Huawei Indicted for Theft of Trade Secrets
On January 28, 2019, the government indicted two affiliates of the Chinese company Huawei Technologies (one of the world’s largest communications equipment manufacturers), for theft of trade secrets under the Economic Espionage Act. The indictment filed in the Seattle alleges that the two affiliates began an effort in 2012 to steal trade secrets from a competing telecommunications company. In addition, the government also brought a separate indictment in NYC against Huawei, two of its affiliates, and its Chief Financial Officer, Meng Wanzhou, alleging that Huawei and Meng misrepresented their relationship with their Iranian affiliate, Skycom Tech. Additional allegations include bank fraud, wire fraud, violations of U.S. sanctions on Iran, and conspiracy to obstruct justice related to the investigation. These charges are the latest in the Justice Department’s targeted prosecution of Chinese trade secret and economic espionage cases, or the China Initiative, which the DOJ announced in November 2018. Other recent criminal cases against Chinese companies or individuals working on their behalf include (i) charges against a former Phillips 66 employee and Chinese national who attempted to steal battery technology trade secrets on behalf of a Chinese company, (ii) charges against a Chinese company for attempting to steal technology trade secretsfrom Micron Technology related to the research of development of dynamic random-access memory (DRAM), and (iii) charges against former employees of biotech firm Genentech who attempted to steal trade secrets about the development of cancer drugs to assist a Taiwan-based company.
Chinese Engineer Sentenced to 27 months for Theft of Trade Secrets
A Chinese engineer who, as an employee, stole confidential and proprietary trade secrets related to medical devices from from Edwards Lifesciences Corp. and a Medtronic was sentenced on January 28, 2019, to 27 months in prison by a California federal. Wenfeng Lu, 46, pled guilty in May to six counts of unauthorized possession and attempted possession of trade secrets for a scheme that ran from January 2009 until 2012, when he was arrested. Despite signing numerous contracts acknowledging that he was working with proprietary technology at both companies, Lu copied numerous documents that contained trade secrets from both companies, took them home, put them on his laptop, and then made several trips to the People’s Republic of China, often right after having stolen the intellectual property. According to prosecutors, he’d gotten financing to start his own business in China, where he would make devices used to treat vascular problems with the technology he’d stolen in the United States.