Have trade secrets, will travel…

We regularly hear from the U.S. government about the theft of intellectual property by Chinese companies and their government. This is just one of several examples that I have reviewed and analyzed in the past week. I am sure that there are many more attempts that go unreported.

In February 2012, Hanjuan Jin, a former software engineer for Motorola, Inc., was found guilty of stealing more than 1,000 electronic and paper documents from Motorola. Jin was caught by U.S. Customs while attempting to catch a one way flight to China. She had worked for Motorola since 1998. Why did she decide to steal Motorola’s trade secrets? Had she stolen intellectual property prior to 2007? We’ll probably never know…

The 2007 theft was not a “spur of the moment” decision. It had been in the planning phases for approximately a year.

In February 2006, Jin took a medical leave of absence. Between November 2006 and January 2007, Jin flew to China and worked for Sun Kaisens, a Chinese telecommunications company that developed products for the Chinese military. Jin had already spent June through November 2006, in China negotiating with Sun Kaisens. While working for Sun Kaisens, Jin was provided access to classified Chinese military documents.

In February 2007, the plan to steal trade secrets from Motorola kicked in to high gear:

  • February 15, Jin returned to the US from China.
  • February 22, she bought a one way ticket back to China.
  • February 23, she notified Motorola she wished to return to work.
  • She went back to work on February 26. Once back on the company’s premise, she accessed large volumes of proprietary documents during normal work hours as well as after hours. She was also observed leaving the building with various documents and possibly a laptop.
  • February 27, she volunteered for a layoff from Motorola.
  • February 28, Jin was caught trying to leave the country with over 1,000 electronic and paper documents belonging to Motorola. She also had a number of documents marked “secret” belonging to the Chinese military.

Interestingly, Jin was found her not guilty of three counts of economic espionage for the benefit of the People’s Republic of China and its military. She faces a maximum penalty of 10 years in prison on each count of stealing trade secrets.

Given Jin’s frequent trips to China, and the fact that the theft had been in the planning phases for 12 months, it is anyone’s guess regarding how much of Motorola’s intellectual property Sun Kaisens or the Chinese government were able to gain direct access to. Since Jin spent time in China prior to the theft attempting to convince Sun Kaisens to employ her, she likely shared information from memory. Also, since Jin had been employed with Motorola since 1998, it is possible that she had taken information over time in the event that a move to China was in her future.

This case underscores why it is important to protect your company’s trade secrets. Ask yourself the following questions:

  • Does your company have trade secrets? Can you list them?
  • How are they used within the business?
  • Where are they stored?
  • What has the company put in place to control and monitor access?
  • How would the company know that an employee is about to steal trade secrets?

There are a number of additional questions involving the alignment of people, processes and technology and the protection of trade secrets, but the questions above should generate sufficient food for thought.

Protecting trade secrets requires a multipronged approach. If there are any gaps in the approach, employees or third parties intent on stealing intellectual property will find them. Don’t believe me? Sanofi-Aventis also has experience dealing with Chinese foreign nationals and the theft of trade secrets. For more on that case, click here.

Arguably, the theft of intellectual property can do more damage to a company than the theft of cash. A company can earn more money to replace the money that was stolen, but once a trade secret is no longer “secret”, the damage is done. Many companies look to the legal system to punish the entity or individual that stole their trade secrets. Certainly, the courts can help. But if your organization cannot demonstrate that it took steps to appropriately protect its trade secrets, the courts may not look too kindly on your claim.

Be proactive! Invest the time and effort to protect your company’s intellectual property. Once your intellectual property is in stolen, you may be a company in name, but in reality, you are a shadow of your former self.

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter or white paper you get an accomplished writer that is also an expert in fraud.

paul@mccormackwrites.com

Advertisements

About Paul McCormack
I have over 20 years of experience in corporate fraud and intellectual theft prevention, detection and investigation. Unlike many fraud experts, I have both industry and professional services experience. To date, I have conducted over 800 interrogations of fraud suspects including numerous senior corporate executives. As a freelance writer, I have written over 1,000 articles on a broad range of topics. My areas of expertise include: • Asset Misappropriation • Big Data • Bribery, Corruption, and Collusion • Check, Wire, ACH, and Credit Card Fraud • Consumer Fraud • Corporate Security • Cybersecurity • Data privacy (Europe, Brazil, Russia, India, and China) • Drug Trafficking • Embezzlement • Employee Fraud • Executive Protection • Fintech • Financial Statement Fraud • FCPA • Healthcare fraud • Identity Theft • Intellectual Property Theft • Internal Audit • Interrogation Tactics • Loss Prevention • Mobile Fraud • Money Laundering • Operational Excellence • Organized Crime • Payments Fraud • PCI Compliance • Retail Fraud • Risk Management • Terrorism and Counterterrorism • UK Bribery Act • Workplace Violence

One Response to Have trade secrets, will travel…

  1. Pingback: Help wanted – willingness to share trade secrets a must « Fraud Happens

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: