IP Theft: Definition and Examples

Intellectual property (IP) theft is when someone robs a company of its creative expressions, designs, inventions, or trade secrets – collectively known as intellectual property. In short, intellectual property is the intangible property belonging to an organization.

IP theft can lead to serious financial damage to a company. In the long term, it can result in decreased business growth and loss of competitive edge.

There are times when organizations aren’t even aware that their IP has been stolen. Even when they do discover it, the theft isn’t always made public. Most companies disclose a cyberattack only when customers’ medical or financial information has been stolen. This makes tracking IP theft even more difficult. While only a small percentage of all IP theft cases are reported, IP theft is far more prevalent than one would imagine.

We’ve created this guide to provide a variety of examples of IP theft to help you understand what IP theft is, how it can be carried out by hackers, malicious actors, or insiders, and the ramifications of intellectual property theft. Below, we’ve rounded up dozens of examples of real-world cases of IP theft.

Examples of IP Theft

Let's look at some examples of IP theft to help you better understand the need to keep your intellectual property secure.

1. Electric vehicle manufacturers dispute over stolen trade secrets.

Two companies manufacturing electrical vehicles have locked horns over stolen intellectual property. Tesla sued a manufacturer of electrical SUVs over stealing its trade secrets. According to Tesla, 70 employees left the company and joined their rival company, Rivian Automotive, and took trade secrets with them. However, Rivian claims that Tesla filed this suit only to damage its reputation.Whatever the truth is, Tesla is a company known for defending its trade secrets, and it has previously filed lawsuits on other self-driving companies as well. Twitter: @DigitalGuardian

2. Biotech company employee steals data on the third attempt.

A company’s security system shouldn’t just block a possible IP theft but also raise an alarm when an employee tries to steal sensitive data. Rongzan Ho was employed at AbbVie, a biotech company. He left the company and joined its competitor, Alvotech, and took with him trade secrets related to the manufacture of a drug. When employed at AbbVie, Ho attempted to email himself secret company information twice but couldn’t do it because of the company’s security system. He allegedly was successful the third time and he carried that information with him to Alvotech. Twitter: @DigitalGuardian

3. Employee stole secrets from a logistics firm to start his own firm.

An employee joined a logistics firm with the sole purpose of stealing intellectual property, as alleged by the hiring company, Vanguard Logistics Services. They hired Fraser Robinson, an ex-Uber executive, as a board member. Robinson later left the company and started his own company, Beacon Technologies Ltd., which was backed by Uber founders and Amazon’s CEO. Vanguard Logistics has claimed that Robinson took the company’s intellectual property with him, while Beacon has refuted these claims. Twitter: @DigitalGuardian

4. Yacht company IP stolen by insider via USB.

USB storage devices are small and can store several gigabytes of data. This is what makes them a risk to a company’s data security. Yacht companies are no different. Perhaps this is why Cameron O’Connell allegedly copied the intellectual property of his employer, a luxury boat manufacturer, to a USB flash drive. Allegedly, he used his own login details to access the information. It’s not clear whether the yacht company had enough security measures in place to prevent insider theft. Twitter: @DigitalGuardian

5. A sugary war over trade secrets.

If the Willy Wonka movie has taught us anything, it’s that candy bar recipes must be kept secret. This is why when Mars learned that its trade secrets were copied by its former employee and taken to JAB Holding Co., a coffee company, they filed a lawsuit against the employee. Mars alleged that the employee, Jacek Szarzynski, stole over 6,000 sensitive company documents and joined a rival firm. The IP theft was done using personal USB drives and emails. Twitter: @DigitalGuardian

6. Company IP stolen by its inventor.

While you can limit an employee’s access to the company’s resources, it might not be easy to limit access by the developer of the company’s IP. In a lawsuit, Corrosion Prevention Technologies accused the developers of its product, CorrX, of stealing the product details and creating their own companies. While it’s unclear how the former employees allegedly stole the company data, it seems like the only safeguard to prevent data theft was a confidentiality agreement. Twitter: @DigitalGuardian

