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10/1/2007
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Two NetLogics Employees Indicted For Economic Espionage

Two men are charged with trying to steal computer chip design trade secrets in an attempt to start their own company with funding from the Chinese government.

Two employees at NetLogics Microsystems have been indicted for allegedly trying to steal trade secrets on computer chip design that they were going to use in a company they were starting on their own.

Lan Lee, aka Lan Li, 42, of Palo Alto, and Yuefei Ge, 34, of San Jose, were both indicted by a federal Grand Jury in San Jose on charges of conspiracy to commit economic espionage and to steal trade secrets. The government contends they were conspiring to steal information from both NetLogics and from Taiwan Semiconductor Manufacturing.

NetLogic Microsystems is a computer chip design and development company based in Mountain View, Calif. Taiwan Semi-Conductor Manufacturing is a computer chip manufacturing company with facilities in Taiwan, San Jose, Calif., Singapore and Washington state.

According to the indictment, Lee, who is an American citizen, and Ge, who is a Chinese national, created their own company, SICO Microsystems. The U.S. Attorney's Office reports that they planned on using the stolen trade secrets to develop and market products with the new company. The men allegedly were looking for venture capital funding from the Chinese government, the U.S. Attorney added.

"The vigorous enforcement of intellectual property statutes increases the economic vitality of this region, and adds to the security of our nation as a whole," said U.S. Attorney Scott N. Schools, in a written statement. "This office is committed to the prosecution of individuals who seek to benefit foreign governments or instrumentalities with stolen trade secrets."

The indictment also alleges that Lee and Ge were trying to take advantage of the 863 Program and the General Armaments Department within the Chinese government.

The 863 program, explained the DOJ, is a funding plan created and operated by the government of the People's Republic of China, and also is known as the National High Technology Research and Development Program of China. The program was designed by leading Chinese scientists to develop and encourage the creation of technology and focused on issues, such as high technology communications and laser technology, with an emphasis on military applications.

The General Armaments Department of the People's Liberation Army was responsible for the Army, Navy, and Air Force in the People's Republic of China, and oversaw the development of weapons systems used there, according to the DOJ.

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