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China Patents The Courts Apple

18 Months In Prison For Making iPad 2 Cases 285

decora writes "Loretta Chao of the The Wall Street Journal reports on three people in China who were sentenced to between 12 and 18 months in prison for a plot to make iPad 2 protective cases before the tablet's official release. The plan allegedly involved R&D man Lin Kecheng of Hon Hai Precision Industry Company (FoxConn) selling image data to Hou Pengna, who then passed it to Xiao Chengsong, a manager at MacTop. The charges? One 'violated the privacy policy of the company,' two got information through 'illegal means' causing 'huge losses,' and they all 'infringed trade secrets.' The decision was handed down by the Shenzen Baoan People's Court on June 16."
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18 Months In Prison For Making iPad 2 Cases

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  • Bribe Fine (Score:5, Insightful)

    by rtb61 ( 674572 ) on Tuesday June 21, 2011 @02:52AM (#36509676) Homepage
    !8 months prison for failure to pay the appropriate bribe.
    • by Lisias ( 447563 )

        É você?(It's you?)

    • by vivian ( 156520 )

      That's what happens when you cross business interests in a fascist state.

    • Re: (Score:2, Insightful)

      by Hognoxious ( 631665 )

      I wonder if the prison has a "glorious people's correctional work for the purpose of moral education"[1] program? He might end up making the real thing.

      [1] Not slave labour at all. No no no. Entirely different thing.

    • That is absolutely the case. The "wheels of justice" in China only turn that quickly if you've run afoul of a well connected (government cadre) earner. Given the size of Foxconn and the amount of money involved, it's got to be someone (or a number of people) VERY high up in the CCP food chain....hence the harsh and fast sentence.

      Anyone making this out as some attempt at enforcing IP laws is kidding themselves.

      • The "wheels of justice" in China only turn that quickly if you've run afoul of a well connected (government cadre) earner.

        Here in the US, the only turn that quickly if your skin happens to be an unfortunate shade.

        Right here in Illinois in fact, if you happen to be that unfortunate shade and are caught with non-Pharma-approved drugs, you are 500 percent more likely to do jail time then your more pale counterpart.

        • Even in the states, there's a fairly sharp change in a person's treatment if they piss off someone rich and (somewhat) powerful [].

        • Here in the US, the only turn that quickly if your skin happens to be an unfortunate shade.

          Noones going to say "coorelation, not causation"? Or point out that more people with skin of "an unfortunate shade" get free money and handouts from the government than their "pale counterpart"? Or that a good number of the most powerful men in the government, in all branches, have skin of an "unfortunate shade" (given their percentage of population vs representation)? Or that inner city cops actually tend to BE that "unfortunate shade"?

          Yea, the man is totally getting african americans down. Oh wait, th

    • The guy committed an actual crime. In fact, I'm sure he'd be punished in the states had he done a similar thing here. Or were you saying that he could have gotten away if he'd paid a fine?

      • by Nidi62 ( 1525137 )

        Or were you saying that he could have gotten away if he'd paid a fine?

        No, he's saying that, had these guys paid the appropriate bribes to the appropriate people, they would have been fine. Remember, a lot of what China produces for domestic consumption has been acquired through "illegal means".

    • 18 months in prison for corporate espionage. In the US, the penalty [] can run up to $500,000 and 15 years imprisonment for individuals, $10,000,000 for corporations. Why do you think this has something to do with China being bad? Or with commerce being corrupt? The idea behind these penalties was, believe it or not, to reduce corrupt business deals.

  • Good (Score:2, Insightful)

    by msobkow ( 48369 )

    It's good to see China taking IP seriously for a change.

    • Not quite. (Score:5, Insightful)

      by Narcogen ( 666692 ) <narcogen&rampancy,net> on Tuesday June 21, 2011 @03:20AM (#36509790) Homepage

      This is not China taking IP seriously as a matter of principle.

      This is China taking the needs of Foxconn seriously, and in this case, Foxconn's need is to demonstrate to its clients that it can be trusted with their sensitive commercial materials, such as the specifications of as-yet-unreleased products.

      • Re:Not quite. (Score:5, Interesting)

        by martyros ( 588782 ) on Tuesday June 21, 2011 @06:07AM (#36510364)

        This is China taking the needs of Foxconn seriously

        From the summary, I don't see anything particularly wrong with this decision. One company gained an unfair advantage over its competition by engaging in illegal industrial espionage. If the problem is selective prosecution, then surely the solution is to complain about others who are not prosecuted for espionage, rather than to complain about those who are prosecuted?

  • How is this bad for Apple? Isn't having cases available a good thing?

    • I can see the headlines now:

      "We only leaked the OS Source Code so that people could make better apps" while trying to justify how there's precedent existing for the making of cases.

      Apple did not comment, so we don't know who brought the charges, it would seem that Foxconn found out that employees were leaking confidential information, for which they surely signed non-disclosure agreements, for the purpose of lining a friends pockets with money, by being the first company on the market with covers available.
    • by Zorque ( 894011 )

      They don't get to charge exorbitant license fees on unlicensed products, of course. Such a tragedy!

    • Yes, it's probably a good thing, but were they the only people who got access to the trade secrets? Once they'd got the dimensions, did they also let Samsung know, for example? If so, then that would have been very useful information to the team designing their next tablet: they would know the dimensions that they had to beat and, since they knew roughly what the specs were already from what chips they were selling Apple, they'd know exactly what hardware their chief competitor was about to ship.
  • Industrial espionage (Score:5, Interesting)

    by Alioth ( 221270 ) <no@spam> on Tuesday June 21, 2011 @03:35AM (#36509840) Journal

    When I lived in the United States, one of our contractors was arrested and sent to prison for industrial espionage (I think the charges were probably mail fraud and the like). He was trying to sell our source code to a competitor, the competitor called the feds, and the feds set up a sting operation while the competitor "played along" as if it were going to pay him for our source code.

