The United States Attorneys’ Offices in Wisconsin criminally prosecuted two trade secret theft cases last week. In the Eastern District of Wisconsin (United States of America v. Tan Liu), the United States charged a former employee, Tan Liu, with 12 counts of stealing trade secrets from his former employer, Rockwell Automation, Inc. According to the government, in the last few weeks of his Rockwell employment, and in anticipation of leaving Rockwell for a new employer, Liu downloaded 2,500 files that contained the proprietary software and source code Rockwell uses to operate various systems and controllers.

In response, Liu argued that he only downloaded the files because he worked from home and, as such, needed the files on his home computer in order to perform his job duties as a Senior Embedded Software Engineer for Rockwell. Liu further argued that he never forwarded the 2,500 files to any electronic device other than his personal home computer, and his “lack of forwarding” was further evidence that he had no intention of taking this information with him to a new employer. After three days of testimony, the court sided with Liu and found Liu not guilty.

In the Western District of Wisconsin, and in any case that will likely impact both trade secret law and international relations between the United States and China, a jury convicted Sinovel Wind Group Co., a Chinese wind turbine manufacturer, of orchestrating an $800 million trade secret theft against American Superconductor.

In 2005, American Superconductor agreed to partner with Sinovel on various wind power projects wherein Sinovel would build the turbines and American Superconductor would develop the software and technology that operated and controlled the turbines. Instead of paying American Superconductor approximately $800 million for the developed software and technology, however, two Sinovel employees and a rogue American Superconductor employee stole American Superconductor’s software and technology, and then gave the software and technology to Sinovel. After receiving the stolen software and technology, Sinovel backed out of its $800 million contract with American Superconductor and began using the stolen software and technology in its wind turbines.

At trial, Sinovel argued that the rogue American Superconductor employee and its two Sinovel employees acted alone, and without Sinovel’s knowledge, encouragement, or approval, in stealing American Superconductor’s software and technology. Unfortunately for Sinovel, the jury did not believe Sinovel and convicted Sinovel of trade secret theft, conspiracy to commit trade secret theft, and wire fraud. Sinovel now faces billions of dollars in penalties and sentencing is set for June 4.

We will continue to monitor the Sinovel case so please check back for updates.

The two cases mentioned above can be found at “U.S. v. Sinovel Wind Group Co. Ltd.,” W.D. Wis. No. 13-00084 (jury verdict January 24, 2018), and “U.S. v. Tan Liu,” E.D. Wis. No. 16-CR-000079 (verdict January 26, 2018).