DuPont foils a US$400 million trade secrets heist

Tuesday, 06 March 2007 00:50 Noric Dilanchian

Should you check computer access records when an employee announces he or she is leaving to join a competitor? The experience of DuPont is instructive, and became public last month. The facts of the DuPont case read like a spy thriller.

Gary Min, a research scientist at DuPoint announced on 12 December 2005 that he was leaving DuPont. What followed uncovered his theft in the months before his announcement. It could have damaged Dupont up to US$400 million in stolen intellectual property.

Having pleaded guilty to theft of trade secrets Mr Min faces sentencing on 29 March 2007 in the District Court of the District of Delaware. His offence carries a maximum prison sentence of 10 years, a fine of up to $250,000, and restitution.

A fuller statement of facts is contained in Guilty Plea in Trade Secrets Case, a press release by the US Department of Justice. Following are three paragraphs from that release which tell the story.

"Between August 2005 and December 12, 2005, MIN accessed an unusually high volume of abstracts and full-text .pdf documents off of DuPont's Electronic Data Library ("EDL"). The EDL server, which is located at DuPont's experimental station in Wilmington, is one of DuPont's primary databases for storing confidential and proprietary information. MIN downloaded approximately 22,000 abstracts from the EDL and accessed approximately 16,706 documents - fifteen times the number of abstracts and reports accessed by the next highest user of the EDL for that period. The vast majority of MIN's EDL searches were unrelated to his research responsibilities and his work on high-performance films. Rather, MIN's EDL searches covered most of DuPont's major technologies and product lines, as well as new and emerging technologies in the research and development stage. The fair market value of the technology accessed by MIN exceeded US$400 million.

After MIN gave DuPont notice that he was resigning to take a position at Victrex, DuPont uncovered MIN's unusually-high EDL usage. DuPont immediately contacted the FBI in Wilmington, which launched a joint investigation with the United States Attorney's Office and the United States Department of Commerce. MIN began working at Victrex on January 1, 2006. On or about February 2, 2006, MIN uploaded approximately 180 DuPont documents - including documents containing confidential, trade secret information - to his Victrex-assigned laptop computer. On February 3, 2006, DuPont officials told Victrex officials in London about MIN’s EDL activities and explained that MIN had accessed confidential and proprietary action. Victrex officials seized MIN's laptop computer from him on February 8, 2006, and subsequently turned it over to the FBI.

On February 14, 2006, FBI and Department of Commerce agents searched MIN's home in Ohio. At the home, the agents discovered several computers which contained DuPont documents marked "confidential." A software erasure program had been launched on an external disk drive of one of the computers, which was in the process of erasing the entire disk drive at the time the agents entered the house. The investigation further revealed numerous garbage bags that were filled with shredded DuPont technical documents, as well as remnants of DuPont documents that had been burned in the fireplace. In addition, the agents learned that MIN stored numerous other confidential DuPont documents in a storage unit and in a one bedroom apartment."

Australian law protecting trade secrets

While details and procedures differ, in Australia confidential information law can be used along with other law to achieve a similar outcome to protect valuable trade secrets. Expeditious legal action can be taken in Australia against an insider (such as an employee, senior executive or board member) or an outside.

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