Lan Lee, 42, of Palo Alto, Calif., and Yuefei Ge, 34, of San Jose, Calif., were arrested "on charges of conspiracy to steal trade secrets and five counts of theft of trade secrets," U.S. Attorney Kevin Ryan said.

A federal grand jury in San Jose Thursday (June 15) indicted Lee and Ge. The indictment was unsealed Friday at their initial appearance.

Lee, an American citizen, and Ge, a Chinese national, appeared before Magistrate Judge Howard Lloyd on Friday, and were released on $300,000 bond. Their next scheduled appearance is scheduled for June 21.

The maximum statutory penalty for each count of conspiracy to commit theft of trade secrets, as well as the substantive counts of theft of trade secrets, is 10 years and a fine of $250,000, plus restitution if appropriate.

According to the indictment, Lee and Ge are alleged to have conspired to steal trade secrets from their employer at the time, communications-chip maker NetLogics Microsystems (Mountain View, Calif.), and another company, where they were not employed, silicon foundry provider TSMC (Hsinchu, Taiwan).

The defendants allegedly created a company, Sico Microsystems Inc., "for the purpose of developing and marketing products derived from and using the stolen trade secrets," according to the U.S. attorney's office. "The trade secrets involved related to computer chip design and development."

Lee and Ge were senior design engineers at NetLogic. They reportedly resigned from the company three years ago, according to NetLogic.

"The protection of proprietary information is essential to this region's economy," Ryan said in a statement. "A tremendous amount of resources go into producing the chips and software that are designated as trade secrets, and we are committed to the prosecution of individuals who steal those trade secrets in an attempt to get an unfair advantage in the technology industry."

"Development of proprietary business information, commonly called Trade Secrets, is an integral part of virtually every aspect of U.S. trade," said Acting Special Agent in Charge Arthur Balizan of the Federal Bureau of Investigations (FBI), in the same statement. "Protecting Trade Secrets is essential to maintain the health and competitiveness of critical segments of the U.S. economy."

Matt Parrella is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by special agents of the FBI. NetLogics and TSMC cooperated with the FBI in the investigation.

By: DocMemory
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