Trade Secret Theft by Employees: Lessons from the Philips Engineer Conviction
A federal jury in Chicago has convicted a former Philips Medical Systems engineer of conspiring to steal proprietary X-ray technology and use it for the benefit of a Chinese competitor.
The case is a useful reminder for US businesses that threats to intellectual property do not always begin with an external cyberattack. Employees and former employees may already have legitimate access to commercially sensitive information, making suspected trade secret theft particularly difficult to identify and investigate.
For companies developing proprietary technology, confidential processes, product designs or other valuable intellectual property, responding quickly can be critical to establishing what happened, preserving evidence and determining the appropriate legal response.
Former Philips Engineer Convicted of Trade Secret Theft
According to the US Department of Justice, Chih-Yee Jen worked as an engineer at a Philips facility in Aurora, Illinois, where employees researched and developed X-ray tubes used in computed tomography medical imaging systems.
Philips had spent years developing proprietary X-ray technology through its Dunlee brand.
The DOJ said that in 2017, while Philips was preparing to close the Aurora facility, China-based Kunshan GuoLi Electronic Technology Co. Ltd. and one of its vice presidents began communicating with Jen about establishing a US subsidiary that would compete with Philips in the X-ray tube market.
While still employed by Philips, Jen began sharing confidential documents with the competing company. Prosecutors said he copied proprietary X-ray trade secret information from Philips' internal databases and subsequently used the information in connection with competing technology.
Jen also recruited other Philips engineers to join the new operation.
Following a week-long trial in Chicago, a federal jury convicted him on August 21, 2026, of conspiracy to steal, misappropriate or possess trade secrets and possession or attempted possession of stolen trade secrets.
Two other former Philips engineers had previously pleaded guilty to possessing stolen trade secrets.
Why Employee Trade Secret Theft Can Be Difficult to Detect
Many intellectual-property investigations involve an important complication: the person suspected of taking information may originally have been entitled to access it.
Engineers may legitimately access technical designs and product documentation. Finance personnel may see commercially sensitive data. Senior employees may have access to strategy documents, customer information or confidential negotiations.
The key question is therefore not always whether someone accessed information, but whether the access and subsequent use were legitimate.
An internal investigation may need to establish:
- What information was accessed.
- Whether information was copied, downloaded or transferred.
- When the activity occurred.
- Whether it was consistent with the employee's role.
- Whether confidential information was later disclosed or used elsewhere.
- Whether other employees or third parties were involved.
These questions can become particularly important when an employee is preparing to leave for a competitor, establish a competing business or move into a role where the information may have commercial value.
Warning Signs Businesses Should Take Seriously
No single behavior proves that trade secret theft has occurred. However, combinations of unusual activity can justify closer examination.
Potential indicators can include large or unusual downloads shortly before resignation, accessing information outside an employee's normal responsibilities, copying substantial volumes of sensitive material or transferring information in ways that do not appear consistent with normal business activity.
Concerns may also arise only after an employee has left.
A competitor may launch a very similar product. Confidential pricing or strategic information may appear to have been compromised. Customers may be approached using information that was not publicly available.
At that stage, the challenge is often reconstructing events after the fact.
Preserving Evidence When Trade Secret Theft Is Suspected
A rushed response to suspected employee misconduct can make a later investigation more difficult.
Before confronting an individual or making changes that could affect relevant records, companies should consider what evidence may need to be preserved.
Depending on the circumstances, this may include company devices, access logs, email records, document histories, corporate messaging systems and cloud platforms, together with other lawfully available records.
The objective should be to establish a clear chronology showing what information existed, who could access it, what activity took place and how that activity may relate to the suspected misuse.
Where litigation is anticipated, businesses should also coordinate closely with legal counsel so that evidence preservation and investigative activity support the wider legal strategy.
Conflict International USA's Litigation Support Services assist attorneys, corporations and private clients with intelligence and evidence gathering relevant to complex disputes.
An Investigation May Need to Look Beyond One Employee
The Philips case also demonstrates why suspected trade secret theft should not always be treated as an isolated act by one individual.
The DOJ said Jen recruited other Philips engineers to the competing operation, while two former Philips engineers separately pleaded guilty to possessing stolen trade secrets.
Where concerns arise, investigators may therefore need to look beyond a single employee and examine the wider network around the suspected activity.
That can include identifying relationships between former employees, competitors, associated businesses and other individuals who may have received, used or benefited from confidential information.
A properly structured investigation may also help clarify timelines, corporate connections and communications surrounding the suspected misconduct.
For matters requiring discreet fact-finding, Conflict International USA provides Specialized Private Investigations for corporations, attorneys and private clients dealing with sensitive commercial concerns.
Trade Secret Theft Is Not the Same as a Conventional Cyberattack
Businesses often focus heavily on preventing unauthorized external access to their systems.
Those controls remain essential, but they address only part of the risk.
An authorized employee may not need to defeat sophisticated cyber defenses if their role already gives them access to valuable information. This makes the investigative challenge different from identifying an unknown external intruder.
The business may instead need to distinguish normal workplace activity from misuse while protecting evidence, maintaining confidentiality and avoiding premature conclusions.
This human element also overlaps with wider corporate-espionage concerns. As discussed in our article on Shadow AI and Corporate Espionage, commercially sensitive information can leave an organization through multiple channels, including apparently legitimate tools and authorized users.
The Philips case illustrates the more deliberate end of that risk: proprietary information allegedly copied from internal systems and then used in the development of competing technology.
What US Businesses Can Learn from the Philips Case
Companies cannot eliminate every risk associated with employees having access to confidential information. That access is often necessary for them to perform their roles.
The priority is ensuring that organizations can identify unusual activity and respond effectively when legitimate concerns arise.
Businesses handling valuable intellectual property should consider whether they can clearly identify their most sensitive information, understand who can access it and preserve relevant records if misconduct is suspected.
They should also have a clear escalation process involving the appropriate combination of management, HR, information security, legal counsel and external investigators.
Most importantly, businesses should not assume that authorized access automatically means authorized use.
Investigating Suspected Trade Secret Theft
Suspected intellectual-property theft can quickly develop into a complex corporate and legal dispute, particularly where former employees, competitors or overseas organizations are involved.
A properly structured investigation can help establish the facts, preserve evidence, identify relevant individuals and provide attorneys or corporate decision-makers with reliable intelligence on which to act.
Conflict International USA supports corporations, legal teams and individuals facing sensitive investigative and litigation matters across the United States and internationally.
If you are concerned that proprietary information, confidential business material or intellectual property may have been unlawfully taken or misused, contact Conflict International USA for a confidential consultation.