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Suzanne Giammalva

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A recently introduced U.S. Senate bill demonstrates both the United States’ continued focus on foreign government-sponsored trade secret misappropriation and the International Trade Commission’s (“ITC”) potential untapped ability to swiftly protect intellectual property (“IP”) owners against this illegal conduct under Section 337.

This summer, U.S. Senators John Cornyn (R-Tex.), Christopher Coons (D-Del.), and Todd Young (R-Ind.) introduced the “Stopping and Excluding Chinese Rip-offs and Exports with United States Trade Secrets Act of 2021,” also known as the “SECRETS Act of 2021.” If passed, the bill would amend the Tariff Act of 1930 to fortify the ITC’s power to protect IP owners against trade secret misappropriation as well as work to expedite the investigatory and exclusionary processes.
Continue Reading Legislation Would Bolster ITC Power Against Foreign Government-Sponsored Trade Secret Misappropriation

On June 8, 2021, the Third Circuit clarified the requirements for making a trade secret misappropriation claim under the Defend Trade Secrets Act (“DTSA”) in a decision vacating the District of New Jersey’s dismissal of a trade secret misappropriation lawsuit against a former employee and his current employer. In short, the Third Circuit’s decision took a more relaxed view than the District Court, finding that a trade-secret plaintiff need not “spell out the details of its trade secret” or have direct allegations of misappropriation and harm to avoid dismissal.
Continue Reading The Third Circuit Clarifies DTSA Pleading Requirements, While Vacating Dismissal

On December 16, 2020, the U.S. Court of Appeals for the Ninth Circuit held for the first time in Attia v. Google LLC that a misappropriation claim under the Defend Trade Secrets Act of 2016 (“DTSA”) may be brought for a misappropriation that started prior to the enactment of the DTSA as long as the claim also arises from post-enactment misappropriation or from the continued use of the same trade secret.  The decision further expands the reach of the DTSA and provides a blueprint for other courts to rule along the same lines.

The case, which was originally filed in the Northern District of California in 2014, was brought by an architect and his firm against Google under the DTSA, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), and state trade secret and contract laws for alleged misappropriation of the plaintiff’s “Engineered Architecture” technology.[1] Although the Ninth Circuit affirmed the District Court’s dismissal of the DTSA claim on the grounds that  the architect lacked standing under the DTSA because Google’s 2012 patent applications based on the “Engineered Architecture” technology placed the contested information in the public domain, extinguishing any trade secret claims over it,[2] the Ninth Circuit’s ruling was significant for other reasons, namely the expansion of the DTSA’s potential applicability.Continue Reading Ninth Circuit Allows Defend Trade Secrets Act Claims for Conduct Predating the DTSA

The U.S. government is continuing its endeavor of prosecuting individuals for the theft of U.S. trade secrets and for allegedly selling or bringing these trade secrets to China. The U.S. government is demonstrating that it considers the protection of trade secrets, particularly those used in national defense and other essential technology, to be a priority.

On October 1, 2020, the U.S. Attorney’s Office for the District of Massachusetts reported that Haoyang Yu, a U.S. citizen who was born in China, his wife Yanzhi Chen, and their company Tricon MMIC LLC, were charged in a 24-count indictment for the alleged theft of American trade secrets worth millions of dollars from Analog Devices. Analog Devices, which has its headquarters in Norwood, Massachusetts, is an international semiconductor company. Yu was charged in 2019 with stealing, downloading, and copying Analog Devices’ trade secrets. Now, he and his wife have been charged with possession and attempted possession of a trade secret; transporting stolen goods; smuggling; visa fraud; and procuring U.S. citizenship unlawfully.
Continue Reading Chinese Individual Indicted for Alleged Trade Secret Theft from Semiconductor Company

This week, the U.S. government continued its enforcement activity against Chinese government-sponsored trade secret theft, indicting two Chinese hackers for allegedly stealing data from 25 domestic and international companies, including targeting those now researching COVID-19 testing, vaccines, and treatment. The two defendants had allegedly acquired hundreds of millions of dollars worth of trade secrets and other valuable business information across a span of nearly eleven years. This announcement follows in the wake of the indictment of Dr. Charles Lieber, a former Harvard professor, who allegedly lied about his participation in China’s “Thousand Talents Plan,” a program that has been accused of facilitating the stealing of American trade secrets. Our coverage of that indictment is here.

