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

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

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This past Friday, President Barack Obama and Chinese President Xi Jinping announced that the United States and China had reached a “common understanding” to fight state-sponsored, corporate cyber espionage between the countries.

During a joint press conference, President Obama said that “neither the U.S. nor the Chinese government will conduct or knowingly support cyber theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”  President Jinping added that “both governments will not engage in or support online theft of intellectual property.”


Continue Reading U.S. and China Agree on Joint Efforts Against Theft of Corporate IP

The recent arrests of Chinese nationals for alleged economic espionage are raising eyebrows across American industries, who are rightfully asking how they can protect themselves from becoming the next foreign target. U.S. universities have been key figures in these headlines. The risk of economic espionage is a serious one for higher education because universities are

The International Trade Commission (ITC) issued a Limited Exclusion Order (LEO) excluding imported crawler cranes from Chinese manufacturer Sany Heavy Industry Co that were designed and manufactured using the misappropriated trade secrets and patented inventions of Manitowoc Cranes. The Commission’s final determination in the In Re Certain Crawler Cranes and Components Thereof investigation (Inv. No. 337-TA-887) confirms that the ITC is a favorable forum in the fight against foreign intellectual property theft, especially in cases where jurisdiction may be difficult to establish in U.S. Courts.

The ITC issued its Final Determination affirming, in part, Administrative Law Judge Shaw’s Final Initial Determination that Chinese heavy machinery manufacturing company Sany Heavy Industry Co. had misappropriated Manitowoc Cranes trade secrets in developing its products, infringed on two of Maitowoc’s patents, and harmed the U.S. domestic crawler crane industry. The ITC determined that at least one product infringed certain claims of one of Manitowoc’s patents and that six trade secrets of Manitowac’s were protectable as trade secrets and misappropriated.


Continue Reading ITC Excludes Chinese Company for 10-Years for Trade Secrets Misappropriation

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Many U.S. lawyers are surprised when I tell them that China has legal protection for trade secrets.  Although China’s trade secret protections are scattered across several statutes, the most important is the Anti-Unfair Competition Law (AUCL). Article 10 of the AUCL defines a trade secret as technical and business information unknown to the public which has economic value and practical utility and for which the trade secret owner has taken measures to protect its confidentiality. Article 10 of the AUCL prohibits three forms of misappropriation:

  • The acquisition of a trade secret by theft, inducement, duress or other illegal means;
  • The disclosure or use of a trade secret acquired by the above-described illegal means; and
  • The disclosure or use of a trade secret in breach of an agreement or confidentiality obligation imposed by the trade secret owner.


Continue Reading Surprise: Trade Secrets Are Protected In China

The chair of Temple University’s physics department has been indicted for allegedly providing U.S. technology to China. Dr. Xioaxing Xi, a U.S. citizen and native of China, is an expert in the field of magnesium diboride thin film superconducting technology. According to the indictment, Xi was involved in a scheme over many years to funnel thin film superconducting technology to third parties in China.
Continue Reading Chair of Temple University’s Physics Dept. Indicted for Providing U.S. High Tech to China

On May 16, Hao Zhang, a Chinese university professor, was arrested upon entering the U.S. as one of six defendants charged with participating in a conspiracy to steal trade secrets and commit economic espionage against the United States. Their alleged goal was to set up a factory in the People’s Republic of China (PRC) that would develop and manufacture a series of high technology products that would have both civilian and military applications.

The 32-count indictment alleges that, with the financial support of the PRC and the PRC’s Tianjin University, in eastern China, the six conspirators established a shell corporation in the Cayman Islands, Novana, and a plant that could produce products from the information stolen from the U.S. entities. The conspirators had filed for patents in both the U.S. and PRC.


Continue Reading Six PRC Citizens Charged With Economic Espionage

For the first time, the U.S. Department of Justice has indicted a Chinese state-owned enterprise for violating the Economic Espionage Act, in connection with efforts to acquire manufacturing technology for titanium dioxide, a white pigment commonly used in paint, plastics and paper. The indictment specifically alleges that “the People’s Republic of China (PRC) publicly identified