Chinese Men Indicted in Theft of Code from U.S. Tech Companies | Hacker News Reader

Chinese Men Indicted in Theft of Code from U.S. Tech Companies

nytimes.com

95 pointsvinhboy73 comments

I see the Times playing up the nationalistic components but the truth is that people go to companies, learn stuff, and start new companies doing the same thing only better all the time. It is perhaps even more rampant in California with its employee protection laws but it isn't unusual anywhere in the US.

The question I have is that if several students of a prominent professor at Harvard go to work at Intel and AMD as electrical engineers, and then later get together to form their own company, still in the US, to make a really energy efficient x86 equivalent processor, is that economic espionage or innovation? Generally we've held it to be the latter.

And then there is the number of students getting advanced degrees in the US from really bright professors, but are unable to get a Visa to actually work in the US?

It is hard for me to be outraged here.

Thanks for very eloquently expressing my reaction to the article!

It does sound like witch hunting with a McCarthyist nationalistic vibe. Overall the brain drain from China to the US has been working to the benefit of the US, for years.

I expect we will more and more such propaganda pieces in the NYT and elsewhere, as China is being increasingly positioned as "the Adversary".

Yes. Chinese Americans earn on average 30% more than other U.S. adults. http://www.pewresearch.org/daily-number/asian-americans-lead...

While regrettable, the loss of some technology does not compensate for all of the advantages to the States of highly skilled immigrants from China. The top ranked comments on NYTimes are ignorant and do not describe the full picture.

Parents of Chinese Americans would have had to have been well-off almost by definition to afford sending their children to the U.S. It is true a lot of that wealth would have been spent or deflated due to living standard differences by the time they arrived, however the education they've previously attained as well as the mindset of trying to achieve a better future stays with them. The Chinese who bum around unemployed rorting government benefits and/or family generosity would not have come to the U.S. looking for a better future.

There is an inversion in politics, where the left are more anti-Asian than the right. Letting people express anti-Asian sentiment (even though equivalent sentiment against other groups would be verboten) is both a convenient escape valve for the populace (see the LA riots) and also makes the left seem less extreme.

See also the #cancelcolbert controversy[0]. Imagine if this had been any "oppressed" group instead.

[0] http://www.newyorker.com/news/news-desk/the-campaign-to-canc...

In the case of porcelain technology, the process you describe went in reverse: http://en.wikipedia.org/wiki/François_Xavier_d%27Entrecolles

Your comment lacks the context of China's economic policy. As bizarre as it sounds, Top Gear actually hit on it during one of their specials:

http://youtu.be/K0bNf-jcVU0

I know it's easy to discard what you're reading as nationalism, but the Chinese have a long history of theft of intellectual property and protecting it at the state level. It isn't about national pride at all, for me; our industry is one that is directly targeted. A new iPhone is copied in weeks, and that's not only a direct shot at American exports, it's a direct shot at my work. Why should I put the work into innovating when cheap copies will flood the market?

There's a slight difference between incremental improvement and the economic espionage described in the article, though I grant you the line is fine. You're potentially starting to see more desperate maneuvers (this isn't the first, and I agree with you that it's a potential stretch) because it's really hard to prosecute most of these and it's been an issue for a long time.

There is a difference between PRC specifically sending agents to the US to steal specific technologies, and a random group of Chinese nationals deciding to take US tech back home and profit off of it.

You're implying that you can discern the difference.

No, the reverse; the implication is that, since you can't tell the difference, you should be charitable and assume it's just some random people with a coincidental feature of X, rather than an X-ist conspiriacy. A lack of this kind of charity is what creates ideas like "the jews control the banks" or "the gay agenda."

Indeed, and furthermore, because of the sheer size of the population of China, it shouldn't surprise us to see stories about this that involve Chinese nationals. It's not surprising there are lots of great people but also less-great ones as well; it's a big country!

To actually suggest that there is some "organized Chinese conspiracy" thing happening, someone would need to show that this happens more often than statistically expected.

Just like the US did before it emerged as the #1 industrial producer in the world.

Up until 1865, the United States made extensive use of slave labor to grow its economy. It also made use of foreign innovations, stealing others' intellectual property.

Both were immoral, and neither should be accepted today.

To belabor the point generally speaking all western and Latin powers of the era employed slave labor and stole from each other.