On Tuesday, July 21, 2020, the U.S. Department of Justice (“DOJ”) announced charges against Li Xiaoyu and Dong Jiazhi in the Eastern District of Washington, alleging that they hacked the computer networks of 13 United States and 12 international companies in industries ranging from high tech manufacturing and medical device engineering to solar energy and pharmaceuticals, all between September 2009 and July 2020.
Continue Reading DOJ Targets Chinese Hackers for Stealing United States Trade Secrets

The trade secrets of American industries and research institutions are often the target of foreign interests, as this blog has detailed in the past. Most recently, on June 9, 2020, the U.S. Department of Justice (“DOJ”) indicted the former Chair of Harvard University’s Chemistry and Chemical Biology Department and nanoscientist, Dr. Charles Lieber, for allegedly making false statements to federal authorities about his participation in China’s “Thousand Talents Plan.” This Plan, according to a 2019 Senate report, is part of China’s “strategic plan to acquire knowledge and intellectual property from researchers, scientists, and the U.S. private sector.” Past participants in the Plan have included a former General Electric engineer, Xiaoqing Zheng, who was indicted in April 2019 for allegedly stealing GE’s trade secrets related to turbine technology while employed at GE Power & Water in Schenectady, New York.

China’s Thousand Talents Plan began in 2008 and has been a concern of the U.S. government for some time. A 2019 Senate report characterized the Plan as a danger to American national security and proprietary information and stated that it “incentivizes individuals engaged in research and development in the United States to transmit the knowledge and research they gain [in the United States] to China in exchange for salaries, research funding, lab space, and other incentives.”
Continue Reading Harvard Professor Indicted for Allegedly Lying About Participation in Chinese Talent Recruitment Program

The COVID-19 crisis has presented an array of novel issues for companies, including new and unexpected cybersecurity threats. In addition to the now well-known security limitations of video platforms such as Zoom, we are seeing cyber-attacks in the form of COVID-19 related phishing attempts and ransomware attacks. In at least some of these attempted hacks, cybercriminals are hoping to steal trade secrets.

  • Cybercriminals are taking advantage of the novel at-home working environment and the increased fear and uncertainty surrounding the pandemic to launch malware and phishing attacks related to COVID-19.
  • Employees may be more likely to click a link or open an attachment, even though they would never consider doing so in a normal situation at work.
  • Therefore, malware may pose more of a danger than it did when employees primarily accessed their email over their employers’ traditionally more protected systems.
  • Companies should consider putting employees on notice about the COVID-19 related phishing attempts and provide examples of common scams.

Continue Reading COVID-19 and the Unique Opportunity for Phishing

The United States has long struggled with intellectual property (IP) theft facilitated or condoned by the Chinese government. Just in the past year, a CNBC CFO survey reports that one in five North American corporations have had their IP stolen by China, and just below one-third of CFOs of North American-based companies on the CNBC Global CFO Council state that Chinese firms have stolen from them during the last decade. This IP theft is very costly. In fact, some sources estimate that the annual cost that international IP theft imposes on the United States exceeds $225 billion in counterfeit goods and could be as elevated as $600 billion.

Chinese entities have been alleged to steal IP from foreign companies using methods such as trading with or forming joint ventures with the companies and then gaining access to their sensitive or proprietary information. Businesses have also willingly allowed Chinese partners to access this information in exchange for accessing China’s immense market. Some examples of alleged Chinese IP theft include a conspiracy to hack into U.S. defense contractors’ computer networks to steal sensitive military data and the fact that the Chinese military has infrastructure that can look suspiciously similar to that used by the United States. In the context of urging NATO allies to ban Chinese 5G equipment, Defense Secretary Mark Esper warned at the Department of Homeland Security’s National Cybersecurity Summit last September that China is committing “the greatest intellectual property theft in human history.”
Continue Reading Is Chinese IP Theft Coming to an End?