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Intellectual Property Law

: Womble Trade Secrets Blog

Guilty Plea By Former Engineer in Ford Motor Trade Secret Case

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The Wall Street Journal is reporting that an engineer who went to work for a Chinese competitor pleaded guilty Wednesday in federal court to two counts of stealing trade secrets, prosecutors said.

Xiang Dong Yu, aka Mike Yu, of Beijing, China, is expected to return to court in Detroit on Feb. 23 for sentencing. According to his plea agreement, the 49-year-old should receive a prison term between 63 and 78 months based on losses worth more than $50 million to Ford, according to his plea agreement with prosecutors. He remains in federal custody.

The plea deal also requires that Mr. Yu be deported after his time behind bars. An attorney for Mr. Yu didn't immediately return a call for comment Wednesday.

The case is one in a recent spate in which federal prosecutors have charged former auto-industry employees with connections to China for taking intellectual property from the Detroit Three auto makers and their U.S.-based suppliers. In July, a federal grand jury in Detroit accused two engineers of stealing documents worth roughly $40 million related to hybrid technology at General Motors Co. The pair, who are of Chinese descent, are expected to return to federal court in early December for a pre-trial hearing.

According to the plea agreement in the Ford case, Mr. Yu was a product engineer at the Dearborn, Mich. auto maker from 1997 to 2007. In December 2006, on the eve of his departure from Ford, Mr. Yu copied some 4,000 Ford documents onto an external hard drive, according to his plea deal. The majority of the design documents copied by Mr. Yu didn't relate to his work at Ford.

In November 2008, Mr. Yu began working for Beijing Automotive Company. Upon his arrest in October 2009 in the U.S., the FBI discovered that 41 Ford design documents had been copied to Mr. Yu's Beijing Automotive Company work computer. It was unclear from court documents whether Beijing Automotive directly benefited from the stolen designs or even knew about their theft.

Full post as published by Womble Trade Secrets Blog on November 18, 2010 (boomark / email).