8 ms·

Employee arrested for theft of trade secrets from Machine Zone, Inc

26 points by gdeglin 11y ago

octaveguin 11y ago
The thing most concerning here is that it seems like the employee never used the 'trade secret'. He just downloaded the source code - code, presumably, he wrote. And of course that this is criminal, not civil. Scary.
- mirashii 11y ago
  If you take the time to read even the first page of the affidavit, you'll see that it's not source code that he took, it was business analytics information from Tableau. > The thing most concerning here is that it seems like the employee never used the 'trade secret' I don't see why this is so concerning. Most justice systems try to prevent the damages that a crime will commit even if the act is stopped. That's why attempted murder is a crime which you can be charged for.
- Rainymood 11y ago
  >code, presumably, he wrote Just to note (as far as I know) the code you write doesn't necessarily mean that it's code you own. If you write some awesome ass code for school for example the school can claim copyright or some sorts. He wrote the code while working for Machine, so they presumably own the code. Please correct me if I'm wrong.
  - leereeves 11y ago
    In the US, something made by an employee within the scope of his or her employment is a work made for hire and the employer owns the copyright. Non-employees could also agree to a contract transferring copyright or, in some limited circumstances, agreeing the work is a work made for hire. But I'm fairly sure that you're wrong about things you write for school, unless you're an employee of the school or you signed something transferring copyright.
    - the_hangman 11y ago
      Most engineering programs (at least in the US) have students sign documents that state that the University will own the copyright to anything that they create in labs or for University classes.
- deleted 11y ago
  [deleted]
trhway 11y ago
the affidavit (http://www.justice.gov/usao-ndca/file/763991/download http://www.justice.gov/usao-ndca/file/763991/download) is basically a boring and bad-divorce-ugly saga how a Director (not "employee") lost the office battle and was stupid/careless enough to mention having some Tableau analytics (the company's proprietary info by definition) downloaded and in his possession in the course of the severance discussion recorded by FBI. I don't think he would be that careless if the info was really valuable and he intended to profit from it, ie. if he really "stole" it and valued it. It sounds pretty plausible that he used it only to understand the value of his options. Making enemies and giving them the opening to bring in FBI seems to be his main sin here. Now they also incriminate him wiping out his laptop before returning. I wonder has anybody here returned company laptops (upon leaving or upgrade) without nuking it? I mean i do access my bank and other accounts from the laptop ...
- humanrebar 11y ago
  I'm not a lawyer, but this sounds like extortion to me. As in, "It would be awful if your business caught fire and burnt to the ground after I left the company...." Theft of trade secrets is severe, but I'm always dissatisfied to see criminal charges for hurting someone's business model. In this case, there is more despicable behavior that is not being explicitly prosecuted.
  - trhway 11y ago
    I don't argue here - allowing any connection, implicit or explicit, between return of proprietary stuff and severance immediately creates impression of extortion and puts the one into very vulnerable position, and this is why doing it, even unintentionally, is a stupidity or carelesness at best.
- Jare 11y ago
  This article http://www.gamesindustry.biz/articles/2015-08-26-another-day-another-trade-secrets-lawsuit-for-machine-zone http://www.gamesindustry.biz/articles/2015-08-26-another-day... refers to Zeng attempting to use the info to negotiate better severance, which if true is basically blackmail. The article also links to other (possibly unrelated) post on MachineZone's recent clash (heh) with Kabam.
mc808 11y ago
I've never heard of the "Special Prosecutions and National Security Unit", but it doesn't sound like something that should care about some online game's analytics data. Combined with the guy being arrested as he was about to leave for China, I can't help wondering if there is much, much more to this story. E.g. they felt a need to hold him for something, and this was the best they could come up with.
- leereeves 11y ago
  According to http://www.justice.gov/usao-ndca/divisions http://www.justice.gov/usao-ndca/divisions > The Special Prosecutions and National Security Unit is responsible for supporting counterterrorism and counterespionage investigations and prosecutions in the district. In addition, the Special Prosecutions and National Security Unit prosecutes public corruption, environmental, civil rights, child exploitation, illegal export, and immigration cases.
  - eblume 11y ago
    So this could fall under their jurisdiction with 'illegal export'?
- halviti 11y ago
  I always enjoy entertaining conspiracy theories, but in reality if you have a problem employee and evidence of them downloading your company's important info, and have legitimate concerns that they are going to take it elsewhere, would you not call the authorities/FBI? Regardless, if you want to know the whole story, you can read the affidavit from the link which contains literally all of the details of exactly how this played out. tl;dr - there's really not much more to the story, the summary is exactly what happened.
  - mc808 11y ago
    I'm not sure who I would call first, but if it led me to the FBI then I would probably expect the Computer Hacking and Intellectual Property Unit (from leereeves link) to do the investigation/prosecution. It also seems odd that the FBI would respond so thoroughly on such a short notice, as if they had already been communicating with the company, although that could just be because he was about to leave the country.
deleted 11y ago
[deleted]

