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Professor Convicted of Stealing Trade Secrets for China

A federal judge found a Chinese national and university professor guilty Friday of economic espionage, theft of trade secrets and conspiracy, following a four-day bench trial in San Jose, California.

(CN) — A federal judge found a Chinese national and university professor guilty Friday of economic espionage, theft of trade secrets and conspiracy, following a four-day bench trial in San Jose, California.

Hao Zhang, a 41-year-old professor from Tianjin University in China, was charged nearly five years ago alongside several co-conspirators with economic espionage and the theft of military-grade wireless filter technology — trade secrets expected to benefit of China.

The DOJ compiled years of evidence showing that Zhang conspired to steal crucial information related to certain wireless device filter technology that eliminates interference for a wireless device and even increases certain elements of the device’s performance.

These filters have proven to be incredible advancements in the field of wireless and mobile technology, such as being able to help create smaller, more effective devices for both consumers and the military.

Prosecutors said Zhang stole this information from two companies: Avago, a global developer of analog and optoelectronics components based out of California and Singapore, and Skyworks, a leader in analog semiconductor technology based out of Massachusetts.

Zhang allegedly set out to steal this information from these two companies while plotting with Tianjin University so that it could be used for China’s technological gain.

After a four-day bench trial, U.S. District Judge Edward Davila found Zhang guilty of economic espionage, theft of trade secrets and conspiring to commit both of those offenses.

Assistant Attorney General John Demers said Friday’s ruling from the Obama appointee is a victory for accountability.

“The defendant plotted with Tianjin University to take trade secrets from two U.S. companies, including his own employer, to China for the benefit of the Chinese government,” Demers said in a statement. “Today’s guilty verdict on all counts is an important step in holding accountable an individual who robbed his U.S. employer of trade secrets and sought to replicate the company’s technology and replace its market share. The Department of Justice’s commitment to prosecuting these cases should serve as a cautionary tale to anyone considering doing the same.”

Evidence presented during the trial shows it all started in 2006 when Zhang and his co-conspirators started a business in China that was meant to compete with Avago and Skyworks.

While Zhang did this, another co-conspirator named Wei Pang started working at Avago at around the same time. Once they were in place, Zhang and Pang began to share trade secrets with one other, as well as with other co-conspirators in China.

Zhang and Pang brought Tianjin University, a Chinese government instrumentality according to documents, into their scheme.

Once the university was brought into the picture and began to help formulate a new plan, they left their work in the United States to relocate to China where they started a Cayman Island company known as Novana — all while Zhang continued to obtain a series of patents in his own name using the trade secret information that was taken from Avago.

The DOJ reports the technology that Zhang and his co-conspirators stole took Avago over 20 years’ worth of research and development to create.

FBI Special Agent John Bennett said that Friday’s development should send a clear sign to others that the Justice Department is committed to ensuring that these crimes do not go unpunished.

“Economic espionage is a pervasive threat throughout the United States, particularly to the San Francisco Bay Area and Silicon Valley which is the center of innovation and technology,” Bennett said in a statement.

“While this case exemplifies how easily a few motivated employees can conspire to misappropriate intellectual property for the benefit of the People’s Republic of China, Zhang’s conviction should serve as a warning to our adversaries that the FBI and our partners remain committed to aggressively investigating and prosecuting these crimes.”

Zhang is free on a $500,000 secured bond while he awaits a sentencing hearing set for August.

Daniel Olmos, Zhang’s attorney, had no comment.

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