The trial of Xiaorang You (aka “Shannon You”)—the principal research engineer accused of stealing trade secrets from several companies, including Coca-Cola—began on April 6, 2021 in the Eastern District of Tennessee at Greeneville. Ms. You was indicted by a grand jury on February 12, 2019 for theft of trade secrets, conspiracy to commit theft of trade secrets, and wire fraud. The trade secrets were valued at more than $119 million. In August 2020, a superseding indictment added additional charges related to economic espionage.
The latest development in the Department of Justice’s “China Initiative” occurred earlier this month, as the DOJ unsealed an 11-count indictment charging two Chinese nationals with stealing hundreds of millions of dollars’ worth of “trade secrets, intellectual property, and other valuable business information”— including potential COVID-19 research. The two Chinese hackers allegedly worked for their own benefit and together with the Ministry of State Security, China’s intelligence and security agency, to infiltrate the electronic networks of a number of targets including several American biotech firms “publicly known for work on COVID-19 vaccines, treatments, and testing technology.” READ MORE
Loyal readers are familiar with the DOJ’s “China Initiative,” launched in November 2018 to prosecute the theft of U.S. trade secrets by or for Chinese interests. Attorney General Barr reaffirmed the DOJ’s commitment “to combat the threat posed by theft directed and encouraged by the PRC” in an address at the China Initiative Conference last month. The DOJ’s campaign recently intensified with two new, gripping indictments. READ MORE
An ongoing, headline-grabbing trade secret theft prosecution against a Chinese spy is also quietly presenting a, say, disquieting attempt by prosecutors to stretch the law on what it is required to plead and prove. On the civil side, when a plaintiff sues for trade secret theft, there’s almost always a hotly contested point of proof on whether the alleged stolen material is really a trade secret. It’s well-established, though, that when the government charges a defendant criminally with the inchoate forms of trade secret theft—attempt or conspiracy being the two spelled out under the Economic Espionage Act—the government has no burden to prove that the underlying information was actually a trade secret. (Loyal readers will recall our recent post on United States v. O’Rourke, where the defendant tried to argue otherwise at sentencing.) Now, in a brief filed just last week, the government seems to be taking this one step further and arguing that it has no duty even to identify the trade secrets at issue. READ MORE
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
This afternoon, as anticipated, President Barack Obama signed the Defend Trade Secrets Act into law, wrapping up a lengthy bipartisan effort to bring trade secrets under federal system law. Some observed that the fact that President Obama chose to sign the bill into law publicly indicates the importance of the new law to the administration. READ MORE
Yesterday Congress passed federal trade secrets legislation (the “Defend Trade Secrets Act” or “DTSA”) by an overwhelming 410-2 vote.
The Wall Street Journal notes that the DTSA has been called the “most significant expansion” of federal intellectual property law in 70 years (since the Lanham Act was passed in 1946 to provide federal protection to trademarks). House Judiciary Chair Bob Goodlatte said the measure “will help American innovators protect their intellectual property from criminal theft by foreign agents and those engaging in economic espionage.” READ MORE
Relief may soon be coming for trade secrets plaintiffs longing for federal court. Last year we covered the introduction of the Defend Trade Secrets Act (DTSA), compared it to the Uniform Trade Secrets Act (UTSA), and questioned whether federal court under this new law would be a preferable venue to plaintiffs. Since then, the bill, like the many that came before it, died in Congress. READ MORE
A recent development from the 3D printing world reminds us that threats of trade secret misappropriation are more varied than cyber-espionage or the disgruntled employee taking confidential information to a competitor. With exciting new technologies come “exciting” new ways to steal trade secrets. Sometimes all it takes to steal a secret is being a good listener. READ MORE
The Federal Circuit has once again affirmed the ITC’s broad jurisdiction to investigate and, if necessary, remedy extraterritorial misappropriation of trade secrets. Based on this and other recent decisions, it looks like the ITC will continue to be a significant forum for trade secret battles. READ MORE