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In a Taiwanese court, Micron was awarded $3.4 million by a court ruling that three current and former engineers from United Microelectronics Corp. (UMC) of Taiwan stole chip manufacturing secrets on behalf of a rival – and the rival (Fujian Jinhua IC Co.) is supported by the Chinese government. (Both companies and the Chinese government have denied any IP theft).
Micron is a US-based maker of semiconductors (one of the few remaining) and a global leader in memory chips.
An End-Around Attack
The interesting aspect of this case, and one that should be cautionary for IP holders everywhere, is that the theft was not the result of a frontal assault – not the hacking of Micron’s network to steal its IP, or that the theft occurred on Micron’s property, or that the theft even occurred in the US but was the result of a supplier to Micron and a competitor falling behind.
Engineers lured away by higher wages and bonuses
The three engineers worked for Micron in Taiwan and later offered much higher wages by UMC; however, when they left Micron they took many IP secrets with them.
IP taken from Micron by departing engineers via thumb drive
This valuable IP was later passed on to Jinhua via thumb drive (another example of why data ports should be banned or disabled). Perhaps an even more audacious fact was that one of the three engineers was double-dipping – getting a salary from both UMC and Jinhua at the time!
Bottom Line
IP theft may not be so direct as someone walking out the door of your company with a briefcase stuffed with papers – or a hacker in a darkened room somewhere breaking into your network. Instead, IP theft can be via the end-around – using an intermediary to do the dirty work for a third party who can then deny any involvement (shades of a spy thriller: a la “Mission Impossible”).
Micron was fortunate that Taiwan shows strong support for IP, wants US support, and investigated the matter. If this were to happen in another country (more easily swayed by China or another country) they may not have been so lucky.
If you value your IP your should carefully consider where outside the US you sent it.
US IP protection stops at the US border
This is yet another warning about letting IP go beyond US borders – protection stops there. Even securing IP protection overseas is limited by the strength (or weakness) of that country’s legal system – and its resistance to outside influence.
Are you worried about your supply chain partners stealing your IP and using it against you? I can help with that.
