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Silicon Valley espionage case only second of kind in nation to go to trial [BC-CPT-ESPIONAGE:SJ](San Jose Mercury News (CA) Via Acquire Media NewsEdge) SAN JOSE, Calif. _ By the time the FBI came knocking on their doors in July 2003, engineers Lan Lee and Yuefei Ge were already caught in the cross hairs of a government investigation into whether they were stealing technology from their Silicon Valley employers to establish a rival company backed by China. More than six years later, the story of their suspected theft of superfast computer chip plans is about to emerge from the shadows. In the second trial of its kind in the nation, the engineers are set to face economic espionage charges in federal court in San Jose. Jury selection is scheduled to begin Tuesday. Lee, 44, and Ge, 36, are among just a handful of defendants to face federal charges under a section of the 13-year-old Economic Espionage Act, designed to prevent the illegal transfer of technology to foreign governments. While a number of defendants have pleaded guilty and been sentenced, only one other has gone to trial _ a former Boeing Co. and Rockwell International engineer convicted this summer in Santa Ana, Calif., federal court for passing critical information on the space program to China. For Silicon Valley, where companies have worried for years about their prized secrets being leaked to China and other countries, such a trial is a window into the complexities of protecting product information in a place with ties to every corner of the global economy. The trial also is fraught with pitfalls for prosecutors and the defense, both of whom are entering largely uncharted territory of how jurors will assess whether trade secrets were illegally stolen for a foreign government, China. "It's challenging for prosecutors in these cases to demonstrate a clear intent to benefit the foreign government," said Scott Frewing, a former federal prosecutor who advises companies on protecting trade secrets. "And the challenge for the defense is that in China, every part of the economy is dominated by the government, so the links are more obvious." Lee and Ge have pleaded not guilty to the charges that include theft of trade secrets and violations of the espionage law. If convicted, they face 10 years or more in prison, although most convicted on economic espionage charges in recent years have received much lower sentences. Ed Swanson, Ge's lawyer, declined to comment. Tom Nolan, Lee's attorney, did not return calls seeking comment. In court papers, defense lawyers suggested Lee and Ge had no intention of doing anything to illegally benefit China. Lee, a U.S. citizen, and Ge, a Chinese national, allegedly stole the blueprints for a superfast computer chip from their employer, NetLogic Microsystems of Mountain View, Calif., and another company, Taiwan Semiconductor, for a Chinese-backed program. The defense does plan to call witnesses with expertise on the technology involved and China's relationship with technology companies, as well as witnesses who will testify about the engineers' character, including wives, co-workers and friends, according to court papers. Assistant U.S. Attorney Matthew Parrella, who is prosecuting the case, declined to comment. (EDITORS: BEGIN OPTIONAL TRIM) In court papers, prosecutors allege Lee and Ge conspired to steal secrets from NetLogic to establish their own startup company with funding from a Chinese venture capital arm called the "863 program" _ which the U.S. says is intertwined with the Chinese government. Court papers show the two men were first uncovered by anonymous e-mail tips to the FBI traced to Ge's wife. Prosecutors have already been dealt one blow when U.S. District Judge James Ware refused to allow them to use the testimony of two other former valley executives who pleaded guilty last year to economic espionage charges. They were supposed to testify about China's "863" program. But prosecutors have other witnesses and material seized from the engineers' home computers, including references to the allegedly stolen data and negotiations with China, court documents show. There are no direct allegations of China's role, except that the technology could be used for the Chinese military and tech businesses. (END OPTIONAL TRIM) China has repeatedly denied any involvement with defendants charged in U.S. courts with stealing trade secrets. (EDITORS: STORY CAN END HERE) Meanwhile, experts say that while the San Jose trial will be an intriguing glimpse into the loss of valley secrets overseas, it also is a reminder that the economic espionage laws are seldom used and most companies wind up protecting themselves. Experts estimate U.S. companies lose more than $40 billion a year from stolen trade secrets. "So, it's two or three (trials) in 13 years," said Steven Fink, president of Los Angeles-based Lexicon Communications, which advises companies on espionage. "Wake me when some real action is going on. The real story is what took so long and why there aren't more of these." ___ (c) 2009, San Jose Mercury News (San Jose, Calif.). Visit the World Wide Web site of the Mercury News, at http://www.mercurynews.com/ Distributed by McClatchy-Tribune Information Services. KeyWords:: BC-CPT-ESPIONAGE:SJ BC CPT ESPIONAGE SJ |