U.S. files indictments alleging Philips trade secrets were smuggled to Chinese rival

Three engineers who worked for Philips are accused of stealing trade secrets for a Chinese competitor in the United States in 2017. According to the indictment published earlier this month, they helped two Chinese companies, Kunshan Guoli and Du, set up a rival X-ray tube development company using Philips’ proprietary information.

According to the U.S. authorities, the three engineers - Chih-Yee J., Fince T., and Vladimir N. - worked for a Philips facility in Aurora, Illinois, that researched, developed, and manufactured X-ray tubes used in CT scans. “The company spent years developing its proprietary X-ray technology and selling devices incorporating this proprietary technology to medical facilities,” the U.S. Attorney’s Office in the Northern District of Illinois said.

In 2017, the Chinese companies Kunshan Guoli and Du recruited and hired the three engineers from the Philips Aurora facility. Using trade secrets stolen by the recruits before they left Philips, the two Chinese companies set up a related Chinese company, Kunshan Yiyuan Medical Technology, the indictment states.

According to the indictment, J. copied trade secret information from internal Philips databases, stole the propriety information on behalf of Kunshan Guoli and Du, and used the stolen secrets to help develop X-ray tubes for the new rival company. J. also shared the stolen trade secrets with T., who used them in her work for the new company. N. also allegedly possessed and used the stolen information in his work at the new company.

“The indictment charges the two Chinese companies and the individuals with conspiracy to unlawfully possess trade secrets,” the U.S. Attorney’s Office said. It is not yet clear when the case will come to trial.