Chinese Trade Secrets Theft Hits US Universities

Chinese trade secrets theft, although extensive, has generally focused on US businesses.


Now, in a new twist, Reuters reports that three Chinese researchers at NYU Langone Medical Center have been charged in federal court with bribery in connection with theft of trade secrets relating to MRI technology.

The researchers apparently received at least $400,000 in bribes to provide information to a Chinese Medical Imaging company, United Imaging Healthcare, and a Chinese government-backed research institute, Shenzen Institute of Advanced Technology.

The three were charged in federal court in the Southern District of New York where the US Attorney doesn’t play.

Man Bites Dog!

From the Morning Whistle, an unsourced report that publisher and education company Pearson has been sued for stealing the trade secrets of a Chinese competitor, CentriPoint (China).

According to the report, Pearson VUE, Pearson’s computer-based testing division, acquired Certiport on May 15, 2012, but decided to suspend the online service of Certiport (China).

That company now claims that Pearson stole its client list under the pretense of an audit and informed customers of the change without prior consent of the other shareholders of Certiport (China).

An initial court date is scheduled for May 23, 2013.

Trade Secrets Finally Gets Toward the Top of the National Agenda

You know trade secrets has finally hit it big when the subject is covered in USA Today and the report is on the Obama Administration’s a new strategy to combat the theft of American trade secrets.


The administration has released its 141-page Strategy on Mitigating the Theft of U.S. Trade Secrets. This comes just after the president signed an executive order “designed to help U.S. computer networks guard against cyberattacks,” as USA Today put it.

The story contains comments from Victoria Espinel, the U.S. Intellectual Property Enforcement coordinator.

In the words of USA Today:

“The strategy includes diplomatic engagement with nations where incidents of trade secret theft are high, working with industries on the best ways to protect their secrets, and stepped up prosecutions of business espionage.”

The plan comes out at the same time as reports of Chinese Red Army hacking into U.S. computers.

Espinel says: "The administration will continue to act vigorously to combat the theft of American trade secrets that could be used by foreign companies or foreign governments to gain an unfair commercial advantage over U.S. companies."

Sounds like we’re finally getting serious about a problem that has been allowed to grow for years.

Bratz-Mattel Doll Fight Ends Not with a Bang But a Whimper

We’ve covered this case, it seems, this the beginning of time. (See, for example, an earlier summary here.)


Now it looks to be all over.

A précis goes like this: designer leaves Mattel to go to MGA Entertainment where he designs the popular Bratz line of dolls. Mattell sues MGS for copyright infringement and gets a $100 million verdict and the rights to Bratz going forward.


The Ninth Circuit finds that amount excessive and sends the case back down to the trial court where the jury finds nothing for Mattel, but returns a $170 million verdict against Mattel on a counterclaim for theft of trade secrets, along with $137 million in attorneys’ fees.

Now the Ninth Circuit vacates that verdict, finding it time-barred. The attorneys’ fees, however, stick.

It’s time to find a cautionary tale here, but the case is so weird we may just need to chalk it up as a one-off.

A Video Overview of the Economic Espionage Act

From me (click the link), a short description of the recent changes in the EEA.

Do Computer Fraud & Abuse Act Prosecutions Sometimes Go Too Far?

Offered here without commentary, an article from Slate concerning the recent suicide of Aaron Swartz who was set to go on trial next month for violations of the Computer Fraud & Abuse Act for unlocking a database of scholarly articles.


Prosecutors charging decisions – particularly the amount of prison time and penalties to be sought – are generally discretionary, rarely reviewable, and certainly subject to abuse (and not just under the CFAA).

There should be near unanimous agreement that what happened to Aaron is sad and, if an over-reaching prosecution played a role, something that ought to be rectified.

More on Economic Espionage Act Amendments

From IP 360, a story concerning the amendments to the Economic Espionage Act.


The story quotes John Marsh of Hahn Loeser & Parks LLP as saying that the two bills passed by Congress represent "a strong commitment by the federal government to broaden the protections of trade secrets."


The bill, once it’s signed by the President, will increase the maximum penalty for misappropriating trade secrets to benefit a foreign government from $500,000 to $5 million for individuals and also applies the law more broadly to the services industry.

The big question on tap for 2013: will Congress create a federal civil remedy for trade secrets theft as a cognate to the criminal statute represented by the EEA?