Criminal trade secret prosecutions have been on the rise nationwide. The Department of Justice (DOJ) and the FBI have been partnering with businesses to combat trade secret theft and to vindicate the rights of corporate victims of such crimes. Emerging industries are a natural arena for trade secret theft – as new technologies start to develop, no one wants to get left behind. Self-driving companies have become an automatic target for trade secret thefts. And the DOJ has started to beef up enforcement in the autonomous vehicle space.
Self-driving companies have been engaged in rapid development and innovation, have been met with fierce competition, and have a growing need to guard against theft of their developing technologies and intellectual property. These companies have also seen certain employees, engineers, and executives cross enemy lines and move over to competitors. When these moves have not been above board, the DOJ has acted swiftly to prosecute any apparent theft of trade secrets:
- Guangzhi Cao, a former engineer at Tesla, who was later employed by a Tesla-competitor, Xiaopeng Motors, was accused of trade secrets theft and arrested by the FBI at San Jose International Airport in July 2018. Cao was accused of stealing source code from Tesla’s Autopilot technology.
- Two former Apple employees have been charged with stealing self-driving car project secrets. One of the employees, Jizhong Chen, recently applied for a job at a China-based autonomous vehicle company that is a direct competitor of Apple’s project. The other former Apple employee, Xiaolang Zhang, was arrested by federal agents for allegedly stealing proprietary information related to Apple’s autonomous vehicle project and attempting to bring Apple’s trade secrets to China-based XMotors. Zhang was indicted by a grand jury, and faces a maximum sentence of 10 years in prison, and a fine of $250,000.
- Judge William Alsup, after presiding over a civil suit in which Waymo claimed that its former employee, Anthony Levandowski, stole 14,000 documents about its self-driving car project (containing trade secrets) to give to Uber, referred the theft claims to the U.S. Attorney for a possible criminal investigation. The DOJ has confirmed that it opened a criminal investigation connected to these allegations. In fact, in a rare and unusual moment, the DOJ appeared in the civil case to inform Judge Alsup that there was additional evidence that Uber had not turned over in the case. The DOJ was aware of evidence from a former employee, who alleged that Uber had been secretly gathering intelligence on competitors. The civil suit ultimately settled for $245 million.
These examples confirm that the DOJ is very motivated to investigate, prosecute, and otherwise aid in the resolution of trade secret thefts, especially in the dawn of technological innovation and in the race towards car automation.