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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Foreign Engineer Arrested For Trade Secret Theft Involving Medical Technology

Posted in Data Theft, Espionage, Trade Secrets

The U.S. Attorney’s Office in New Jersey recently charged a former employee with stealing trade secrets from a New Jersey medical technology company. 

The former employee, an Indian national, worked in a group at his former employer responsible for the manufacture of pen injectors and pre-fillable syringes.  He resigned from the company last month, and in the weeks leading up to his resignation, “allegedly downloaded 8,000 files containing step-by-step assembly instructions and invoices for equipment to create self-administered disposable pens.”  According to the company’s own internal probe, he also “forwarded about 60 documents containing trade secrets from his work email account to one of his personal email accounts.”  He also allegedly called in sick the day before he resigned, but he was “busily downloading” company files using his work laptop, the complaint says.

Company representatives noticed the suspicious downloads and the authorities were alerted. The FBI then executed a search warrant for his hotel room, where he was staying prior to returning to India. The FBI seized hard drives, computer storage devices, and computers. The employee also informed agents of his plans to return to India in the next couple days. The agents also discovered evidence that he may have intended to use the trade secrets in future employment, including “a résumé and an ‘entrepreneurial finance book.’” According to FBI Agent Laurie A. Allen, “The numerous documents containing BD trade-secret information downloaded by defendant Maniar collectively constitute a veritable tool-kit for mass producing the disposable pen,” Allen said.  This stolen information could be used to set up a competing business.

The U.S. Attorney’s Office has charged the former employee with theft of trade secrets for his own economic benefit, and if convicted, he could face up to 10 years in prison and a $250,000 fine.  The employee has also been sued by his former employer in civil court for trade secret misappropriation in violation of New Jersey’s Trade Secrets Act.  The criminal case against the employee was temporarily placed on hold by Magistrate Judge Steven Mannion on Thursday June 12, as plea negotiations are currently in progress. 

The case highlights the growing use of criminal prosecution as a tool to dissuade theft of trade secrets. The case also highlights the importance of monitoring employee access to secure company databases and limiting access to important data to a need know basis. Furthermore, companies should consider using additional preventive means to prohibit employees from stealing trade secrets, such as configuring computers to restrict access to external devices, blocking a user from uploading information to a web-based site, and/or utilizing software that blocks employees from sending emails to certain domain names and either highlights or restricts the amount of data that can be sent out by a user. In an era in which data is becoming increasingly portable, companies must increase their vigilance in monitoring the use and export of their data and trade secrets.

We will continue to keep you posted as this case progresses.