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    May 21, 2015

    US charges six Chinese over 'theft of trade secrets'


    UNITED States prosecutors have charged six Chinese nationals, including three university professors, over a years-long scheme to steal mobile-phone technology trade secrets for Beijing's benefit.

    One of them has been arrested in the US, and China said yesterday it was "severely concerned" over this.

    According to a 32-count criminal indictment filed on April 1 and unsealed on Tuesday, the group had led a long-running effort to obtain US trade secrets for universities and companies controlled by the Chinese government.

    Among those charged were Tianjin University professor Zhang Hao, who was arrested upon entry into the US on Saturday, US officials said.

    Five others named in the indictment were believed to be in China, according to a Justice Department official who noted that this was the 11th case brought for economic espionage under a 1996 law.

    All could face lengthy prison sentences if convicted. The charges they face include economic espionage, theft of trade secrets and various conspiracy counts. Each carries penalties that could include 10 to 15 years in prison plus fines.

    On the case, Chinese Foreign Ministry spokesman Hong Lei told a regular briefing that "China is severely concerned about this" and added that Beijing would defend its citizens' rights.

    "The Chinese government firmly opposes and combats thefts of trade secrets in accordance with law," Mr Hong said. "As for this case, we are still checking on the details."

    The scheme led to the theft of so-called thin-film bulk acoustic resonator (FBAR) technology, which enables mobile phones and other devices to filter radio signals and improve performance.

    David Johnson, the Federal Bureau of Investigation's special agent in charge in San Francisco, called the scheme a "methodical and relentless effort by foreign interests to obtain and exploit sensitive and valuable US technology through the use of individuals operating within the US".

    Jeff Rathke, a State Department spokesman, told reporters that "economic espionage is something that we take very seriously", adding that the case shows "the US is committed to protecting US companies' trade secrets and their proprietary business information from theft".

    In a scheme that allegedly dates back to 2006, the six are accused of working to steal trade secrets from California-based Avago Technologies and Massachusetts-based Skyworks Solutions.

    A shell company called Novana was created in the Cayman Islands but led by the Chinese academics and Tianjin University, with Chinese government support to manufacture rival technology products, according to US investigators.

    The Chinese company called ROFS Microsystems used technology stolen from the US firms, according to US officials.

    Zhang, 36, is a former Skyworks employee and a full professor at Tianjin University.

    "We know about academic exchanges and research, but we haven't seen any evidence that these professors were spies," said a man surnamed Feng in Tianjin University's Propaganda Department. "We don't have anything to do with spying."

    He confirmed the school has a professor named Zhang Hao, but said officials were still trying to confirm whether he is the same person.

    "We just heard about this from news reports this morning and we're still unsure exactly what is going on," Mr Feng added.

    Calls to ROFS by Agence France-Presse were not answered.

    ROFS was established as a joint venture between the Chinese university's investment arm and several individuals, including some of the defendants, according to the indictment.

    Investigators said the scheme focused on FBAR technology, which is an important component of mobile communications and was kept under close guard by the two US companies.

    The Chinese defendants schemed to steal the technology and filed for patents in the US and China, presenting themselves as the inventors as they sought funding for the effort, according to the indictment.

    They aimed to sell the FBAR components to mobile-phone makers including Nokia, Samsung, Motorola and LG, noting that the market for the products was worth an estimated US$1 billion in 2006.