The United States District Court for the Northern District of Illinois recently unsealed a December 13, 2017 indictment of Chinese national, Xudong “William” Yao, who was charged with nine counts of trade secret theft. The charges stem from Yao’s theft of more than 3,000 files between September 2014 and February 2015, including trade secret information such as source code and technical specifications, from an unnamed suburban Chicago locomotive manufacturer. The stolen documents generally pertain to the Illinois manufacturer’s train control systems. According to the indictment, Yao began downloading files just two weeks after beginning his employment with the Illinois company and continued to download files while simultaneously negotiating for and accepting a job with a Chinese “provider of automotive telematics service systems.” He began working for the Chinese company several months after being fired from the Illinois company for reasons unrelated to the theft of documents, and Yao’s employer did not discover the theft until sometime later.
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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

Autonomous vehicle technology, while still young, is already a major catalyst of trade secrets-related litigation. In 2018, Uber settled a lawsuit alleging theft of self-driving technology trade secrets from Waymo (Google’s self-driving car spinoff) for $245 million. With the future of the automotive market (and trillions of dollars) at stake, self-driving technology trade secrets are

In an indictment unsealed last week, the U.S. Department of Justice charged two companies – one based in China and the other in Taiwan – as well as three individuals, with trade secret theft, conspiracy to commit trade secret theft, economic espionage, and other related crimes. These charges are the latest in a recent string

In July 2018, U.S. District Judge James Patterson imposed a $59 million penalty against China’s largest wind-turbine firm, Sinovel Wind Group LLC (“Sinovel”), for stealing trade secrets from a Massachusetts-based technology company, American Superconductor Inc. (“AMSC”). This fine was imposed as restitution to the American company, AMSC, after Sinovel was found guilty of stealing

On June 14, 2018, six former and current Fitbit employees were indicted in the Northern District of California for alleged federal trade secrets offenses. The individuals are accused of either stealing market research regarding fitness tracker opportunities from Jawbone, or stealing internal studies – including a comparison study of consumer behavior in which consumers wore

In a press release last week, the U.S. Justice Department announced charges against a group of international conspirators for allegedly stealing trade secrets from an unidentified Houston company. Those charged include four U.S. citizens, two Chinese nationals, and a Canadian national. The beneficiary of the alleged theft appears to be a China-based company with funding from the Chinese government.

The trade secrets at issue concern a product known as “syntactic foam” – a material used in underwater military equipment (e.g. submarines) and other under water vehicles.  Sources report that the syntactic foam is rare, with only a handful of companies worldwide manufacturing the material.  Those same sources report high barriers to market entry: new market entrants need significant resources to develop the intellectual capital and technology to produce the foam. Here, the plot’s conspirators figured it easier to just steal the trade secrets.
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Fig cookiesThe Criminal Court of Mechelen (Belgium) ruled in favor of Bofin Biscuits against a former production assistant accused of having stolen the assistant director of the cookie baker’s laptop. The laptop allegedly contained the secret recipes of all the cookies produced by Bofin Biscuits. This case is interesting because of the nature of the secrets and also when compared to that of the “fig spread”-case discussed here two weeks ago. It also confirms that trade secret misappropriation cases do not necessary only involve complex matters on state of the art technology owned by large multinationals.

The facts of the case are rather straight-forward. On November 12, 2013 the assistant-director of Bofin Biscuits noticed that his laptop had gone missing during his absence from November 6 to November 11. Images from the surveillance video system of Bofin Biscuits showed that the actual taking of the laptop had not been filmed. The camera hanging outside the assistant-director’s office did show a production assistant walking down the hallway where the office was located, entering it and leaving with something clearly hidden under his coat. During the trial the production-assistant did not contradict that he was the person that had been filmed, but he denied that he had taken the laptop. When asked what he then was hiding under his coat, he claimed not to recall anything.

For the public prosecutor this was a clear cut case and he requested the court to sentence the former production assistant to a six month effective prison sentence and a 4.800 EUR fine. Bofin Biscuits, who had joined the proceedings by suing its now ex-employee for civil injury, requested 1.500 EUR for the still missing laptop, 2.500 EUR for the time spent on recovering the information stored on the laptop, 500 EUR moral damages and a provisional damages amount of 25.000 EUR for having stolen the secret cookie recipes.


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