Over the last several years, the United States government has increased its criminal enforcement efforts to protect American trade secrets from foreign nations. In a prime example, a July 2010 Grand Jury in the US District Court for the Eastern District Michigan handed down an indictment against a Michigan couple Yu Qin (Chin) and Shanshan (Shannon) Du for Unlawful Possession of Trade Secrets in violation of the Economic Espionage Act (EEA) [18 U.S.C. §1832(a)(3), (a)(5)]. In this matter, the federal government accused the defendant couple of theft and conspiracy to gain economically from the theft of thousands of General Motors electronic documents pertaining to proprietary electric engine components.
The 2010 indictment outlines a detailed and calculated business tactic wherein former GM employee Shannon Du allegedly requested at one time to be repositioned to work within the hybrid motor control systems division of GM, gaining access to secret GM documents and information. Simultaneously, Du’s husband and co-defendant Yu Chin worked for an electrical power equipment manufacturing company, while also establishing several international and domestic joint ventures, including “Millenium Technology International, Inc. (MTI) that aimed to engage in the business of power electronics. Yu Chin allegedly utilized information gained from thousands of proprietary and trade secret GM documents stolen by his wife and co-defendant Du on portable electronic storage device, in order to “seek employment in the hybrid vehicle area promote himself by referencing capabilities directly related to the GM trade secret information.” (Complaint).
Importantly, the text of 18 U.S.C. §1832 makes criminal any attempt or conspiracy to knowingly engage in the theft of trade secrets. Furthermore, this section of the EEA is underscored by its economic justifications, requiring that any misappropriated trade secret be produced for or placed in interstate commerce to garner protection. The July 2010 indictment indicates that Yu Chin utilized an electronic storage devices and email to upload and transfer particular GM confidential documents, including a “ GM trade secret computerized model that simulates and assesses hybrid motor control.” The co-conspiracy is highlighted in the alleged venture between the co-defendants MTI business in a new venture to provide hybrid vehicle technology to “Chery Automobile,” a Chinese automotive company and GM competitor.
Also outlined in the July 2012 Indictment were claims against both defendants under 18 U.S.C. §1512(c)(1) for obstruction of justice, for allegedly unloaded large garbage bags full of shredded proprietary GM documents into a dumpster behind a grocery store, after preliminary investigative interviews by the FBI.
In September 2011 both parties entered into a stipulated protective order pursuant to 18 U.S.C. §1835 (orders to preserve confidentiality), outlining a particularized format for viewing confidential GM materials during discovery. This is a common and important practice utilized by government in EEA prosecutions, aligning the US government’s socioeconomic policy concerns with GM’s objectives in protecting proprietary GM information at the heart of their stake in the international automobile industry.
After the exchange of several pretrial motions and replies, the trial of co-defendants Qin and Du commenced on October 30 under Honorable Marianne O. Battani, and is expected to last for several weeks.
In its most recent motion, the prosecution on Nov. 1 requested an order precluding the defense from cross-examining Robert Gragg, a US Attorney’s Office computer forensic examiner. This request comes after the defense informed the prosecution via email of their knowledge of Gragg’s purported destroying of computer evidence in a separate civil matter involving GM. While not uncommon and likely granted, if said application is denied, cross-examination of Gragg could potentially call into question some digital evidence relied upon by the United States here.