Today lots of emerging countries still rely on what is in practice servitude labor. They don't outright own the people, but they practically do since they have little chance of escaping their situation. Migrants in se Asia. Rural folks working in Eastern china, etc., where employers withhold passports, international and national "passports".

This happens in the US, too, right now.

Just about everything exists everywhere, what matters is extent and degree and what authorities do once they find out.

It's commonplace. The H1-B visa is virtually designed for indentured servitude.

Most of the world agrees that slavery is ethically unjustifiable. Not everyone agrees to the same notions of intellectual property as the U.S. does, even among the developed world.

Also, even those who like IP laws in the U.S. would agree that comparing poor IP laws to allowing slavery is beyond absurd.

This story is, essentially: five people violated the law of their host country in a way that if they had been citizens would have led to a civil lawsuit. As a result, they are being charged and reported as state-sponsored spies.

Equating slavery with violating IP laws is a fallacy of extrapolation. One does not compare appropriately to the other. Especially considering IP laws have their roots in Monarchally bestowed monopolies and arguably do not do what they purport to do, which is encourage innovation.

We copied half of British government, too. I never implied otherwise (in fact I specifically said it isn't national for me). Our thinking on intellectual property has evolved since the time before the invention of electrical power and it is possible to learn from failures. Are you suggesting once someone makes a mistake everyone else is entitled to do so as long as said person was enormously successful in part due to said mistake? Everybody here has been party to the explosion of technology and knowledge in mere years and yet we defend poor judgment by saying "well, the United States did it 200 years ago, so clearly we don't know all we should know about the morality?"

The industrialization of the United States succeeded quickly for far more reasons than intellectual property.

The industrialization of the US happened similar to many other industrializing nations before and since and it has a lot to do with IP theft, not just a little. It is a recurring story throughout history: create, succeed and get bypassed. It's not a mistake. It's how the game of empires is played. It's part of how 3rd world countries become 1st world countries. China is no exception.

The US is always demanding 3rd world countries to stay 3rd world because it suits us. If necessary the US will bomb you if you don't play by "the rules". How moral is that?

Does the context apply? Lets say you saw a really cool operating system from Bell Labs called UNIX but they were all pissy about trademarks and licensing fees so you made your own that, to the user is similar enough that you don't have to learn a bunch of new syntax or command options, but to avoid AT&T's lawyers from being confused that maybe you ripped off their code you call yours Linux.

Cheerios from P&G, Honey-Os from Trader Joes? Dr Pepper from the Dr Pepper/Snapple folks or Dr Skipper from the kind folks at Safeway?

And really who is the "good guy" and who is the "bad guy" here? In all of the product "rip offs" in the US and in China they are significantly cheaper than the 'branded' version. So consumers have a choice, the widget made to the 'brand's level of quality or one made as cheap as possible. And a lot of consumers go for the cheap ones. That is why I see a bunch of Comkia Ipad chargers rather than Apple ones.

The fact that a lot of this originates in China has, in my opinion, more to do with the fact that things are manufactured there, rather than the fact that they are Chinese. Even before the great American manufacturing diaspora there were US manufacturers making "cheap knock offs" of various kinds of things. Here in the land of Right and Legitimacy. Basically, there are a lot of American consumers that go for 'cheap'. And there appears to be a lot of Chinese consumers who want the "look" of an expensive brand but they don't want to pay a premium for it. So they get it from the shop owned by an uncle or something.

Now I am the first guy to cry "Foul!" when someone steals the plans to a system that took a long time to develop and then sets up manufacturing without having to pay any development costs. But if factory B goes out and buys a widget that Factory A made, takes it apart and figures they can make it cheaper and they will be sure that people know it isn't a Factory A widget its a Factory B widget? That is just regular competition.

There's a difference between cheap generic knock-off and a clone designed to rip-off the buyer by lying about specifications. Generic brands acknowledge what they are and the customer generally knows and can at least expect it to do or be what it says on the tin. What I find most distasteful is that manufacturers there, seemingly especially in electronics and chemical products, don't even bother with that or any semblance or that - "If I get one over on you and don't get caught, good on me / I got caught, you mad bro? what are you going to do, lol." attitude. It's the difference between doing the best you can to provide something like a more expensive product and actively seeking to defraud your customer and not caring. the fact that it's seemingly so pervasive doesn't help matters or reputations of legitimate players.

Agreed.

