in prison. The investigation revealed that Mr. Khazaee misappropriated the materials from at least three different defense contractors where he has worked since 2009. Mr. Khazaee is a dual citizen of the U.S. and Iran. READ MORE →

New Opposition to the EU Trade Secrets Directive

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Not everyone is happy about the proposed EU Trade Secrets Directive.  When we last touched on this topic a couple of months ago, the European Union looked poised to enact a sweeping new legal regime that would harmonize trade secrets law across all member states.  The new framework was supposed to be a single, clear, and coherent legal regime for the protection of trade secrets.   And it was aimed at making it easier for national courts to deal with the misappropriation of confidential business information, remove trade-secret-infringing products from market, and facilitate compensation for illegal actions. READ MORE →

CONTINENTAL SHIFT: EU Advances Legal Regime Protecting Trade Secrets

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The European Union appears poised to enact a sweeping new legal regime that would harmonize trade secrets law across all member states.

It’s been a year since we wrote about a new EU proposal to regulate trade secret protection. Then, at the end of November 2013, the EU published its first draft proposal for a Directive on the protection of trade secrets.In May of this year, the Council of the European Union agreed on a revised draft Directive. (In contrast to European Regulations, European Directives do not apply directly as member states’ law, but only give objectives that the Member States must achieve within a specified time limit in order to harmonize their various national rules. This means that, in fact, trade secrets rules will not be “unified” but rather “similar” across the Continent.)

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RUSSIAN WEAPONS: New Amendments to Russia’s Trade Secret Law Target Thieving CEOs and Workers

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New amendments to Russian law take aim at the theft of trade secrets by employees, with especially tough penalties for thieving CEOs.

The amendments to Russia’s Trade Secret Law became effective October 1, 2014. The goal of these amendments is to increase the protection of trade secrets by stiffening penalties for unauthorized disclosures by employees.
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