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Published On: Mon, Nov 5th, 2018

PRC Company and three Individuals Charged with Economic Espionage

A federal grand jury indicted a state-owned enterprise of the People’s Republic of China (PRC), a Taiwan company, and three individuals, charging them with crimes related to a conspiracy to steal, convey, and possess stolen trade secrets of an American semiconductor company for the benefit of a company controlled by the PRC government. All of the defendants are charged with a conspiracy to commit economic espionage, among other crimes.  Attorney General Jeff Sessions, FBI Director Christopher Wray, Assistant Attorney General for National Security John Demers, Assistant Attorney General for the Criminal Division Brian A. Benczkowski, United States Attorney Alex G. Tse of the Northern District of California, and FBI Special Agent in Charge for the San Francisco Field Office John F. Bennett made the announcement.

In addition, the United States filed a civil lawsuit seeking to enjoin the further transfer of the stolen trade secrets and to enjoin certain defendants from exporting to the United States any products manufactured by UMC or Jinhua that were created using the trade secrets at issue.  The indictment was filed on September 27, 2018, and unsealed today. The civil lawsuit was filed today.

“I am announcing that a grand jury in San Francisco has returned a multi-defendant indictment alleging economic espionage on the part of a state-owned Chinese company, a Taiwanese company, and three Taiwan individuals for an alleged scheme to steal trade secrets from Micron, an Idaho-based semi-conductor company,” said Attorney General Sessions.  “Micron is worth an estimated $100 billion and has a 20 to 25 percent share of the dynamic random access memory industry—a technology not possessed by the Chinese until very recently.  As this and other recent cases have shown, Chinese economic espionage against the United States has been increasing—and it has been increasing rapidly.  I am here to say that enough is enough. With integrity and professionalism, the Department of Justice will aggressively prosecute such illegal activity.”

“The theft of intellectual property is not only unfair, but stifles technological innovation by disincentivizing investment in long-term research and development,” said U.S. Attorney Alex Tse.  “The theft of intellectual property on a continuing basis by nation-state actors is an even more damaging affront to the rule of law. We in the Northern District of California, one of the world’s great centers of intellectual property development, will continue to lead the fight to protect U.S. innovation from criminal misappropriation, whether motivated by personal greed or national economic ambition.”

“No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China,” said FBI Director Christopher Wray. “The Chinese government is determined to acquire American technology, and they’re willing use a variety of means to do that – from foreign investments, corporate acquisitions, and cyber intrusions to obtaining the services of current or former company employees to get inside information.  If China acquires an American company’s most important technology – the very technology that makes it the leader in a field – that company will suffer severe losses, and our national security could even be impacted.  We are committed to continuing to work closely with our federal, state, local, and private sector partners to counter this threat from China.”

According to the indictment, the defendants were engaged in a conspiracy to steal the trade secrets of Micron Technology, Inc. (Micron), a leader in the global semiconductor industry specializing in the advanced research, development, and manufacturing of memory products, including dynamic random-access memory (DRAM).  DRAM is a leading-edge memory storage device used in computer electronics.  Micron is the only United States-based company that manufactures DRAM.  According to the indictment, Micron maintains a significant competitive advantage in this field due in large part from its intellectual property, including its trade secrets that include detailed, confidential information pertaining to the design, development, and manufacturing of advanced DRAM products.

 

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