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Intellectual Property Law

: Womble Trade Secrets Blog

Defendant in Silicon Valley Economic Espionage Act Trial Blames His Own Wife for Investigation and Prosecution

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Yesterday we covered opening arguments made by the prosecution in this important economic espionage prosecution. Today we copy you on Law.com's report of the defenses' opening - and this is pretty good.

Had Silicon Valley engineer Yuefei Ge spent more time listening to his wife, the government's economic espionage case against him would never have been born, his defense lawyer told a federal jury Wednesday.

Ge and a co-worker, Lan Lee, stand accused of stealing trade secrets from their employer, NetLogic Microsystems, and trying to secure venture funding from the Chinese government. August Gugelmann, of Swanson McNamara Haller, said in his opening statement that Ge's wife tipped off NetLogic -- and then the FBI -- about the scheme, but that "the whole story was just made up." She didn't want Ge spending so much time on the new business and away from his family, he said.

"She talked about it a lot. He didn't listen," Gugelmann said. "He should have listened."

Trial began Wednesday after defense lawyers challenged the government's attempt to strike the only two Chinese-American men from the jury venire.

In trying to offer a race-neutral explanation, Assistant U.S. Attorney Joseph Fazioli said the government didn't think one of the jurors -- a middle-aged software engineer -- answered questions truthfully. The man said he traveled to China on business, but didn't have any opinions about the government or its IP regulations, Fazioli said.

"We found that answer implausible," he said, adding that the man also hesitated before answering and avoided eye contact with prosecutors.

Judge James Ware rejected the explanation. "It is discriminatory in its very articulation," Ware said, and the juror was eventually seated.

However, Ware accepted Fazioli's reasons for ejecting the other Chinese man. That individual was much younger than the other jurors, lived at home, and wore jeans to court, Fazioli said. Prosecutors believed him to be immature compared to the rest of the panel, a possible loner who might have trouble deliberating -- a possible holdout, Fazioli said.

Spectators drifted into Ware's San Jose, Calif., courtroom in the afternoon to watch openings.

Parrella's, which lasted about 50 minutes, involved technical explanations of the chip data the two defendants allegedly stole. When the FBI searched their home computers, they found business plans and other incriminating documents.

"What they found was a treasure trove," said Parrella, who heads the U.S. attorney's computer hacking unit.

But Gugelmann and Lee's attorney, Thomas Nolan, said nothing the government found was actually a trade secret. The documents found on their computers would be useless in trying to construct a chip, Nolan said, while the defendants could have easily walked off with other schematics that would have cost NetLogic millions.

Instead, the government was motivated by the anonymous tipster who turned out to be Ge's wife. "This is not about economic espionage, it's not about trade-secret theft," Gugelmann said. "It's really about their marriage."

Full post as published by Womble Trade Secrets Blog on October 23, 2009 (boomark / email).