Former company employee arrested for exposing business secrets

A former employee of a company in Xi'an, Shaanxi province, was arrested on account of exposing the company's business secret in his master's thesis, which resulted in a substantial loss of over 70 million yuan ($980 million).

This case was the highest-value business secret infringement case that was cracked by the police in Shaanxi province, reported Shangyou News on Thursday.

Recently, a national-level high-tech company specializing in the railway industry came to the Gaoxin branch of the Xi'an public security bureau to report that their project, which they have been working on for five years and was co-developed by three companies with an investment of over 100 million yuan, was published on the internet in a master's thesis.

The company made the discovery when they were attempting to apply for a patent for their project.

And it meant that the company lost its advantage in being the first to introduce the technology and the novelty associated with it. As a result, they were unable to apply for a patent and were disqualified for any related scientific and technological innovation awards.

What's more, the company found the writer of the thesis was their former employee surnamed Hao who participated in the project and the efforts trying to persuade Hao to remove the thesis from the internet proved in vain.

The company has to seek help from the police to minimize the loss, the Gaoxin branch of the Xi'an public security bureau formed a special task force.

The biggest challenge of this case lands on whether the technological achievements in question constituted trade secrets, local police told Shangyou News.

In terms of this, local police conducted an extensive comparison in over 20 domestic and international databases. Additionally, third-party institutions were consulted to authenticate the evidence. The investigation pointed out the content of the master's thesis matched approximately 90 percent with the company's confidential technological documents. Moreover, no other identical or similar articles related to this specific technological breakthrough were found during the investigation.

Later on Aug 20, the suspect was apprehended due to the appropriation of business secret by local police.

It turned out that the suspect Hao had worked at the victimized company as a software engineer in 2015. With the purpose to write the thesis for his Master's degree, he stole materials from the company by turning a blind eye to his labor contract and a non-disclosure agreement's requirement.

And it is estimated by a third party that the leakage of the technology had resulted in a financial loss exceeding 70 million yuan.