The White House announced that a Chinese professor had been arrested for stealing US technology from the firm where he once worked, according to the New York Times.

Prof. Zhang Hao of Tianjin University was arrested as he arrived at LAX on his way to a conference.

Five other Chinese citizens have been indicted for what the Obama administration said was a “decade-long scheme to steal microelectronics designs from American companies on behalf of the Chinese government.”

The men allegedly took “recipes, source code, specifications, presentations, design layouts and other documents marked as confidential.”

Economic Espionage

The indictment was under the Economic Espionage Act. It charges that Prof. Zhang and the five other men created a network as they studied, and later worked, in the US.

According to the Associated Press, three of the men met at USC. They graduated in 2006 with electrical engineering Ph.D.s.

They worked for two small US technology companies that made filter chips used in cellphones. One of the companies spent 20 years and $50 million to develop its technology.

The market for the filter chips exceeds $1 billion per year. Accordingly to the indictment, the men took the technology back to the Chinese university in 2009, where they created a joint venture to produce and sell the chips.

Executives of one of the companies the men had worked for became suspicious when they saw Prof. Zhang’s patent applications for technology created by the company. Zhang’s former boss toured a lab in China created by the defendants and recognized technology stolen from the company.

The men and the Chinese university have denied the allegations.

Takeaway

The case illustrates how intellectual property owners can be injured with a one-two IP punch:

  • First the defendants allegedly stole trade secrets.
  • Then they allegedly used those secrets to file patents for the technology.

IP owners are not only vulnerable to theft of trade secrets by insiders. They are also vulnerable to hackers, as we discussed in this blog.

According to the New York Times, technology companies and their patent law firms are being targeted by hackers “looking to steal information on highly sensitive matters such as mergers and acquisitions and patent applications.” (Emphasis added.)

Thus, it is important to assure that patent applications, and all related materials, are maintained in a way that keeps the information safe from both insiders and hackers.

About Us

The firm’s Intellectual Property Group is based in Pasadena, California with a team of highly-regarded legal professionals with prosecution and litigation expertise in the fields of patent, trademark, copyright, and trade secrets.

Please also visit us online for more information about our services.

Photo Attribution: “Gate of Tianjin University of Finance and Economics” by Narjuko – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

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