    They arrested two of our people (both contractors), one was quickly let off though because it turned out he had been duped by his "friend" into lending him a mailbox for a supposedly innocent purpose (the mailbox was to be where the payment would be delivered). I don't remember what was handed down to the guilty person in the end other than it involved some jail time.

  • by YesIAmAScript ( 886271 ) on Tuesday June 21, 2011 @04:00AM (#36509910)

    These guys engaged in industrial espionage, pure and simple.

    Why make it out like they are victims?

    They didn't get time in prison for making iPad 2 cases, but instead for stealing the secrets necessary to make them before the iPad 2 even came out.

    • Re: (Score:2, Insightful)

      by syousef ( 465911 )

      These guys engaged in industrial espionage, pure and simple.

      Yes, and they should have been punished but years in prison? You realize these weren't military components for a nuclear missile right?

      • by SunTzuWarmaster ( 930093 ) on Tuesday June 21, 2011 @06:15AM (#36510394) Homepage
        Would you suggest a fine? If the punishment is fining, it simply becomes part of the cost of doing business (each business dos a cost vs. benefit for breaking the law, based on financial incentives and disincentives). In America, this comes with a 24-month sentence, and Australia is up to 15 years, so it isn't entirely out of line with what other parts of the world do.
      • Yeah, I mean we only give sentences that short to corporate executives...wait a second.

    • by gr8_phk ( 621180 )

      These guys engaged in industrial espionage, pure and simple.

      One 'violated the privacy policy of the company,' two got information through 'illegal means' causing 'huge losses,' and they all 'infringed trade secrets.'

      Violating company "privacy policy" is not industrial espionage, nor should it be a criminal matter. Getting the information through illegal means is. Causing "huge loesse" through competition... Hmm did they actually sell any? before the product launched (i.e. the could have designed it anyw

  • From my submission last week []:

    "Almost two months ago three individuals were charged with selling the designs of Apple's latest tablet to Maita Electronics for 200,000 yuan (about $30,857.60 USD). They have now been sentenced in Shenzhen City: 'Xiao Chengsong, the legal agent of Maita Electronics, to 18 months in prison and fined him 150,000 yuan ($23,000) for buying the design from two Foxconn workers ... Foxconn employee Lin Kecheng, was sentenced to 14 months and fined 100,000 yuan, while another worker identified as Hou Pengna was given a two-year sentence suspended for one year and fined 30,000 yuan. All three were convicted of the crime of violating commercial secrets.'"

    And only one was sentenced to 18 months ... unless the associated press [] article I quoted was wrong.

  • I am not surprised and if this happened in the US, there could be similar punishments. Industrial espionage is a criminal offense in the US as well, although I am not sure what the punishment terms are.

    • by fnj ( 64210 ) on Tuesday June 21, 2011 @05:55AM (#36510314)

      Would you like your oppression with pickles or with mayonnaise? It's probably a similar corrupt corporatocracy situation in many parts of the world, with actions which should be dealt with in civil court criminalized. In the US, The Economic Espionage Act of 1996 brought us (among other insults) US Code Title 18, Part 1, Section 1832, which criminalizes such acts, stating that anyone who steals, or receives or possesses or uses without authorization, a trade secret, or merely ATTEMPTS same, shall be fined, or imprisoned up to 10 years, or both. The fine is limited to $5 million for an organization, but is WITHOUT ANY STATED LIMIT for an individual.

      Section 1831 deals with basically the same offenses "to benefit a foreign power," which means that section 1832, giving the lie to the name of the bill, has nothing to do with true espionage.

      This wonderful legislation, like the DMCA, was brought to you by a cooperation between tweedledee Democrats and tweedledum Republicans in Congress and the White House.

      • How is punishment for theft of trade secrets oppression? How is theft of a trade secret any different from theft of manufactured goods? Money went into creating those trade secrets. Trade secrets have a monetary value and are bought and sold every day. Should car theft be handled in civil court? Theft is still theft be it information or goods. Why should attempts be exempt from the law? Even if an attempt failed the intent to commit the act was still there. No one should get off the hook because they are a

    • by Grond ( 15515 )

      Industrial espionage is a criminal offense in the US as well, although I am not sure what the punishment terms are.

      Fines or up to 10 years in prison or both, if the stolen trade secrets stay in the US. 18 USC 1832 []. If it benefits a foreign entity then it's up to a $500,000 fine or up to 15 years in prison or both. 18 USC 1831 [].

  • by jellomizer ( 103300 ) on Tuesday June 21, 2011 @08:42AM (#36511176)

    I wish they would stop with these yellow journalism stupid heading that are just wrong.

    No they didn't go to prison because they made a case for the iPad, They went to prison for stealing IP secrets.

    Here is a better headline "3 Chinese sentence 18 months for stealing iPad specs before released"

  • Of course, that webpage happened to be Wikileaks.

    What's with the inflammatory headline? And why is China's "justice system" considered to be any more broken than the USA's?

    Didn't we used to hear that Kevin Mitnik wasn't even allowed to use the phone while in prison because officials were worried he could whistle into the mouthpiece and launch nuclear missiles?

    If anything, the Chinese handed down a reasonable sentence for industrial espionage, because that's what this case is. In fact, it's a more reasonable

  • I agree in taking a stand against rampant piracy such as in china where they know everything off....but i do not think this is what they meant, i think they were hoping to actually get the big companies, and not some lone users/small time chimps

Order and simplification are the first steps toward mastery of a subject -- the actual enemy is the unknown. -- Thomas Mann