Individual Accountability in the Huawei Trade Secrets Prosecution

April 9, 2019 Articles

In the ongoing legal battle over the alleged theft of American trade secrets by Chinese telecom giant Huawei, one curious aspect is the lack of charges filed against any individual Huawei employees. On February 28, Huawei pled not guilty to charges of trade secret theft in federal court in Washington. This has been one of the most publicized trade secret cases since the DOJ announced the China Initiative in November 2018, prioritizing the quick and effective identification and prosecution of trade secret cases related to alleged Chinese theft of American intellectual property. In January, Huawei was indicted for theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice. The government alleges that Huawei engineers stole information from T-Mobile related to its cell phone testing robot, “Tappy.” The indictment alleges that despite signing non-disclosure agreements with T-Mobile, Huawei engineers took measurements of the robot and even stole a part of the robot for the benefit of Huawei. It also alleges that Huawei offered bonuses to employees who succeeded in stealing confidential information from other companies.

Interestingly, no individual Huawei employees have been named in the indictment, despite numerous allegations regarding individual wrongdoing by Huawei employees in the U.S. and in China. This is in contrast to the government’s charging decisions in other high-profile cases alleging theft of trade secrets for the benefit of Chinese entities, such as the cases against former employees of Genentech and Micron. The decision not to charge any individuals, at least as of now, is especially curious given the DOJ’s stated policy of holding accountable individuals substantially involved in alleged corporate misconduct, as articulated originally in the DOJ’s 2015 Yates Memorandum and affirmed in November 2018. In a separate case against Huawei relating to alleged violations of the Iranian Transactions and Sanctions Regulations, the government has charged Huawei Chief Financial Officer Wanzhou Meng, but she is not charged in the criminal trade secrets case. We will be watching this case closely given its major implications the criminal prosecution of alleged trade secret theft and U.S.-China relations.