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In addition to conventional warfare, it was recently confirmed by an arm of the Ukraine Ministry of Defense that it hacked trade secrets from a Russian state nuclear utility, and then leaked the trade secrets to a public website to harm the utility’s commercial prospects. Such “hack and leak” operations have been done before by nation-affiliated hackers to attempt to influence political activities of other nations, but this may be the first operation of this type concerning technical trade secrets during warfare. Although the economic impact from this particular operation may be difficult to gauge at this time, this hack and leak of nation state-affiliated company trade secrets may be a sign of things to come in future armed conflicts.
Continue Reading A New Battlefront: Ukraine Resistance Includes Leaks of Russian Trade Secrets

On April 20th, U.S. Senator Lindsey Graham, R-S.C. introduced Senate bill S. 1245, “The Combating Chinese Purloining (CCP) of Trade Secrets Act.” The full text of the bill is not yet available, but a press release announcing the legislation highlighted key features of the CCP, including:

  • increasing the maximum penalty from 5 to 20 years of imprisonment for individuals who use “communication interception devices” to aid a foreign government;
  • expanding trade secret misappropriation penalties for foreign persons, including by: the U.S. Customs and Border Protection imposing import restrictions, the U.S. Department of Commerce denying export licenses, the U.S. Patent and Trademark Office rejecting applications for patent protection, and the U.S. Department of State denying visas;
  • creating grounds for inadmissibility and deportability for individuals that seek to enter, or remain in, the U.S. to engage in espionage and intellectual property theft; and
  • prohibiting the issuance of visas to Chinese nationals who present a national security risk and to prevent their pursuit of graduate-level coursework in sensitive fields.

Continue Reading Senator Lindsey Graham’s Proposed Legislation Seeks to Combat “Chinese Purloining” of U.S. Trade Secrets

Since its passage in 2016, the Defend Trade Secrets Act (“DTSA”) has become a powerful tool for litigants seeking civil redress for the misappropriation of trade secrets to get into federal court.  The DTSA is particularly important because it allows litigants to seek redress for misappropriation that happens outside of the United States – overcoming the general presumption that federal law does not have an extraterritorial reach.  We recently discussed the significance of the DTSA’s application across the globe and how to effectively achieve quick recourse.
Continue Reading The Sedona Conference Publishes An Analysis of How to Seek Global Redress of Trade Secret Misappropriation

On December 20, 2020, the US Senate unanimously passed a new bipartisan bill designed to punish foreign individuals and corporations involved in intellectual property theft.

The Protecting American Intellectual Property Act was co-authored by Sen. Ben Sasse, R-Neb., and Sen. Chris Van Hollen, D-Md.  The bill requires a report to Congress every six months identifying:

  • any individual or firm that has engaged in, benefitted from, or materially assisted the significant theft of U.S. trade secrets, if that theft constitutes a major threat to the national security, foreign policy, economic health or financial stability of the United States; and,
  • the chief executive officers and board members of the reported firms and whether those individuals have benefitted from the significant theft of U.S. trade secrets.

Continue Reading Senate Passed New Legislation to Punish Foreign Individuals and Corporations for IP Theft

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

China’s National People’s Congress has released a draft law for comment that would impose harsher criminal penalties for any trade secret theft from Chinese companies that benefits foreign companies.

China’s current law imposes a maximum sentence of 3 years imprisonment for “serious” instances and 10 years for “particularly serious” instances of trade secret theft. The proposed law would impose harsher sentences for trade secret theft benefiting a foreign entity, resulting in 5 years for “serious” instances and a minimum of 5 years with no maximum for “particularly serious” instances.
Continue Reading China Proposes Harsher Penalties for Trade Secret Theft in Draft Amendment

On February 13, 2020 the United States filed a sixteen-count superseding indictment against Huawei Technologies Co., Ltd. and several U.S. based subsidiaries (collectively “Huawei”) charging Huawei with racketeering, money laundering, and violating U.S. sanctions against Iran. The new charges, announced by the United States Attorney’s Office for the Eastern District of New York, the Justice Department’s Criminal and National Security divisions, and the FBI, are the latest of a number of enforcement actions by the U.S. Government against Huawei, and yet another escalation in the U.S. Government’s quest to prevent Huawei from stealing trade secrets and other sensitive intellectual property from American companies.
Continue Reading New Charges Leveled Against Huawei, et al.