In 2018, then Attorney General Jeff Sessions announced that Chinese espionage was occurring in university research labs, and the Department of Justice subsequently made it a high priority to prosecute economic espionage in academia. 

More recently, the director of the FBI has lamented that American taxpayers are footing the bill for China’s technological development. 

This geopolitical concern about espionage has had real world and personal consequences in academia. 

Since 2019, over a dozen high profile criminal prosecutions have put prominent professors at major research universities across the country in handcuffs and almost all the professors have been convicted of a crime.

That’s according to Elizabeth Rowe, Professor of Law at the University of Virginia.

An investigation by Rowe into the case “reveals much ambiguity about the very concept of academic economic espionage.” 

“Most telling, although labeled as spies, not one of the professors was actually charged with economic espionage,” Rowe writes in a newly released paper – Academic Economic Espionage? “Even one district court judge in granting a lighter sentence to one professor observed that contrary to the prosecution’s framing, the case was not one of espionage. Unlike in the corporate arena, there are fundamental questions surrounding the feasibility of prosecuting espionage in the university context. I theorize that this is because academia is grounded not in a culture of ownership, but of openness and sharing.” 

Rowe argues that while there is no de jure exceptionalism for universities when it comes to espionage, there may be de facto exceptionalism due to the lack of a proprietary culture that is typically at the heart of espionage cases.

“The academic prosecutions and other signals suggest that may be shifting, however, as the legal structure and larger incentives are directed toward greater recognition of proprietary interests in academia.”

You ask – “Can trade secrets and proprietary information exist in an academic environment that prioritizes and depends upon a culture of openness?”

I’m sensing from the tone of your article that trade secrets and proprietary information can’t exist in a culture of openness.

“They can exist,” Rowe told Corporate Crime Reporter in an interview last month. “But I’m much more skeptical of it working. In order for that to happen, a lot of protection needs to come into play.  Let’s say you start with information that is deemed to be confidential. Then you must engage in reasonable efforts to secure and protect that information to show it’s being kept secret.” 

“If you think about how universities work, in that culture of publishing and sharing, then it’s going to be much more difficult in that context to maintain and protect information enough that it could be considered a trade secret. That’s not to say that it’s not possible. It is possible.”

“Universities are now large patent holders. If we think about the period of time where there is early research and development done in labs before a decision is made to file a patent application, all of that information has generally been considered a trade secret. It takes an appropriate infrastructure in place, as companies do, to be intentional about protecting that information.”

“So it is possible, but it is fraught with difficulties and would require systematic and mechanical thinking and analysis about how to do that in the context of university openness.”

You say that when these cases are brought in the corporate setting, the corporation that is victimized is often cooperating with prosecutors.

Who is the victim in the academic setting?

“In the private sector, you tend to have competitor versus competitor. Pepsi versus Coke. In the university, you tend to not have that competitor to competitor situation. But from the government’s perspective, you have university information that is allegedly being taken and shared with other institutions in China for illegitimate reasons, then the university could be the victim. Typically it would be the victim that alerts the FBI of the alleged theft and tries to get them involved.”

“From what I saw from the cases that I looked at, it didn’t appear that the universities were the initial complainants in these cases, but rather the other government agencies, like the National Institutes of Health, for example. They were the ones alerting the FBI. Sometimes, the universities didn’t learn about the situation until after the arrest had been made.”

Increasingly, public universities are becoming partners with private corporations. That must also blur the line.

“Absolutely. And that is something that I raise in the paper as a sign of changes that are happening. And it’s why universities need to pay closer attention to how they’re managing trade secrets. As they continue to have collaborations with the private sector, there will likely be more trade secret civil litigation. But it also further exposes them to criminal litigation as well. It raises a whole host of questions about ownership of trade secrets and who should be protecting them.” 

“As universities evolve into research enterprises that start to look more and more like their industrial counterparts, then along with that comes attendant changes in how they ought to think about intellectual property and intellectual property rights.”

“They’ve been doing that in other areas of intellectual property – patent law and trademark law, for example. But these cases show that it’s also time for them to start thinking about their trade secret policies as well.”

In November 2018, the government announced what it called its China Initiative. This was headed up by federal law enforcement officials, including the then Attorney General, Jeff Sessions, who declared that as to increasing Chinese economic espionage – “Enough is enough. We’re not going to take it anymore.”

This legal issue can’t be separated from the political atmosphere in the country, not just in 2018 but now, where we are seeing increased war talk between China and the United States.

“These prosecutions were a direct result of the political situation. These prosecutions are part of the broader concern about national security. The concern has been about the theft of trade secrets from American companies. There has also been a growing concern in the last two years about not just companies, but universities. The government and the FBI are concerned that these researchers and graduate students at various universities may have access to information that they then would share with China and other countries that would put American interests in jeopardy.” 

“The national security concern is indeed at the heart of these particular prosecutions, but also overall when we are looking at corporate espionage in the context of trade secret theft. Those three are interwoven – trade secrets, economic security and national security.”

Many of the lawyers who practice in this area say politics doesn’t enter into prosecutorial decisions, that it’s just about the law and the facts. Our experience is that that is just not true. Every corporate crime prosecution has some political component to it.

I’m sensing that you believe this is politically driven. 

If you were a prosecutor, would you be bringing these cases against academics?

“It takes thought in order to prosecute successfully,” Rowe said.

Well, according to your paper, they were brought successfully. They ended up with guilty pleas or findings of guilt.

“The idea here was in part to send a message to universities and professors – you need to pay attention. That objective was met. They were able to come after professors and get convictions, albeit not on economic espionage charges. But a conviction is a conviction. And they got the headlines. And it probably had some kind of deterrent effect. The boxes were all checked.”

Are these cases coming at the same rate they were coming a couple of years ago?

“Not at the same pace. Under the Biden administration, this program was redesigned to focus less on China. But nonetheless, they continue to prosecute theft of trade secret cases. There was also some discussion that some of these cases might have been brought for the wrong reasons or they may be violating people’s civil rights. There was some thought along the lines of – maybe we won’t bring these as criminal cases and instead bring them as administrative or civil cases. The pace may have changed a bit. But they very well could continue. I don’t think we’ve seen the end of these cases.”

Any way to measure the deterrence of these cases?

“There are various reports that academics having read about these stories are certainly concerned. Researchers now have an awareness that when they are receiving grants from government agencies that there are these terms and conditions to which they may not have previously paid attention that they should be paying attention to. This has had a chilling effect with them collaborating with foreign researchers in general. We are seeing those kinds of indicators that there has been a deterrent effect at least at the level of caution. But ultimately, has there been a deterrent effect on those who intend to traffic in trade secrets? I’m not sure.”

[For the complete q/a format Interview with Elizabeth Rowe, see 37 Corporate Crime Reporter 14(13), April 3, 2023, print edition only.]