State-Sponsored Misappropriation

Chinese and Russian Hackers Targeting COVID-19 Vaccine Research

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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 →

In Pursuit of Chinese Trade Secret Theft: Fresh Allegations Against Huawei and Chinese Military Grabs 145 Million SSNs

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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 →

In a Blockbuster Economic Espionage Act Prosecution, an Attempt by the Government to Hide the Ball?

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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 →

Huawei Alleges “Selective Prosecution” by the DOJ

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In January of this year, the DOJ indicted the Chinese telecom giant Huawei on counts of theft of trade secrets conspiracy, attempted theft of trade secrets, wire fraud, and obstruction of justice. On August 1, Huawei moved to dismiss the indictment for “selective prosecution.” Huawei contends that it is the “target of the politically motivated decision, at the highest levels of the U.S. government, to pursue the selective prosecution of Chinese companies and nationals for the alleged misappropriation of intellectual property.” In essence, it argues that the DOJ unconstitutionally seeks to punish Huawei because it is a large, successful Chinese company, not because of illegal behavior by the company or its agents. READ MORE →

Are State Governments Immune From Suit For Misappropriation Of Trade Secrets?

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You are a state-government contractor. You respond to an RFP issued by a state-government entity. In your bid proposal, you submit documents that contain your trade secrets. You do not get the contract, but you later learn that the state-government entity gave your trade secret information to your direct competitor who did get the contract. Do you have any options under federal or state trade secret laws to sue the state? 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 →

The New Space Race: Protecting Trade Secrets on the Final Frontier

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Space: The final frontier.  For millennia, people have wanted to explore the great unknown of outer space, and series like Star Trek and Star Wars continue to our fuel our fantasies about what lies beyond our stratosphere.  This fascination, as well as countries’ desires to maintain their military prowess, led to the First Space Race after World War II.  Today, while NASA’s dominance may have fizzled out, private companies have embarked on a commercialized space race to gain market dominance from their designs. Indeed, the House of Representatives recently passed the SPACE Act to enable commercial space mining activities. 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 →

U.S. v. LIEW: Opening Statements and FBI Testimony Kick Off Seven-Week Industrial Espionage Trial

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A prosecutor opened the economic espionage trial of Walter Liew on Wednesday by waving at jurors a key that he alleged opened Liew’s safe deposit box containing industrial secrets stolen from DuPont.

Assistant U.S. Attorney John Hemann led jurors through an almost cinematic scene that culminated with FBI agents confronting Liew and his wife, Christina, with the key found during a search of their Orinda, California home. Liew sat at the defense table during opening statements in San Francisco, as did co-defendant Robert Maegerle, a former DuPont employee. READ MORE →

U.S. v. LIEW: Jury Selection Focuses on Anti-China Bias in Industrial Espionage Case

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A federal judge questioned prospective jurors closely Tuesday for signs of anti-China bias in the industrial espionage trial of a U.S. citizen who prosecutors say fed secrets to a Chinese company.

Prosecutors allege that Walter Liew, who is of Malaysian descent, stole manufacturing secrets from E. I. du Pont de Nemours and Company and sold them to a company the Chinese government purportedly controlled.  His lawyers say there was little secret about DuPont’s techniques for making titanium dioxide, a white pigment used in painting paper and plastic, and that the Chinese government did not orchestrate Liew’s activities or that of a Chinese company, the Panang Group, at the center of the case.  (We previously commented on the government’s inability to serve the foreign-based company.) READ MORE →