TRADE SECRETS: Rare Economic Espionage and Trade Secret Trial Underway

An American citizen and a Chinese national are facing more than 60 years in prison for economic espionage and theft of trade secrets. The defendants, Lan Lee and Yuefei Ge, are charged with violating the Economic Espionage Act of 1996 by allegedly stealing confidential computer chip information from former employer NetLogic Microsystems, Inc. and another company, Taiwan Semiconductor Manufacturing Company. NetLogic Microsystems, Inc. is a computer chip design and development company in Mountain View, California. Taiwan Semi-Conductor Manufacturing Company is a computer chip manufacturing company with offices in San Jose, Washington, Singapore and Taiwan. Trial is currently underway in the matter.

The San Jose federal court case, U.S. vs. Lan Lee and Yuefei Ge (Case No. C 06-0424 JW), alleges that the pair illegally downloaded secret technical descriptions of an unreleased computer chip. Lee and Ge then started a company called SICO Microsystems, Inc. and solicited venture capital funding from China under its “863 Program” and its General Armaments Department to fund the company and commercially exploit the stolen information, in competition with their former employer. The FBI was apparently tipped off though e-mails sent by Ge's wife. The pair were originally arrested in 2006 and indicted in September, 2007.

The Economic Espionage Act of 1996 was enacted to prevent illegal technology transfer to foreign governments. The case is one of only a handful brought under the Act and only the second to be decided by jury trial. Prior cases under the Act were decided almost exclusively by judges and most involved domestic espionage.

China's “863 Program,” also known as the “National High Technology Research and Development Program of China” and the “State High-Tech Development Plan,” was created to stimulate the development of advanced technologies and eliminate China's dependence on foreign technologies. The program focuses on developing communications and laser technology for military applications.

Electronic court filings and further procedural and docket information on the case are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl. Court calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.

IP GENERAL: Boalt Hall IP Professor Stephen Barnett Passes Away

Stephen Barnett, Boalt Hall School of Law Professor Emeritus, passed away after a heart attack on October 13.  He was 73.  Mr. Barnett taught at UC Berkeley for 36 years and was an authority on intellectual property law.  Boalt Hall School of Law is planning a memorial service in November.  Donations in Mr. Barnett's memory may be made to the Parkinson Association of Northern California, 900 Fulton Ave., Suite 100-5, Sacramento, CA 95825.

COPYRIGHT, TRADEMARK: NBC sued for Copyright and Trademark Infringement of Typeface Font Software

The Font Bureau, Inc., a well known typeface font designer and provider of typeface font software, sued NBC Universal, Inc. and CNBC, Inc. ("NBC") for trademark and copyright infringement of its typeface font software.  NBC allegedly used the font software on NBC's websites and distributed the software to third parties in breach of its end user license agreement and without obtaining The Font Bureau's permission.  The Font Bureau is seeking an injunction, $150,000 in actual damages or $2 million in statutory damages, whichever is greater, plus attorneys' fees and costs.  The Font Bureau has designed typeface fonts for Apple, American Express, Palm Computing, Hewlett Packard and The Wall Street Journal.
Read more about the case here.

PATENT: Red Hat Urges Supreme Court to Uphold Federal Circuit's "Machine-or-Transformation" Test in Bilski Case

Red Hat, Inc. recently filed an amicus brief in the Bilski vs. Kappos matter, urging the Supreme Court to uphold the Federal Circuit's "machine-or-transformation" test for software patents.  A leading provider of open source software solutions, Red Hat argued that the proliferation of software patents has resulted in new and unknown risks of infringement that many inventors are not willing or financially able to take.  Without the test's limitation on the scope of patentable subject matter, software patents will stifle innovation due to the sheer number of patents granted and the vague boundaries existing in software patent claims.  Bilski  v. Kappos is set for oral argument before the Supreme Court on November 9.  

Red Hat's amicus brief is available by clicking here

PATENT: USPTO Rescinds Controversial New Patent Regulations

The USPTO announced yesterday that it will rescind its highly controversial new patent regulations that were published in the Federal Register in August, 2007 and the subject of a two year battle.  The new rules set limits on the examination of claims in patent applications, continuation applications and requests for continued examinations.  Tafas v. Dudas (now Tafas v. Kappos), 511 F. Supp. 2d 652 (E.D. Va. 2007) sought to invalidate the new rules on the grounds that the USPTO lacked substantive rulemaking authority. A motion to dismiss and vacate the district court decision will be filed jointly by the USPTO and co-plaintiff/appellee, GlaxoSmithKline. 
Read more in the USPTO's 10-8-09 press release, here.