And those found guilty go to a real jail cell.
Now you know that Trade Secret theft is on the rise and costing US companies billions of dollars in revenues. You’ve also learned 10 important things about trade secrets and how to protect them. Now, let’s look at three recent examples of trade secret theft that have made the news.
1. Sanofi Aventis – Research Scientist.
Who stole what? A former Sanofi research chemist stole thousands of chemical compounds (a company trade secret) from Sanofi. The research scientist, a 30 year old Chinese national named Yuan Li, had worked for Sanofi for 5 years developing compounds for use in future drugs.
How did she do it? Yuan Li downloaded the trade secret information and used personal e-mail or a USB thumb drive to transfer it to her home computer.
What did she do with the trade secrets? She tried to sell the compounds through, Abby Pharmaceuticals, the U.S. unit of a Chinese company. Yuan Li was a 50% owner in Abby.
What happened to her? Last month, Yuan Li was sentenced to 18 months in prison by a New Jersey Court. She must also pay $131,000 in restitution.
2. Akamai – Finance
Who stole what? Elliot Doxer, who worked in Akamai’s finance department, contacted the Israeli consulate in Boston in 2006, offering to spy on Akamai and pass secret information to them. The Israeli government informed the US government, which set up a sting operation.
What did he do with the trade secrets? Mr. Doxer delivered numerous secret files to an undercover federal agent posing as an Israeli intelligence officer over a period of 18 months. (No information ever made it into foreign hands.)
What happened to him? Mr. Doxer pled guilty to foreign economic espionage and was sentenced to six months in prison, six months home confinement, and a $25,000 fine in December, 2011.
3. Intel – Design Engineer.
Who stole what? A former Intel computer hardware engineer stole 13 secret documents from Intel’s facility in Hudson, Massachusetts. The documents are worth over $1 billion in research and development costs that described Intel’s new microprocessors. Biswamohan Pani, an Indian national, worked for Intel from May 2003 to June 11, 2008.
How did he do it? Mr. Pani resigned from Intel in late May, 2008, saying he was going to work for a hedge fund, and took his accrued vacation time until his last official day on June 11. However, he started working at Advanced Micro Devices, Inc. (AMD), an Intel competitor, on June 2, 2008. That’s right…he worked for both companies for more than a week. From June 3 to June 11, 2008, he remotely accessed an encrypted system at Intel, and downloaded the documents to his hard drive.
What did he do with the trade secrets? Nothing. Intel discovered the breach very quickly, contacted the FBI who acted fast to stop any information from being used. It is thought Pani intended to use the information to advance his career at AMD. It is important to note that AMD denied knowledge of Pani’s wrongdoing, did not ask him to steal the information, and has cooperated fully with federal investigators.
What happened to him? Mr. Pani pled guilty to 5 counts of wire fraud in US District Court in Massachusetts. Each count has a possible sentence of 20 years, as well as a $250,000 fine. The prosecutors are recommending that the judge sentence Pani to six years in jail. Sentencing is scheduled for August 8.
When I see these stories, part of me says “Really, you thought you would get away with this?”, but then I remember that trade secret theft is a real crime. These are the people who were caught. How many more are out there have been successful?
Obviously, the examples here involve big name companies with thousands of employees, but don’t think that trade secret theft is merely a problem for big business. The risk exists for big and small companies, as well as universities, research facilities and non-profits alike.
If you want to protect your organization’s trade secrets, you must be proactive. Identify them early. Have a plan to keep them secret. Educate your employees about intellectual property and what it means to you. Don’t assume everyone who works for you has your best interests at heart.