7. Metal fabrication company employees steal IP and jump ships.

In this complicated case, a metal fabrication company, ATM Machines, was acquired by NRI ATM, a materials manufacturer. ATM Machines was also being eyed by Plant Services, another material manufacturing company. When ATM was acquired by NRI, the latter got hold of all the IP of the former. The case involves two employees of ATM who continued working under NRI. They soon resigned and joined Metal Works. They also allegedly took their former employer’s IP with them. NRI has several non-disclosure agreements with its employees, but as many examples have shown, confidentiality agreements are not silver bullets against IP theft. Twitter: @DigitalGuardian

8. Chinese researcher steals vials of biological research.

Stealing vials of biological research from a lab and taking them back to your own country sounds like the perfect plot for a movie. This happened in real life when Zaosong Zheng, a Chinese national, allegedly stole 21 vials of research from a laboratory he was working in. He tried to flee the country with the vials hidden in a sock in one of his bags. He was caught by federal officers and a criminal complaint was filed against him. Twitter: @TheJusticeDept

9. Corporate entities conspire to steal trade secrets from an oil & gas manufacturer.

In yet another movie-style theft of IP, a Chinese national, Lei Gao, was charged with conspiracy and theft of intellectual property. Gao met Robert Erford, an employee in a Houston-area company, and promised Erford a job in China as a consultant in his firm. In return, Erford transferred documents from his Houston-area company to Gao. An investigation of the case was carried out by the FBI and Gao is now believed to be living in China, with an outstanding warrant against him. Twitter: @TheJusticeDept

10. Chinese national steals trade secrets worth over $1 billion.

Rival countries often attempt to steal each other’s intellectual property secrets. In a case, a former scientist, Tan, was accused of stealing IP worth over $1 billion from his employer, a U.S.-based petroleum company. Tan was an associate scientist and was working on developing battery technologies for energy storage. He downloaded and copied confidential company data on a thumb drive. He then copied and deleted some files from the drive and returned it to the company. The files were later found on his personal external hard drive. Twitter: @TheJusticeDept

11. Anti-ice aircraft IP stolen.

A company’s intellectual property has significant value, not just in dollars but also in the amount of effort put into it. When an employee steals trade secrets from one company and sells it to another, it leads to innumerable losses for the creator company. This is why Craig German was sentenced to 70 months in prison for stealing trade secrets from the aircraft company he worked for. He stole the design information for a new anti-ice aircraft to help one of the company’s competitors. The investigation was carried out by the FBI, and German was later sentenced. Twitter: @TheJusticeDept

12. Businessman sets up a subsidiary company to steal trade secrets.

Since there are so many cases of IP theft, it isn’t surprising to find out that some companies are set up specifically to steal trade secrets. Shan Shi of Houston had an agreement with a Chinese scientific manufacturing company and opened up a subsidiary company. He employed several people from the victim company and used its trade secrets to develop syntactic foam. The defendant also wanted to leak the secrets to the People’s Republic of China. Shi was later sentenced to prison for 16 months in prison. Twitter: @TheJusticeDept

13. Nintendo hacker boasts of his “accomplishments,” gets caught.

Some hackers and insiders steal trade secrets for money. Others do it just to boost their ego. Ryan Hernandez of Seattle hacked into Nintendo servers and stole confidential information about gaming consoles and video games. He boasted about his exploits on social media platforms. When the FBI searched his house, they found not only Nintendo trade secrets but also child pornography. As a remediation cost, he was sentenced to pay over $250,000 to Nintendo. Twitter: @TheJusticeDept

14. Ex-employee kept accessing confidential documents even after quitting.

In this case, an engineer left his company, and even after quitting, he kept accessing the company’s confidential information. He claims he did it for “continuity.” Jason Needham quit his engineering job at Allen & Hoshall and set up his own firm. However, he then hacked into his old employer’s FTP server and downloaded emails, documents, and schematics. Even though the company regularly changed passwords, he still managed to break in. He was sentenced to 18 months in prison and was assessed a hefty fine. Twitter: @TheRegister

15. Google alleges Otto stole its secrets.

Waymo, the self driving car company previously owned by Google, claimed that Anthony Levandowski, an ex-employee, stole its trade secrets to start his own company. According to Waymo, Levandowski stole about 14,000 confidential files on self-driving technology and used them for his own company, Otto. Otto was later acquired by Uber. When employed at Google, he helped develop several driverless cars for the company. He later copied files and left Google to start his own company. Twitter: @guardiannews

