In a sequence of events we don’t see with regularity, a U.S. company’s intellectual property (IP) is being protected by the laws and courts of another country. This is exactly what Boise, Idaho-based Micron Technology is experiencing in Taiwan, Republic of China, where three of United Microelectronics Corporation (UMC) employees were indicted for the alleged theft of Micron’s trade secrets, specifically the DRAM chip manufacturing technologies.
Taiwan’s Prosecutor’s Claims
The prosecutor claims that three employees of UMC violated the “Trade Secrets Act” and the “Copyright Act,” according to the Taipei Times. These individuals are Ho Chien-ting (何建廷), Wang Yong-ming (王永銘) and Rong Le-tien (戎樂天). Ho and Wang are former Micron employees.
Ho and Wang are alleged to have pilfered the Micron IP on their way out the door to UMC. Ho is alleged to have stolen classified trade secrets and to have allowed these to be used by Fijian Jinhua Integrated Circuit Company (Jinhua) in the People’s Republic of China (PRC) in the manufacture of memory chip wafers. Wang’s alleged act was a bit more subtle, as he is alleged to have stolen manufacturing technologies and protocols, which he presented to Rong, a UMC technical division associate, to speed UMC’s processes.
When Rong learned that Taiwan law enforcement conducted a raid of the UMC plant located in Tainan, Taiwan, he apparently “instructed Wang and Ho to delete all related information.”
Micron Takes UMC, Jinhua to Court
According to the Idaho Statesman, Micron believes its former senior executive, Stephen Chen, joined UMC and then began recruiting Micron employees for UMC. In doing so, he is alleged to have induced Ho and Wang to bring with them the IP of Micron.
Micron in its complaint alleges Chen, Ho, Wang and Rong all conspired to steal Micron’s IP. The complaint states, “UMC and Jinhua orchestrated and executed one of the boldest schemes of commercial espionage in recent times. Defendants (UMC and Jinhua) stand to profit handsomely from their scheme. UMC is prepared to make hundreds of millions of dollars for its purported ‘development work,’ and Jinhua plans to avoid hundreds of millions of dollars in costs and many months of R&D effort that honest competition would require.”
The Taiwan criminal trial documents included in the Micron vs UMC/Jinhua court filing detailed the papers, devices and storage media that had been confiscated. Micron alleges (and the Taiwan court documents seem to confirm) Wang and Ho copied their IP onto USB drives as well as made hard copies and took the information with them. As alleged above, the information is believed to have been provided to UMC and then to Jinhua to leverage the R&D conducted by Micron in Boise. In an interesting twist, Micron noted Jinhua received approximately $5.65 billion in investment money from the PRC government in support of its first fabrication facility and Jinhua plans to be in DRAM production in 2018.
Is This a Case of a Nation State-Supported Industrial Espionage?
While Jinhua is not a state-owned enterprise, it certainly is a state-supported enterprise.
The multiyear targeting of Micron’s technology was, as Micron’s lawyers claim, a sophisticated industrial espionage endeavor. Nation states, including the PRC, excel in espionage, especially those endeavors that require a significant amount of time to evolve from concept to execution to bearing fruit. The targeting and theft of Micron’s IP fits this description.
While egg is clearly on the faces of both UMC and Jinhua, Chen has now gone on to become president of Jinhua in the PRC, according to Micron’s filing—not exactly punishment by UMC for his part in the industrial espionage.
Then, in what appears to the distant eye as a piece of tit for tat, UMC has countersued Micron, but not in the United States or Taiwan. Rather, the suit was filed in the Fujian province in the PRC, where Jinhua is located. The suit asks for $42 million in damages, alleging that Micron has infringed on DRAM technologies, and throws in a request for injunction—in an attempt to hit Micron where it hurts—on the production of DRAM.
The Micron’s U.S. civil lawsuit continues—with a “case management conference” to be conducted March 18—as does its defensive efforts in the PRC countersuit.