Chinese-citizen engineer at San Jose tech firm stole secrets, brought them to Chinese firm, jury says in awarding major damages

Development engineer Gangyi Chen stole trade secrets from a San Jose technology company and brought them to a Chinese firm, according to a Silicon Valley jury that ordered the payment of $66 million in damages to his former employer.

Chen, a Chinese citizen with a UCLA PhD, was working for Lumileds, a San Jose company making LED lighting, when he was recruited by publicly traded Chinese electronics company Elec-Tech International, according to a lawsuit filed by Lumileds. Chen signed an employment contract with ETI before leaving Lumileds — and days before he left, smuggled out thousands of files containing company secrets, according to the suit.

A law firm representing Chen and ETI said the jury’s verdict was disappointing, but that they would appeal.

“As we asserted during the trial, Elec-Tech independently developed its own process for LEDs and never took, nor used any of Lumileds’ technology,” law firm Jeffer Mangels Butler & Mitchell said in a statement.

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“Further, the technology they asserted in this case is all generally known and cannot be claimed to be proprietary in any way.”

Chen, after quitting Lumileds in 2012, moved back to China, bringing the secrets with him and receiving a significant career boost, the suit claimed.

“Though employed as a research engineer at Lumileds, since starting his employment with ETI, Chen has been promoted to vice president and is one of the most senior executives of the company,” the suit claimed. “He is one of ETI’s highest-paid executives.”

In its verdict delivered Friday, the jury found that Chen, who worked at Lumileds from January 2005 to June 2012, had misappropriated Lumileds’ secrets and that ETI had used them. Chen started at Lumileds the year after receiving a PhD in chemical engineering from UCLA, according to Lumileds’ suit for theft of trade secrets against Chen and ETI, filed in Santa Clara County Superior Court in San Jose.

Chen’s recruitment at ETI was part of a larger campaign to pilfer employees — and intellectual property — from Lumileds, the suit claimed. “Several employees recruited from Lumileds were fired or resigned within months of joining, after they refused to share trade secrets of Lumileds,” the suit alleged.

Lumileds’ legal action against ETI and Chen in state court followed an unsuccessful federal-court lawsuit in 2014. A judge found Lumileds’ case, which was brought under the Computer Fraud and Abuse Act, was not covered by it.

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