Criminal

UPDATE: Home Remedies Remain Best Medicine for Politically Charged IP Theft

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In July 2018, a federal judge in Wisconsin imposed a $1.5 million penalty—the maximum statutory fine—against Chinese wind turbine manufacturer, Sinovel Wind Group Co. Ltd., for stealing trade secrets from Massachusetts-based technology company, AMSC Inc. In addition to the fine, Sinovel was sentenced to 1 year probation and ordered to pay $57.5 million in restitution to AMSC, an amount the companies had settled on prior to the ruling. Sinovel also agreed to pay $850,000 to Massachusetts wind turbine operators. READ MORE →

To Be Or Not To Be: NY High Court Rules that Data Copied to a Server is a Tangible Reproduction under the New York Penal Code

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On May 3, 2018, the New York Court of Appeals held that data copied onto a server constitutes a tangible reproduction for purposes of liability under the New York Penal Code, marking the end of Sergey Aleynikov’s nine year battle with federal and state prosecutors.  Trade Secrets Watch has kept you up to date with the seemingly never-ending saga – most recently here, here, and here.

As a refresher, Programmer Sergey Aleynikov was accused of copying thousands of lines of code from his former employer, Goldman Sachs Group Inc. in July 2009.  The Second Circuit upheld Aleynikov’s conviction under the National Stolen Property Act (NSPA) and the Economic Espionage Act (EEA), but later prompted legislative changes when it reversed, finding that Aleynikov had not stolen a “good” as defined by the NSPA, nor a trade secret intended for use in interstate or international commerce, as required by the EEA. READ MORE →

Home Remedies for Politically Charged IP Theft

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In January of this year, Chinese wind turbine manufacturer Sinovel Wind Group Co. Ltd. was convicted of stealing trade secrets from U.S. company AMSC Inc. The theft caused AMSC, more than $800 million in losses and forced the company to lay off more than half its global work force. Sinovel’s sentencing—which could include fines exceeding $1 billion and a multiyear probationary period—is scheduled for June 2018. READ MORE →

Accounts Frozen: DOJ Alleges Seven Defendants Conspired To Misappropriate Trade Secrets

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Competition from Chinese companies shows no signs of slowing. Likewise, allegations of trade secret theft against Chinese companies are increasingly common. In this case, the U.S. Department of Justice linked allegations of trade secret theft with wire transfers from a Chinese company in order to freeze bank accounts and real property held by several defendants charged with conspiracy to steal trade secrets. READ MORE →

ECONOMIC ESPIONAGE AND PROTECTING TRADE SECRETS: Ninth Circuit Holds That Reasonable Measures to Guard Technology are Sufficient

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How can you protect your trade secrets from a vast and well-concealed international effort to steal those secrets? What constitutes a “reasonable” effort to protect that information where at least one competitor may already have the information?  The Ninth Circuit recently opined on these matters in the ongoing saga of U.S. v. Liew.

In 2014, Walter Liew and his company, USA Performance Technology, Inc., were convicted of multiple offenses, including claims under the Economic Espionage Act and conveying misappropriated trade secrets to a third party. The trade secrets related to DuPont’s technology for producing titanium dioxide, which is used in a wide range of products such as paint and Oreo cookies. READ MORE →

The Saga Continues: New York’s Highest Court Will Weigh in on Aleynikov’s Fate

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On April 20, 2017, the New York Court of Appeals issued a brief order continuing former Goldman Sachs programmer Sergey Aleynikov’s eight-year voyage through the state’s and country’s legal systems.  Here’s the issue:  does making a digital copy of misappropriated source code instead of physical copy constitute a “tangible reproduction or representation” of the source code?   READ MORE →

Password Sharing Is Not a Crime, Ninth Circuit Reassures in Denial of Nosal’s Request for Rehearing

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Since the early days of this blog, we’ve been covering the ongoing legal battle involving ex-Korn Ferry recruiter David Nosal as it winds its way through the courts. The latest chapter in this saga came on December 8, 2016, when a Ninth Circuit panel clarified that the Computer Fraud and Abuse Act (CFAA) does not criminalize innocent password sharing, in a published opinion denying Nosal’s request for a rehearing en banc. READ MORE →

Amendment to Federal Criminal Procedural Rule Could Impact Trade Secret Cases

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Much attention, including here at Trade Secrets Watch, has been focused in recent weeks on the Defend Trade Secret Act (“DTSA”), which overwhelmingly passed both houses of Congress in April and was signed into law by President Obama on May 11th. The DTSA gives companies new tools for combatting alleged trade secret theft, including a direct path to federal court via the addition of a private right of action to the Economic Espionage Act (EEA) and the ability to apply for ex parte seizure orders to prevent propagation or dissemination of stolen trade secrets. READ MORE →

Trade Secrets and Cloud Services: Is the Sky the Limit?

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Germany is not only known as one of the best countries for enjoying beer and bratwurst, but it is also known as a country with some of the strictest data privacy laws on the planet. Within this environment, should companies doing business in Germany even consider using cloud services for trade secrets? They should! READ MORE →

A Preview of the CFAA Arguments in United States v. Nosal, Part II: Could “Phishing” be a Factor?

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Oral arguments for the next round in United States v. Nosal have been set for October 20, 2015 at the Ninth Circuit in San Francisco.  So we figured it may be a good time to review both sides’ arguments related to the Computer Fraud and Abuse Act. After doing so, it seems to us that one topic not given any consideration in the briefs, but that may play a role during oral argument is the phenomenon known as phishing schemes, and how such schemes might be compared and contrasted with the scheme alleged in this case. READ MORE →