SAN JOSE, Calif. — Spies in the heart of Silicon Valley. Or
two gifted engineers looking to jump-start a new company that could do business
in booming China with their own superfast computer chip.
Those were the two competing stories presented Wednesday to
a federal jury in San Jose, where valley engineers Lan Lee and Yuefei Ge find
themselves facing one of the nation’s first trials on charges of economic
espionage to aid a foreign government.
A federal grand jury has indicted Lee, 44, and Ge, 36, on
charges of violating provisions of the 1996 espionage act, as well as stealing
trade secrets from their former employers, Mountain View, Calif.-based NetLogic
Microsystems, and chip manufacturer Taiwan Semiconductor. At the heart of the
indictment is the allegation that Lee and Ge stole NetLogic chip technology six
years ago to establish a rival company backed by the Chinese government.
Calling Lee and Ge “traitors” to NetLogic,
Assistant U.S. Attorney Matthew Parrella told the jury that the case was about
stealing cutting-edge chip designs to set up a company that was backed by a
Chinese venture capital program and China’s military.
“There is no doubt about it,” the prosecutor said.
“They planned to build, market and sell in China the chip that is a direct
Parrella told jurors that the government would present a
“treasure trove” of evidence that the two engineers conspired to
steal NetLogic’s technology, including e-mails and material found on their home
computers linking them to business plans with China and its venture capital
arm, known as the “863 program.” Government attorneys also said they
have evidence the two stole company secrets from Taiwan Semiconductor.
But while the prosecutor unveiled how the alleged scheme was
exposed, including anonymous e-mails and phone calls to NetLogic executives and
the FBI from Ge’s wife, defense lawyers offered a very different portrait.
In statements to the jury, defense attorneys August
Gugelmann and Tom Nolan said the men were carrying out the most commonplace of
Silicon Valley stories — using their engineering know-how to build their own
company with their own ideas.
Lee and Ge, they said, did not steal trade secrets, and
never intended to benefit China.
“This case isn’t really about economic espionage, it’s
not about spying, and it isn’t about stealing trade secrets,” Gugelmann
said. “What this case is really about is our clients wanting to start a
company of their own based on their own ideas, their own design.”
The defense also made clear it would attack the FBI’s
pursuit of the engineers, saying Ge’s wife tipped off agents because she didn’t
want her husband to start his own business but that there was never any
evidence to back up her claims they were stealing from NetLogic. She is
expected to testify in the trial.
The case against Lee, a Palo Alto, Calif., resident, and Ge,
of San Jose, is the second in the nation to go to trial under the specific
provision of the 13-year-old law making it a crime to steal technology to aid a
foreign government. A former Boeing and Rockwell International engineer was
convicted this summer in federal court in Santa Ana, Calif., for illegally
shipping trade secrets to China.
The San Jose trial is expected to last about three weeks.