16. NSA employee copies classified information.

IP of NSA and other government organizations can be a target for foreign governments, which is why it is always strongly safeguarded. And yet, there have been several cases of leaks in defense security. In one incident, Nghia Hoang Pho, an ex-NSA employee, took home classified information including hacking tools. These tools were later stolen from his home computer by Russian agents using a vulnerability that possibly came from the Kaspersky antivirus program installed on his computer. Pho was sentenced to 66 months in prison. Twitter: @ZDNet

17. Tesla employees informed about a sabotoge operation.

Tesla CEO Elon Musk emailed his employees and informed them of possible sabotage. According to Musk, an employee changed the code of internal products and exported the data to outsiders. Since Tesla is a huge company, it’s not surprising that its rivals are after its secrets. In 2016, a SpaceX rocket exploded while fueling, and the possibility of sabotage was alleged. Under these circumstances, it makes sense for Tesla to be very vigilant. Twitter: @CNBC

18. Security guard crashes former employer’s system.

In a movie-style hacking incident, Yovan Garcia, a security guard, logged into an admin account to add hours to his payroll data and earn a total of over $6,000. When the hack was discovered and it traced back to Garcia’s patrol car, he made up a story of being reached out to by a rival firm. He even named a few security colleagues as the rival company’s moles. As a result, those employees got fired. He again hacked into the system for his own gains and when confronted, resigned in anger. After resigning, he hacked the company website to defame its image. A detailed investigation later showed that Garcia conspired against the company and stole its trade secrets to start his own company. He was sentenced to pay $318,000 in damages. Twitter: @BleepinComputer

19. Chinese IP theft nearly killed an American company.

In a case that unravels like a spy novel, American Superconductor, an energy technology company, partnered with Sinovel, a Chinese wind turbine company, and opened business in China. AMSC developed technology to power Sinovel’s turbines. It soon turned AMSC into a billion-dollar company. The cold-war-style attack started when Sinovel refused to pay for the $70 million shipment it had already received from AMSC. It also refused to pay for another shipment that was ready to be delivered. As it turned out, Sinovel had bribed an AMSC employee and received the source code for wind turbine control software, and thus didn’t need AMSC anymore. This almost killed AMSC. An investigation took place, and the court ordered Sinovel to pay for AMSC’s losses. Twitter: @CNNbusiness

20. Economic espionage leads to closing of space platform technology gap.

The U.S. leads the world in space platform technology, and radiation hardened integrated circuits (RHICs) are an important part of it. These components are export-controlled, which means countries like Russia and China cannot get their hands on them, except in 2015 when they actually did. These countries bribed Peter Zuccarelli of American Coating Technologies with $1.5 million and got the RHICs illegally exported. Zuccarelli created false labels and exported the RHICs to Russia and China, thereby bridging the space platform technology gap between the U.S. and other countries. He was later sentenced to 46 months in prison and ordered to pay a fine of $50,000. Twitter: @TheCDSE

21. Espionage attempt using sensitive photographs.

Photography is usually prohibited in locations important for national defense. Taking photos of sensitive areas and sending them to a foreign government is an espionage attempt. This is exactly what Bryan Underwood, a former U.S. Marine did. After losing hundreds of thousands of dollars in the stock market, he decided to make money by selling national secrets. He wrote a letter to the Chinese government to setup a deal. He took more than 30 photographs of secure areas and created a schematic with them. However, his photos and letters were caught by a guard. An FBI investigation foiled his plans, and he was sentenced to 9 years in prison. Twitter: @TheCDSE

22. Defense contractor sends insider data to other countries.

In another espionage case, Hannah Robert, a former defense contractor, sent sensitive data to several countries. Robert owned two companies that were in contract with the U.S. Department of Defense (DoD). She had access to sensitive export-controlled data such as drawings of torpedo system parts and military attack helicopter systems. She sent the data to India and other countries using a password-protected church website. An investigation revealed the truth, and she was sentenced to 57 months in prison. Twitter: @TheCDSE

23. Non-profit organization makes profits off espionage.

Anyone with access to sensitive defense information can use it for their own gains. This case revolves around Stewart Nozette, the president of Alliance for Competitive Technology (ACT), a non-profit organization. Using this organization, he defrauded NASA, Defense Advanced Research Projects Agency, and the U.S. Naval Research Laboratory and made $265,000. He also evaded $200,000 in taxes. In 2009, he was contacted by an undercover FBI agent pretending to be an Israeli officer looking for classified information. Nozette agreed to provide the information and was thus caught in the act. He was sentenced to 13 years in prison along with fines. Twitter: @TheCDSE

