A jury already gave the government a gut shot in its high profile espionage prosecution against two Silicon Valley engineers.
On Friday, Northern District of California Judge James Ware fired one right into the heart of the case, throwing out two economic spying counts on which the jury had hung. The only charge remaining is for trade secret theft.
The Justice Department has been vocal about blocking technology leaks to foreign governments, especially China. So it bumped up trade secret charges against Lan Lee and Yuefei Ge to include economic espionage. It accused Ge and Lee of stealing trade secrets from their employer, NetLogic Microsystems, and trying to commercialize them with venture funding from the Chinese government.
The trial in 2009 lasted three weeks, and the jury deliberated for five days. On both counts which Ware directed an acquittal Friday, the jury had hung 9-3 in favor of innocence. On the trade secret count Ware kept in play, they had divided 6-6.
"The government must present evidence that defendants intended to confer a benefit on the [People's Republic of China], not receive a benefit from it," Ware wrote. "The court finds evidence that defendants intended to apply for a grant from the PRC is insufficient to satisfy the statutory requirement that the government prove that the defendants intended to provide a benefit to the PRC, or one of its instrumentalities or agents."
Ware's ruling is not appealable. Assistant U.S. Attorneys Matthew Parella and Joseph Fazioli must now decide whether they want to retry the engineers on trade secret theft. The defendants were represented by Edward Swanson of Swanson & McNamara, and Thomas Nolan of Nolan, Armstrong & Barton.