More conspiratorially, one comment on the article pointed out how easily this distracts from things like zero indictments of bankers for 2008, any administration officials for Iraq, NSA domestic spying and monitoring, holding Manning in solitary while Petraeus gets a slap on the wrist and a pension, and so on, and so on.

It's hard to take it as very conspiratorial, though, because all of the things listed are absolute atrocities.

+1. It's hard for the U.S. to take the moral high ground on espionage outrage until China's equivalent of the NSA has their fingers in as many pies. But it's conveniently easy for journalists to forget that.

I think your point is interesting but the article refers to company secrets mostly.

From the article - "Other emails cited in the indictment run through 2013, and the government contends they included a “stolen Avago design kit” for the chips."

You can obviously start a new company in the same field, just make sure you don't violate non-complete clause (if it exists). However, stealing code or product design is a strict NO whether you are in Silicon Valley or a University.

I was wondering about that. Generally you don't need to steal a design kit[1], the manufacturer gives them away at seminars and training in order to help you understand how their parts are used.

If I were going to start building a chip to compete with these guys I'd definitely want an evaluation board to test to see if my chip was a work alike to the competitor's chip.

[1] http://www.avagotech.com/pages/en/rf_microwave/demo_boards/

Your government feeds your kids when your career get "disrupted" by another American company, maybe they took your jerbs but they pay taxes that goes into a pot that helps other Americans. The company goes overseas, and that's jobs and money happening in a system (say, China's) that doesn't owe you a thing if you're made destitute because of it.

I think China needs to stop these activities if she wants to be respected internationally. In January this year, two Chinese professors in Norway got kicked out from a Norwegian university because Norway was also concerned with spying activities from China. [1] I think China economy has come to a point that it needs innovation to move forward. Obviously, stealing intellectual properties from other countries is not the best way to go here.

1. http://www.nrk.no/sorlandet/forskere-ved-uia-utvist-av-norge...

Was this sponsored by the chinese government though?

>> They took the technology back to Tianjin University, created a joint venture company with the university to produce the chips, and soon were selling them to both the Chinese military and to commercial customers.

They sold chips to the government, but for all we know the gov is just another customer.

PST(Norwegian M15) seems to believe so! But, as in any other case like this, they rarely comment.

If the Chinese government knew it could get the same vital technologies at greatly reduced costs while growing its own economy, don't you think they would sponsor this sort of activity?

That's not to say they did.

Certainly, but it is plausible.

What makes replacing "China" with "The United States" in that statement any less plausible?

Nothing at all, and I never claimed such.

>> don't you think they would sponsor this sort of activity

whether or not they would doesn't mean they did

Plausible or not, implying that it's true because there's an incentive only promotes a biased opinion.

I wonder if the Chinese government will give any assistance in bringing these people to justice.

If you built your success on theft when and how do you migrate to a non-theft approach? How do you overcome cultural inertia? How do you deal with falling behind in the years (decades?) it'll take to build the universities, industry, salaries, regulations, free market concessions, fair labor rights, etc to support real domestic innovation and a workforce incentivized to not steal?

Theft is the only way they can remain competitive and I don't believe they have or want an exit plan. The Chinese don't care about legitimacy. No autocratic one-party state does.

China's approach has been to steal, but also send out massive numbers of students and bring them back. They've invested heavily in educational infrastructure.

But don't assume that that means moving towards a society that believes in things like fair labor rights. The Communist party isn't much on giving up power.

What do they bring back? A mentality of theft and copying. Unless they can pivot their values to ownership, creativity, rewarding chance taking, free speech, etc then it won't work for them.

This is like all those failed attempts to make a silicon valley in other countries. They overlook the values argument because its politically difficult for them to address it. Autocracies have historically been failures in this regard. Even the entire USSR in its heyday couldn't compete with Intel in the 70s and had to steal technology. Looks like the Chinese are doing the same today with these filter chips.

What they bring back is knowledge and expertise. China is pursuing a strategy with two forks. Theft to catch up, and education to secure a future.

It's unwise to treat so large a country as only capable of doing one thing at a time. Similarly, it's unwise to assume that only western values can produce useful innovative outcomes. Cuba is nobody's idea of a free society, but they've done a huge amount of groundbreaking medical research and development.

No autocratic one-party state does.

What makes you think that a two party system is drastically better?

