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Another Apple Employee-Enroute to China – Arrested – Trade Secrets Theft

On January 22nd the arrest of another Apple employee—hired to work on their self-driving program—was made by the FBI the same day he planned to board a flight to China for stealing Apple trade secrets.

You can’t help but shake your head over the audacity of this theft especially in view of the other Apple employee arrested only seven months earlier (July) before his plan to get on a flight back to China after his alleged theft.

In an effort to better understand and bring more context to what led to this recent (January) arrest, I have reviewed the criminal complaint filed by the FBI against the accused (JIZHONG CHEN).

INSTRUCTIVE

It’s instructive to consider the steps Apple took to protect their IP, as well as their follow-up investigation.

*Quoted and italicized information is extracted from the criminal complaint.

WHEN AND WHY WAS CHEN HIRED?

Chen was hired in June 2018… “…Chen was a core employee on the electrical engineering team and had full access to a subset of the Databases related to his job function on the Project.”

APPLE’S STEPS TO PROTECT THEIR INTELLECTUAL PROPERTY

 “…Apple’s Databases are only accessible with Apple employee credentials and password.”

“…Apple uses an internal software tool to manage requests for project disclosure and maintains a record of all disclosures.”

“…Apple limits access to the building where the Project is developed…limited by badge access.”

“…Before starting at Apple, employees must sign an Intellectual Property Agreement (“IPA”)…

Chen signed an IPA in 2018.

“…even within Apple’s operations, the Project development in the Building is not listed”

“Employees disclosed on the Project must also attend an in-person secrecy training for the Project…

Chen attended the secrecy training on June 13, 2018

“…The [Secrecy] training also covered Apple’s policy prohibiting employees from storing Apple’s intellectual property on devices over which they [Apple] do not have personal control.”

DID IT TAKE LONG FOR CHEN TO ALLEGEDLY START STEALING?

Well, it seems, no time at all.

It appears he felt comfortable enough to start stealing Apple’s self-driving trade secrets the same month he was hired.

According to the criminal complaint (as mentioned above) he attended “Secrecy Training on June 13th, and on June 20th, a photograph of “…an assembly drawing of a wire harness for an autonomous vehicle” was stored on his iPhone.

WHAT RAISED SUSPICIONS ABOUT CHEN?

Last month (January) another Apple employee observed CHEN taking wide angled photographs within the Apple workspace and reported it.

WHAT DID APPLE’s SUBSEQUENT INVESTIGATION REVEAL?

 “…Chen admitted to taking photographs in Apple’s workspace.”

“…Chen conducted a backup of his entire work computer onto a personally-owned hard-drive”

“…Chen’s personally owned computer had over two thousand files containing confidential and proprietary Apple material, including manuals, schematics, and diagrams.”

“…hundreds of files on Chen’s personally-owned computer were photographs of computer screens.”

“…taking a photograph of the computer screen with Apple’s information would circumvent Apple’s internal monitoring of activity on its network.”

“…When Apple’s investigation team went through Chen’s personally-owned phone, with Chen present, they discovered that it had about 100 photographs taken within the interior of Apple’s building. Apple deleted these photographs with Chen’s permission. Chen subsequently kept his personally-owned cellphone.”

QUESTION?

What do you think about the steps Apple took to protect their IP and their subsequent investigation?

Disclaimer: IPPIBlog.com is offered as a service to the professional IP community. While every effort has been made to check information in this blog, we provide no guarantees or warranties, express or implied, with regard to content provided in IPPIBlog.com. We disclaim any and all liability and responsibility for the qualification or accuracy of representations made by the contributors or for any disputes that may arise. It is the responsibility of the readers to independently investigate and verify the credentials of such person and the accuracy and validity of the information provided by them. This blog is provided for general information purposes only and is not intended to provide legal or other professional advice.

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Ron Alvarez is an IP Investigations / Protection writer and licensed private investigator in New York City. He is a former NYPD lieutenant where he investigated robbery, narcotics, internal affairs, and fine art theft cases. Ron is a graduate of the FBI National Academy and earned a B.A. in Government and Public Administration from John Jay College of Criminal Justice in Manhattan. He has published a number of articles on various investigative topics for PI Magazine. Ron is certified by the Interpol-International IP Crime Investigators College (IIPCIC.) as a "Transnational and Organized Crime Intellectual Property (IP) Investigator."

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