24. Conspirator sends corn seeds from Iowa to China.

Developing genetic formulas for specialized crops is something that takes years of research. Stealing and selling these formulae is a serious offense. In one case, Mo Hailong worked in a branch of the Beijing Dabeinong Technology Group. He took corn seeds from Iowa and sent them to China where their genetic traits could be reproduced. He also facilitated the purchase of farmland. The theft of corn impacted U.S. companies that earned over $1 billion in Chinese revenues. Hailong was convicted and sentenced to three years in prison. Twitter: @TheCDSE

25. Petty officer sells national documents for his greed.

It seems harming national security for money isn’t that rare. In another case of human greed, Bryan Martin sold secret government documents about current naval operations to someone he thought was a Chinese spy. Martin allegedly was facing financial issues due to his excessive gambling and indulgence in prostitution. Turns out that the “Chinese spy” was an undercover FBI officer. He was sentenced to 34 years in prison. Twitter: @TheCDSE

26. Research scientist sells trade secrets to China.

Competing countries are often looking for trade secrets, and as many examples have shown, China is believed to have leveraged aggressive spying techniques. In this example, Wen Chyu Liu, a research scientist at Dow Chemical Company, conspired with other employees of the company and stole elastomer trade secrets to send them to China. He even traveled through China to market the stolen information. As a result, the company suffered the loss of valuable research along with profits from its projects. He was sentenced to two years of supervised release and fines. Twitter: @TheCDSE

27. National research chemist sold sensitive pharmatech information.

Dealings of national interest with China can sometimes be tricky. In another case of IP theft, a Chinese national research chemist, Yuan Li, downloaded sensitive information from her employer, Global Pharmaceutical Company, and took it home. She then put the information on sale through Abby Pharmatech, a U.S. branch of a Chinese company. Li had a 50% partnership in Abby Pharmatech. As a result, the victim company lost valuable research. Li was sentenced to 18 months in prison. Twitter: @TheCDSE

28. Dual citizen tries to leak U.S. defense data to Iran.

While any insider can carry out IP theft, the risk increases with some specific factors such as dual citizenship, traveling to another country multiple times, and bankruptcy. All these factors applied to Mozaffar Khazaee, a contractor who had worked with three different companies. In 2013, he tried to ship a container to Iran. The container was packed with sensitive documents, technical data, and other proprietary material related to U.S. defense jet engines. A dual citizen of the U.S. and Iran who had visited Iran several times, he was arrested in 2014 in possession of such sensitive information. He was sentenced to 97 months in prison along with fines. Twitter: @TheCDSE

29. Insider tries to sell nuclear secrets to other counties.

When people are fired from their jobs, some of them simply find new jobs. Others try to harm their former employers and as a result, end up in prison. Charles H. Eccleston did the latter. He used to work at the Nuclear Regulatory Commission (NRC) and tried to hack federal agency computers. He was fired as a result, and he moved to the Philippines. In 2013, he went to the foreign embassy and offered to sell thousands of email accounts belonging to U.S. energy agency employees. He was caught by undercover FBI officers and was sentenced to 18 months in prison. Twitter: @TheCDSE

30. The Falcon and the Snowman case.

This interesting story has been turned into a movie, “The Falcon and the Snowman.” Christopher Boyce was a defense industry employee who conspired with Andrew Lee to steal and sell U.S. classified information. Lee traveled to Mexico and handed the secret documents to KGB handlers. Both were paid thousands of dollars for this information. As a result, U.S. communication ciphers were compromised and long-held trade secrets were lost. The duo was later caught, and Lee was sentenced to life in prison. Boyce was sentenced to 40 years in prison. Twitter: @TheCDSE

31. Insiders try to sell Coca-Cola’s secret formula.

Coca-Cola has always kept its formula a secret. While there have long been rumors that it might include cocaine, some others think it might be bugs and suspect this is why it is kept a secret. In one incident, three Coca-Cola employees got their hands on the secret formula and approached Pepsi to sell it. However, Pepsi didn’t appreciate the snitching and blew the whistle on them, so the three employees were arrested. Twitter: @VethanLawFirm

