Chinese chipmaker acquitted of economic espionage

A Chinese semiconductor manufacturer that drew the ire of the Trump administration was acquitted of charges that it stole trade secrets from Boise, Idaho-based Micron Technology.

State-owned Fujian Jinhua Integrated Circuit Co Ltd was indicted in 2018 along with Taiwan's United Microelectronics Corporation. The indictment was part of the U.S. Justice Department's "China Initiative" to combat corporate espionage that has since been disbanded.

Following a bench trial, Senior U.S. District Judge Maxine M. Chesney of the Northern District of California acquitted Fujian Jinhua in an oral ruling on Wednesday of conspiracy to commit economic espionage and theft of trade secrets and one substantive count of economic espionage. A one-page order on Pacer does not include substantive discussion of the reasons for the acquittal. U.S. v. Fujian Jinhua Integrated Circuit Co. Ltd., 3:18-cr-00465-MMC-2 (N.D. Cal., filed Sept. 27, 2018)

Fujian Jinhua could have been fined and ordered to forfeit chips and income derived from stolen technology, the Justice Department said in 2018.

Reitmeier

A team from Skadden, Arps, Slate, Meagher & Flom LLP led by Jack P. DiCanio, Emily A. Reitmeier and Matthew E. Sloan defended Fujian Jinhua. They were unavailable to discuss the ruling.

A spokesperson for the U.S. Attorney's Office also could not be reached.

According to the complaint, Fujian Jinhua and United Microelectronics, and some of their employees including Fujian Jinhua's president, engaged in economic espionage to steal proprietary technology from Micron.

In 2020, United Microelectronics pleaded guilty to trade secret theft and paid a $60 million fine and agreed to cooperate with the Justice Department's investigation. USA v. United Microelectronics Corporation et al., 3:18-cr-00465-MMC, (N.D. Cal., filed Sept. 27, 2018)

A lawsuit filed by Micron in 2017 was also settled. Micron Technology, Inc. v. United Microelectronics Corporation et al., 3:17-cv-06932-MMC (N.D. Cal., filed Dec. 05, 2017)

"Micron previously reached a global settlement agreement with Fujian Jinhua Integrated Circuit Company, and the companies have dismissed all litigation between them. We have no further comment," a Micron spokesperson said Thursday.

Sloan

Randy Kay of Jones Day in San Diego represented Micron in the civil litigation.

The acquittal brings a quiet end to a dispute that drew widespread attention in Washington and Beijing.

President Trump pointed to Fujian Jinhua in a 2019 speech to the United Nations General Assembly in which he laid out a tougher U.S. policy toward China and trade with Chinese companies. The U.S. government placed Fujian Jinhua on a list of entities that cannot buy components, software, or technology goods from U.S. firms. China retaliated by prohibiting Micron's chips from being used in any of its "critical infrastructure."

In his speech at the U.N., Trump said "To advance the Chinese government's five-year economic plan, a company owned by the Chinese state allegedly stole Micron's designs, valued at up to $8.7 billion. Soon, the Chinese company obtains patents for nearly an identical product, and Micron was banned from selling its own goods in China. But we are seeking justice."

But the Justice Department's "China Initiative" also drew rebuke in the U.S. for sweeping up people and companies that had committed no wrongdoing. The initiative was disbanded in 2022.