International

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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Justice Hammers International Trade Secrets Hackers

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A recent Justice Department reorganization of its National Security Division concentrates resources on fighting state-sponsored economic espionage and corporate theft of trade secrets. These strategic changes focus on Justice’s ability to target and prosecute hackers and others who seek to damage national assets by means including economic espionage, proliferation, and cyber-based national security threats.
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CAR JACKING: Former Nissan Employees in Japan Arrested for Suspected Trade Secret Theft

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On May 13, 2014, a former employee of Nissan in Japan was arrested by the Economic Affairs Division of the Kanagawa Prefectural Police on suspicion of trade secret theft.  The arrest was made under the trade secret provisions of Japan’s Unfair Competition Prevention Act (“UCPA”).

The former employee, identified as Kenichi Okamura, a Japanese national, worked at the Nissan Technical Center in Atsugi, Japan until he resigned in July 2013.  Before his resignation, he allegedly copied, on four different occasions, approximately five thousand electronic files pertaining to sales and marketing plans for Nissan’s popular “X-TRAIL” SUV.  He allegedly copied the files from Nissan servers to a private storage device that he took with him when he left the company.  READ MORE →

CYBER-SYMBOLISM? DOJ Announces First-Of-Its-Kind Prosecution of State Actors—But Does It Matter?

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The U.S. Justice Department has charged members of the Chinese military with allegedly engaging in economic espionage against American companies.  It’s the first time that the United States has leveled such charges against agents of a foreign country.  But with the accused in China, is this more bluster than bombshell?  Or are actual prosecutions possible?

A federal grand jury empanelled at the U.S. District Court for the Western District of Pennsylvania (where most of the target companies are located) returned an indictment against five members of a Chinese military unit in Shanghai, accusing them of conspiring to hack into the computer systems of six American companies. READ MORE →

Ex-SanDisk Employee Arrested in Japan, Civil Suits Filed in the Wake of Alleged Flash Memory Trade Secrets Misappropriation

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Technology firms SanDisk and Toshiba recently filed trade secrets lawsuits on opposite sides of the Pacific, each alleging misappropriation by a third party stemming from the two companies’ joint venture.

SanDisk filed in California (seeking damages and injunctive relief) and Toshiba in Japan for alleged misappropriation of trade secrets from SanDisk and a SanDisk-Toshiba joint venture. In Japan, the alleged perpetrator was arrested.  Engineer Yoshitaka Sugita, his former employer, SK Hynix, and two wholly-owned North American subsidiaries stand accused of misappropriation.  SK Hynix is accused in both the California and Japan actions. READ MORE →

Protecting Trade Secrets in Russia: Lenient Criminal Sanctions Undercut Effective Protection

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As the world prepares to descend on Sochi for the 2014 Winter Olympic Games, Trade Secrets Watch decided to take a look at how effective trade secret protections are in Russia.

Although Russia has fairly robust trade secret laws, Russian companies have generally been reluctant to seek legal redress for trade secret violations. According to studies conducted by market research agencies, about 90 percent of Russian companies have at some stage suffered from the theft of trade secrets. Although such theft can be a criminal offense, in most cases companies faced with this problem try to deal with it by themselves. In only 5 percent of cases do they initiate legal proceedings. READ MORE →