32. IP theft victim company wins $845 million in a court case.

In a big judgment, a semiconductor chip manufacturing company was awarded $845 million after its trade secrets and proprietary information were stolen by former employees. Two employees of ASML, a Dutch semiconductor company, stole confidential data and sold it to XTAL, a rival company. The court ordered XTAL to pay a substantial fine, which is unlikely to be paid since XTAL is bankrupt. However, ASML will now own a large chunk of XTAL’s intellectual property. Also, XTAL is barred from doing business in that particular field for at least three years. Twitter: @DigitalGuardian

33. Huawei announces bonuses for employees who steal IP from other companies.

While some companies steal the IP of other companies secretively, others are pretty bold in their approach. For example, Huawei announced that it offers bonuses for employees who steal confidential corporate data from other companies and allegedly stole trade secrets from T-Mobile. It began with Huawei stealing secret information about a phone testing robot from T-Mobile called Tappy and using the data to build their own robot. According to the FBI, Huawei has been using unethical business tactics to attain an unfair advantage and to harm U.S.-based businesses. Twitter: @TheJusticeDept

34. Employees conspire to steal biopharmaceutical trade secrets.

Four employees (including a principal scientist) of Genentech, a biotechnology company, stole confidential corporate information and handed it to JHL, a Taiwan-based biosimilar drug manufacturing company. The malicious employees stole the company secrets related to biopharmaceuticals Avastin, Herceptin, Rituxan, and Pulmozyme. As a result, they were charged with conspiracy, trade secret theft, and computer abuse. Twitter: @TheJusticeDept

35. Bank employees leave en masse to a rival bank and take trade secrets with them.

Malicious companies often offer employment or other incentives to lure employees from their rival firms. In a 2010 case, several employees of a bank left en masse to join a rival bank in Singapore. But before leaving, they all emailed the bank’s confidential data to their personal email accounts. These employees were charged for unauthorized access of confidential data. Twitter: @ipSEAsia

36. Former employee registers a copyright for a jointly developed formula.

Claiming copyright over something that was developed in joint research isn’t the most ethical thing to do. A European structural engineering company collaborated with one of its former employees and developed a land use calculation formula for the mining industry. The European company used it, and later the former employee registered a copyright on the formula. The company applied for the cancellation of the formula and won the case. The copyright ownership was given to the company. Twitter: @ipSEAsia

37. Plant manager files for a patent before the company could commercialize the process.

It’s important to specify the ownership of intellectual property in employment contracts. The plant manager at an Indonesian food processing company came up with an innovative idea to boost the existing cleaning process. The company owner offered a reward sharing scheme to the plant manager. But before that, the manager secretly filed a patent in his own name. When the company discovered the filing, the employee was asked to surrender the patent, but he refused. The matter moved to court, and the company won the rights to the patent. However, the original patent was poorly drafted, and the plant manager got an improved version and filed for an international patent. Twitter: @ipSEAsia

38. Motorola settles dispute with ICS.

When an employee leaves a company and joins a rival, there is always a chance of them carrying some trade secrets with them. This happened with Motorola when several of the company’s engineering managers left to join ICS. Motorola filed a case against ICS that the latter has hired its employees to gain access to the former’s trade secrets. The companies settled their differences when ICS agreed to the conditions laid out by Motorola, and the lawsuit was dismissed. Twitter: @MyCustomer

39. Walmart sues Amazon for stealing trade secrets.

Walmart is famous for its intelligent marketing and distribution strategies. It’s no big surprise that other companies wanted to learn its trade secrets, and these other companies could include Amazon. In 1998, Walmart filed a lawsuit against Amazon for hiring Walmart employees and stealing intellectual property through them. According to Walmart, Amazon hired a particular combination of employees for their inside knowledge of Walmart’s warehousing and distribution techniques. Twitter: @CBSNews

40. Qualcomm secrets leaked by Apple.

Apple defends its source code aggressively, but it has been accused of stealing IP from other companies. In 2017, Qualcomm filed a complaint against Apple for misappropriating the former’s trade secrets. Apple used to purchase chipsets from Qualcomm. Later, Apple changed its supplier of chips from Qualcomm to Intel. It shared the details of these chipsets with Intel to get improved chips, thereby breaching a software licensing contract. Twitter: @brooklynlaw

