COURT DOC: Chinese National Sentenced for Economic Espionage and Theft of a Trade Secret From U.S. Company

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June 14, 2016

Xu Jiaqiang, 31, formerly of Beijing, China, was sentenced yesterday to five years in prison, for economic espionage and theft of a trade secret in connection with Xus theft of proprietary source code from Xus former employer, with the intent to benefit the National Health and Family Planning Commission of the Peoples Republic of China. Xu previously pleaded guilty to all six counts with which he was charged.

From November 2010 to May 2014, Xu worked as a developer for a particular U.S. company (the Victim Company). As a developer, Xu enjoyed access to certain proprietary software (the Proprietary Software), as well as that softwares underlying source code (the Proprietary Source Code). The Proprietary Software is a clustered file system developed and marketed by the Victim Company in the United States and other countries. A clustered file system facilitates faster computer performance by coordinating work among multiple servers. The Victim Company takes significant precautions to protect the Proprietary Source Code as a trade secret. Among other things, the Proprietary Source Code is stored behind a company firewall and can be accessed only by a small subset of the Victim Companys employees. Before receiving Proprietary Source Code access, Victim Company employees must first request and receive approval from a particular Victim Company official. Victim Company employees must also agree in writing at both the outset and the conclusion of their employment that they will maintain the confidentiality of any proprietary information. The Victim Company takes these and other precautions in part because the Proprietary Software and the Proprietary Source Code are economically valuable, which value depends in part on the Proprietary Source Codes secrecy. (Source: U.S. Department of Justice)

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