Rare Economic Espionage Case Filled With Quirks

Dan Levine

The Recorder

2009-10-20 00:00:00.0

Among the reasons to check out a rare economic espionage trial kicking off this week in San Jose, Calif.: allegations about Chinese efforts to penetrate Silicon Valley; the prospect of both defendants taking the stand; the wife of one defendant testifying for the government; and a procedure for handling witnesses that is hardly ever used in criminal cases.

Jury selection begins Tuesday in the prosecution of Lan Lee and Yuefei Ge, two former engineers for NetLogic Microsystems Inc. who were charged in 2006 with trade secret theft. Federal prosecutors then bumped up the indictment to include economic espionage, saying the defendants tried to commercialize stolen computer chip data with venture funding from the Chinese government.

After each witness testifies, Northern District of California Judge James Ware will allow lawyers from each side to give a five-minute "summary argument" to "heighten juror comprehension and sharpen the issues in dispute." The side presenting the witness will go first.

Susan Bolton, a U.S. district judge based in Phoenix who chaired the 9th Circuit's Jury Trial Improvement Committee, had never heard of the format being used in a criminal trial. Some judges allow intermittent argument during complicated civil trials, like IP cases, she said, but usually not after every witness.

"It's a technique that's used very, very rarely," she said.

Defense lawyers Thomas Nolan of Nolan, Armstrong & Barton in San Jose and Edward Swanson of Swanson, McNamara & Haller in San Francisco requested the format, "given the complexity of this case and the technical nature of many of the witnesses' anticipated testimony," they wrote in a court filing.

Assistant U.S. Attorney Matthew Parrella opposed the move, calling it a waste of time that serves no productive purpose.

"Allowing the defense to make multiple arguments to the jury before all of the government's evidence has been presented to the jury would almost certainly confuse the jury and be unfairly prejudicial to the government," Parrella wrote.

Because prosecutors get to put on all of their evidence first, Bolton speculated that the five-minute argument would be seen by the defense as a good way to strategically insert its narrative in front of the jury much earlier than normal.

Variations from routine trial procedure are usually only done with the consent of both parties, she said. "Certainly I think it will keep the jury more engaged and at least help them evaluate the significance of the evidence," Bolton said.

The case against Lee and Ge began in 2002, when the CEO of NetLogic, Ron Jankov, received an e-mail from Ge's wife tipping Jankov off to the alleged scheme. She also made an anonymous call to the FBI.

Agents visited the company and interviewed both engineers. Ware threw out the statements made during those talks, but business plans found on their computers will be allowed in front of the jury.

Ware also won't let the government call two other engineers with Chinese backgrounds who had pleaded guilty in a separate case. After cutting a deal, Ming Zhong and Fei Ye appeared before the grand jury investigating Lee and Ge to give background information about how the Chinese government funds tech startups. But Ware said their testimony would be unduly prejudicial.

The trial is expected to last several weeks.