41. Architect sues Google for misappropriating trade secrets.

Corporate entities can sometimes take actions some might deem unethical to earn more profits. In a 2014 case, Eli Attia, an architect, developed a technology called Engineered Architecture that helped in the creation of sustainable buildings at a low cost. He was approached by Google, and both parties signed a non-disclosure agreement to start a project called Genie. Attialater lodged a complaint against Google for trying to kill the Genie Project and instead start a spin-off version called Flux Factory without Attia. Twitter: @brooklynlaw

42. Employee steals computer code for trading platform.

Online trading platforms facilitate trades worth millions of dollars everyday, which is why their cybersecurity must be robust. However, while you can develop code that’s secure from outside hackers, insiders can be the real threat. In a 2017 case, Dmitry Sazonov allegedly stole computer code for a trading platform from his employer, Susquehanna International Group. Susquehanna developed the code for a trading platform, and Sazonov stole that code by keeping it in his email drafts. Sazonov is charged with trade secret theft. Twitter: @brooklynlaw

43. Rail management company sues employees over IP theft.

While insider IP theft is pretty common, proving its occurrence isn’t always easy. As a result, some cases are simply dismissed for lack of evidence. Richard Sultanov and Paul Ostling worked for Brunswick Rail Management (BRM), a Russian LLC. BRM alleged that Sultanov and Ostling misappropriated the company's trade secrets. While working in BRM, Sultanov allegedly sent several confidential documents to his personal email address and then later deleted his sent messages. During this time, he also received payment of $13,000 from Ostling. However, due to a lack of evidence in the case, it was closed. Twitter: @brooklynlaw

44. Investor files patents on stolen trade secrets.

Blindly trusting someone can be bad, and Palantir learned that the hard way. Palantir is a data analytics company based in California. Marc Abramowitz, one of their initial investors, used to discuss sensitive business details with company executives. He later used that confidential information and filed for patents on the information he received. The complaint filed by the company includes claims related to IP theft and breach of contract. Twitter: @brooklynlaw

45. VP of medical company steals intellectual property and shifts to a rival.

A vice president of a medical technology company allegedly stole intellectual property and joined a rival firm. Bryan Szweda was working as the VP of St. Jude Medical and was accused of stealing 4,000 files related to his project on artificial heart valves. The documents included research and marketing details of St. Jude Medical. Szweda moved out of the state before investigators carried out a search of his home. Twitter: @brooklynlaw

46. Ecosphere sues Halliburton over stolen trade secrets.

In yet another case of misappropriation of intellectual property, Ecosphere Technologies alleged that Halliburton Energy Services disclosed the former’s trade secrets related to its proprietary technical and strategic information that it shared with the latter under a contract. Ecosphere develops chemical-free water treatment solutions for industries. Halliburton tried to buy Ecosphere, but the deal didn’t go through. However, Halliburton continued using Ecosphere’s intellectual property. Twitter: @brooklynlaw

47. Employee steals unreleased game designs before joining a competitor.

Online games are all the rage, and gaming lovers often line up for popular games as soon as they are released. This is what makes unreleased game documents so valuable. In a 2012 case, Alan Patmore, an employee at Zynga, stole confidential game data and joined its rival, Kixeye. Patmore transferred over 700 confidential Zynga documents to his personal Dropbox account. He later uninstalled Dropbox from his work computer, but his actions were caught in a forensics investigation. Twitter: @brooklynlaw

48. Employee confesses to accepting a bribe from rivals.

As we have seen time and again, non-disclosure agreements aren’t a secure measure against IP theft. In a 2012 case, Nelson Calderson, a National Oilwell Varco (NOV) employee, stole the company’s trade secrets and sold them to Ceram-Kote, a competitor. NOV learned about the IP theft when Ceram-Kote developed a knock-off of a sophisticated industrial piece developed by NOV. The trade secrets were passed from NOV to Ceram-Kote by Calderson, who confessed to taking a bribe from Ceram-Kote. Twitter: @brooklynlaw

IP theft is among a company's most valuable assets, but securing IP is not as simple as locking the door to the office building or keeping proprietary data locked safely away in a safe that only one or two people have access to. Because so much information is stored digitally today, securing IP requires a robust set of cybersecurity processes and systems.