Justia White Collar Crime Opinion Summaries

Drill riser buoyancy modules (DRBMs) are the high-tech equivalent of water wings for the miles of steel pipe that extend from drillships to the ocean floor and carry oil from natural deposits tens of thousands of feet below the surface. In 2012, only four major companies in the world produced DRBMs. CBMF was sponsored by China to develop DRBM technology. CBMF partnered with Shi, a Ph.D. with 25 years of experience in offshore structural design. Shi visited factories where DRBM was being produced; the manufacturers took precautions to protect their information. Shi hired former employees of those companies, making clear that they were to provide their former employers’ nonpublic information. CBMF was successful in duplicating the technology. At a pitch meeting by Shi to representatives of a company Shi believed to be Lockheed Martin, FBI agents arrested Shi.Three coconspirators pled guilty to conspiracy to commit theft of trade secrets, 18 U.S.C. 1832; one absconded, and a CBMF employee remained in China. CBMF never appeared, leaving Shi as the only defendant at trial. The D.C. Circuit affirmed Shi's conviction as supported by substantial evidence. The information at issue was not publicly available; it came from a competitor. Shi joined an agreement to acquire and use trade secret information and believed the documents he received contained trade secrets. View "United States v. Shi" on Justia Law

Attia developed architecture technology called “Engineered Architecture” (EA). Google and Attia worked together on “Project Genie” to implement EA. Attia disclosed his EA trade secrets with the understanding that he would be compensated if the program were successful. After Attia executed patent assignments Google filed patent applications relating to the EA trade secrets and showed a prototype of the EA technology to investors. The patents were published in 2012. Google then allegedly excluded Attia from the project and used Attia’s EA technology to create a new venture. Attia sued Google for state law trade secret and contract claims. After Congress enacted the Defend Trade Secrets Act of 2016 (DTSA), 130 Stat. 376, making criminal misappropriation of a trade secret a predicate act under the Racketeer Influenced and Corrupt Organizations Act (RICO), Attia added RICO claims, 18 U.S.C. 1962(c). The Ninth Circuit affirmed the dismissal of the RICO and DTSA claims. The misappropriation of a trade secret before the enactment of the DTSA does not preclude a claim arising from post-enactment misappropriation or continued use of the same trade secret but Attia lacked standing to assert a DTSA claim. Google’s 2012 patent applications placed the information in the public domain and extinguished its trade secret status. The court rejected an argument that Google was equitably estopped from using the publication of its patent applications to defend against the DTSA claim. View "Attia v. Google, LLC" on Justia Law

Jin, a naturalized American citizen of Chinese origin, with a bachelor’s degree in physics from a Chinese university and master’s degrees in physics and computer science from American universities, was employed as a Motorola software engineer, 1998-2007. Her duties involved a cellular telecommunications system: Integrated Digital Enhanced Network (IDEN). While on medical leave in China, 2006-2007, she sought a job with a Chinese company, Sun Kaisens, which develops telecommunications technology for the Chinese armed forces. She returned to the U.S., bought a one‐way ticket to China on a plane scheduled to leave Chicago days later, then downloaded thousands of internal Motorola documents, stamped proprietary, disclosing details of IDEN, which she was carrying with $31,000 when stopped by Customs agents. She stated she intended to live in China and work for Sun Kaisens. She was convicted of theft of trade secrets, but acquitted of economic espionage, under the Economic Espionage Act, 18 U.S.C. 1831, 1832, and sentenced to 48 months in prison. The Seventh Circuit affirmed, rejecting arguments that what she stole was not a trade secret and that she neither intended nor knew that the theft would harm Motorola. The court characterized the sentence as lenient, given Jin’s egregious conduct, which included repeatedly lying to federal agents.p View "United States v. Jin" on Justia Law

Wyko sold parts to tire manufacturers, but in the U.S., provided parts for steel tire-assembly machines only for Goodyear. Wyko contracted with HaoHua, owned by the Chinese government, to supply parts unlike any it had previously built. Goodyear used machines like those Wyko needed. Goodyear asked Wyko to repair tire-assembly machines. Wyko sent engineers. Before their visit, both signed agreements that they might have access to trade secrets or other confidential information and that they would not disclose that information. A security guard reminded them that no cameras were allowed inside the factory. Unescorted for a few minutes, one engineer used his cell-phone camera to take photos that were forwarded to the design team. Wyko’s IT manager forwarded the e-mail to Goodyear. Goodyear notified the FBI. Convicted of theft of trade secrets (18 U.S.C. 1832(a)) and wire fraud (18 U.S.C. 1343, 1349), the engineers were sentenced to four months of home confinement, community service, and probation. The Sixth Circuit affirmed the convictions, rejecting an argument that the photographs did not meet the statutory definition because Goodyear did not take “reasonable measures” to protect secrecy. The court reversed the sentences because the court had not adequately explained its calculation of loss. View "United States v. Howley" on Justia Law