[co-author: Grace Hochstatter]

On August 7, 2024, the 6th Circuit upheld a Chinese spy’s twenty-year prison sentence for attempting to steal aviation trade secrets from General Electric (GE). Yanjun Xu, a deputy director in China’s Ministry of State Security, was responsible for trying to steal aviation-related proprietary information. He spent years inviting Western aviation experts to China, attempting to gain intellectual property from their respective companies. In 2017, Xu solicited a GE aviation engineer to give a presentation at the Nanjing University of Aeronautics and Astronautics and later requested the engineer bring his work computer—containing sensitive information about GE’s aviation program—to a meet-up. The FBI assumed the engineer’s identity, lured Xu to Belgium, and eventually arrested him in 2018. GE calculated the estimated loss of the intellectual property Xu targeted to be between $65 million – $150 million.

FBI Director Chris Wray has repeatedly warned of the threat the People’s Republic of China (PRC) poses to American intellectual property saying, “The PRC has made it clear that it considers every sector that makes our society run as fair game in its bid to dominate on the world stage…” The United States and its Five Eye partners, Canada, the United Kingdom, Australia, and New Zealand, have committed to strengthening private-public partnerships to better protect intellectual property, but the FBI has emphasized the need for companies to conduct their own assessment of information security vulnerabilities to reduce the threat of unintended disclosures or insider threat. Xu’s case underscores the very real need for companies to proactively secure their intellectual property—investing the time and resources to do so not only protects a company’s future, but American innovation as well.

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