The illusion of choice is way more dangerous and treacherous than blunt and in your face authoritarianism and despotism.

Its not the number of parties, its the freedom and autonomy to challenge the incumbent party.

A two party state is as free as a 10 party state. Euro-style multi-party governments fall into 2 major parties with smaller, often extremist (racists, etc), smaller parties anyway. Because the two parties need to court these smaller parties for votes, minority views like racism, get majority exposure and unequivocal representation.

A one-party state isn't free at all. Its just old fashioned autocracy. A shade less than a total dictator.

> Its not the number of parties, its the freedom and autonomy to challenge the incumbent party.

Without effective choice, which arguably is substantially lacking when the structural features that preserve duopoly is in place, there may be theoretical freedom to challenge the incumbent party, but there isn't necessarily real practical choice. This is evident when there are numerous policies that remain in place despite large majorities opposed (or which are not adopted despite large majorities in favor), which are frequently seen in the US system.

Duopoly results from structural features which obstruct effective democratic accountability, and which therefore produce a government which is not effectively accountable to the nominal electorate.

> A two party state is as free as a 10 party state.

No, its not, which is why "democracies" which few effective competitive parties also have measurably poorer satisfaction with their governments than those with more effective competitive parties: a state with only two viable parties is, while likely freer than one-party state, one with a government less accountable to the people -- and therefore one which is less ruled by and more ruling over the people -- than is the case in one which supports a multiplicity of competitive parties.

Your comment ignores the existance of primaries and other democratic institutions that encourage political change. The US's constant shifting political winds is evidence that it does work and works well considering we are the sole superpower and saved "enlightened" nations like the various countries in Europe from killing themselves 70 years ago and keep aggressive autocratic powers like Russia and China from completely taking over their neighbors or starting WWIII.

> Your comment ignores the existance of primaries and other democratic institutions that encourage political change.

No, it reflects the actual results of empirical study of democracies, notably that by Arend Lijphardt in Patterns of Democracy.

> The US's constant shifting political winds is evidence that it does work and works well

The poor satisfaction with government in the US and other limited-practical-choice democracies compared to democracies with more effective choice through the electoral system is evidence that it does not work in the judgement of the people actually subject to it as well as other democratic systems do.

Primaries are generally far more meaningful in a two party system than a one party system. So people often get meaningful choice in a two party system.

Also of note, in some multi party systems like Britton a minority party’s can end up with vastly outstated control. EX: The largest party got < 37% of the vote but they are a clear majority right now. One party got 3.8% of the vote and got 1 seat another got 4.7% of the vote and 56 seats. http://www.economist.com/blogs/graphicdetail/2015/05/britain...

PS: You really can't design a voting system without clear downsides, but zero voting is clearly worse.

It seems this is pretty clear case of attributable theft -- it's good that it is being prosecuted.

The challenges are with attribution though, in many electronic-only attacks, it "could be" anyone.

Companies like CrowdStrike have done some work to attribute PLA & China in some attacks:

http://blog.crowdstrike.com/hat-tribution-pla-unit-61486/ http://cdn0.vox-cdn.com/assets/4589853/crowdstrike-intellige...

But largely APT attacks are happening without repercussion, probably by many countries, including the US, and as a "defender" against many of these, it is terrible. The worst part is, I don't see it changing: Nothing right now is driving State-Actors to stop doing whatever they want against corporations.

This is just a group of people deciding to steal intellectual property. Here is the more organized attack, originating in China, in which intellectual property of multiple companies (including Google) was stolen https://en.wikipedia.org/wiki/Operation_Aurora

Probably, but then these people should face punitive action, further infringement prohibited, and restitution made to the owners of the intellectual property then? If that's all this is...

I'm surprised nobody has pointed out yet that the headline is mistaken - no code was stolen in this incident. It was hardware designs that were stolen, as the first line of the article states:

>> "The Obama administration on Tuesday announced the arrest of a Chinese professor and the indictment of five other Chinese citizens in what it contended was a decade-long scheme to steal microelectronics designs from Silicon Valley companies."

How do you know? Software is intimately involved in all parts of chip design - what are hardware description languages like Verilog or VHDL, and the chips written in them, but code? If they didn't steal code what did they steal?

I pity the fool who steals the software written anywhere I've worked. It's hard enough to maintain for those of us who wrote it or rebuilt it.

The only thing this would be good for is breaking into systems!