26 points by gdeglin 11y ago

The thing most concerning here is that it seems like the employee never used the 'trade secret'. He just downloaded the source code - code, presumably, he wrote. And of course that this is criminal, not civil. Scary.

mirashii 11y ago
If you take the time to read even the first page of the affidavit, you'll see that it's not source code that he took, it was business analytics information from Tableau. > The thing most concerning here is that it seems like the employee never used the 'trade secret' I don't see why this is so concerning. Most justice systems try to prevent the damages that a crime will commit even if the act is stopped. That's why attempted murder is a crime which you can be charged for.
Rainymood 11y ago
>code, presumably, he wrote Just to note (as far as I know) the code you write doesn't necessarily mean that it's code you own. If you write some awesome ass code for school for example the school can claim copyright or some sorts. He wrote the code while working for Machine, so they presumably own the code. Please correct me if I'm wrong.
- leereeves 11y ago
  In the US, something made by an employee within the scope of his or her employment is a work made for hire and the employer owns the copyright. Non-employees could also agree to a contract transferring copyright or, in some limited circumstances, agreeing the work is a work made for hire. But I'm fairly sure that you're wrong about things you write for school, unless you're an employee of the school or you signed something transferring copyright.
  - the_hangman 11y ago
    Most engineering programs (at least in the US) have students sign documents that state that the University will own the copyright to anything that they create in labs or for University classes.
deleted 11y ago
[deleted]

trhway 11y ago

the affidavit (http://www.justice.gov/usao-ndca/file/763991/download http://www.justice.gov/usao-ndca/file/763991/download) is basically a boring and bad-divorce-ugly saga how a Director (not "employee") lost the office battle and was stupid/careless enough to mention having some Tableau analytics (the company's proprietary info by definition) downloaded and in his possession in the course of the severance discussion recorded by FBI. I don't think he would be that careless if the info was really valuable and he intended to profit from it, ie. if he really "stole" it and valued it. It sounds pretty plausible that he used it only to understand the value of his options. Making enemies and giving them the opening to bring in FBI seems to be his main sin here. Now they also incriminate him wiping out his laptop before returning. I wonder has anybody here returned company laptops (upon leaving or upgrade) without nuking it? I mean i do access my bank and other accounts from the laptop ...

humanrebar 11y ago
I'm not a lawyer, but this sounds like extortion to me. As in, "It would be awful if your business caught fire and burnt to the ground after I left the company...." Theft of trade secrets is severe, but I'm always dissatisfied to see criminal charges for hurting someone's business model. In this case, there is more despicable behavior that is not being explicitly prosecuted.
- trhway 11y ago
  I don't argue here - allowing any connection, implicit or explicit, between return of proprietary stuff and severance immediately creates impression of extortion and puts the one into very vulnerable position, and this is why doing it, even unintentionally, is a stupidity or carelesness at best.
Jare 11y ago
This article http://www.gamesindustry.biz/articles/2015-08-26-another-day-another-trade-secrets-lawsuit-for-machine-zone http://www.gamesindustry.biz/articles/2015-08-26-another-day... refers to Zeng attempting to use the info to negotiate better severance, which if true is basically blackmail. The article also links to other (possibly unrelated) post on MachineZone's recent clash (heh) with Kabam.

mc808 11y ago

I've never heard of the "Special Prosecutions and National Security Unit", but it doesn't sound like something that should care about some online game's analytics data. Combined with the guy being arrested as he was about to leave for China, I can't help wondering if there is much, much more to this story. E.g. they felt a need to hold him for something, and this was the best they could come up with.

leereeves 11y ago
According to http://www.justice.gov/usao-ndca/divisions http://www.justice.gov/usao-ndca/divisions > The Special Prosecutions and National Security Unit is responsible for supporting counterterrorism and counterespionage investigations and prosecutions in the district. In addition, the Special Prosecutions and National Security Unit prosecutes public corruption, environmental, civil rights, child exploitation, illegal export, and immigration cases.
- eblume 11y ago
  So this could fall under their jurisdiction with 'illegal export'?
halviti 11y ago
I always enjoy entertaining conspiracy theories, but in reality if you have a problem employee and evidence of them downloading your company's important info, and have legitimate concerns that they are going to take it elsewhere, would you not call the authorities/FBI? Regardless, if you want to know the whole story, you can read the affidavit from the link which contains literally all of the details of exactly how this played out. tl;dr - there's really not much more to the story, the summary is exactly what happened.
- mc808 11y ago
  I'm not sure who I would call first, but if it led me to the FBI then I would probably expect the Computer Hacking and Intellectual Property Unit (from leereeves link) to do the investigation/prosecution. It also seems odd that the FBI would respond so thoroughly on such a short notice, as if they had already been communicating with the company, although that could just be because he was about to leave the country.

deleted 11y ago

[deleted]