EDIT: Also, one of the suspicions is that the next big revelation with the NSA surveillance fiasco is mass spying on foreign businesses for the benefit of our business. Who would look silly then?

that revelation is decades late: http://en.wikipedia.org/wiki/ECHELON

>According to the indictment, two of the professors began to apply for patents on some of the technology in the United States, beginning in 2010.

pretty strange form of theft.

>The chip is popularly known as a filter, which is used for acoustics in mobile telephones;

clueless NYT. Article is about microwave circuits, parts of PA.

> while the parts are small, the market for them worldwide is worth well more than $1 billion a year. According to the charges, the men took the firms’ technology back to Tianjin University, created a joint venture company with the university to produce the chips and soon were selling them both to the Chinese military and to commercial customers.

question is did they copy designs verbatim? or simply designed their own?

If you want to know more about microwave design/R&D this episode of theamphour featuring Shahriar Shahramian(old bell labs/alcatel-lucent) is excellent http://www.theamphour.com/228-an-interview-with-shahriar-fro...

I also don't think that China can keep up with the advanced industrial espionage conducted by the US.

http://www.bbc.com/news/25907502

https://news.vice.com/article/germany-accused-of-spying-on-f...

http://www.theguardian.com/world/2013/sep/09/nsa-spying-braz...

"According to the indictment, two of the professors began to apply for patents on some of the technology in the United States, beginning in 2010."

It would seem difficult to steal and simultaneously patent an idea in the US. Am I misunderstanding the title or the article?

Is the crime that they invented a patentable concept and then they tried to then take it back to another country that happens to have some tension with the US?

China will never be ever to compete with the US in its current configuration. All it can do is copy and follow, as it's governmental central authority mandates. That continent will never be a significant threat...it will always be several steps behind...mimicking what has already worked.

30 years ago they used to say exactly same about Japanese.

Maybe to some, but in my eyes they had an amazing amount of contribution to basic science and technology in EE - especially during the 80s.

Yes. Also, people tend to forget that out world is actually a pretty old place. The history of the economic scene of the last 2000 years teaches us that there is plenty of space for changes.

http://commons.wikimedia.org/wiki/File:1_AD_to_2003_AD_Histo...

I wonder if the Chinese will begin arresting American citizens who visit for conferences.

Like these cases?

"An American geologist who was imprisoned for more than seven years on a vague charge of “illegally procuring state secrets” has been deported by China and arrived home in Houston on Friday..."

http://www.nytimes.com/2015/04/04/world/asia/china-deports-a...

"An American automotive engineer has been detained by the Chinese police for more than a year on charges of violating trade secrets, according to United States officials..."

http://www.nytimes.com/2009/12/18/world/asia/18detain.html

A lot of the comments here are more apt to the China of 10 years ago. Things have changed folks. China is now making huge investments in innovation science and engineering. Not yet on par with US in terms of quantity, and certainly not quality. But great progress is being made. We should take IP theft very seriously, but we should likewise recognize those Chinese researchers who are working diligently to improve things.

huge investments in innovation science and engineering It takes YEARS for any meaningful return, no matter how huge the investments may be. Just my 2 cents.

There's no denying rampant theft of IP by Chinese companies, even between the Chinese companies.

Sure, China has less strict IP laws and less strict enforcement, as well as possibly a government policy of looking the other way when they can acquire tech from abroad. But there is a huge difference between that and labeling those activities as state sponsored economic espionage in all cases.

Morris Cohen giving the U.S.S.R the plans for the atomic bomb? Espionage.

Two professors doing a startup in China with tech that was probably under NDA/copyright/patents of their former employer? Not espionage.

Really, if this was all happening internally inside the U.S. it would probably be a civil lawsuit at most... and only news in Techcrunch, not NYT.

That sounds a lot like minimizing the issue here. I can't recall a single case where U.S. citizens stole Chinese high technology, brought it back to the U.S., started a company, and then sold it the U.S. government. That is what this is about - cut and dried.

@ lazaroclapp I never mentioned state sanctioned theft of IP. You brought it up first.

Didn't mean to imply you did. That comment was about how it's being reported in the media in general, should have made it more clear.

Edit: I think I was more reinforcing your point than challenging it, basically "the main issue is different standards of IP protection laws; without (an unusual level of) malice involved.", but it's being reported as a movie plot heist...

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