Protecting trade secrets in the age of AI: Lessons learnt from the theft of Google trade secrets

In today's rapidly evolving technological landscape, the protection of trade secrets has become more critical than ever. A recent high-profile case involving the theft of Google trade secrets linked to their AI technology highlights the importance of robust intellectual property strategies for businesses, especially those in the technology sector.

HOW DID THE THEFT OF GOOGLE'S TRADE SECRETS OCCUR?

Linwei Ding, a Chinese national and former Google software engineer, was charged with stealing proprietary AI technology to benefit two People’s Republic of China (PRC)-based tech companies.

On 4 Feb 2025, Ding was indicted on seven counts of theft of trade secrets and seven counts of economic espionage by a federal grand jury in San Francisco. If convicted, the defendant will face a maximum penalty of 10 years in prison and a $250,000 fine for each count of theft of trade secrets, and a maximum penalty of 15 years in prison and a $5,000,000 fine for each count of economic espionage. The sentence will be determined by a federal district court judge after considering the guidelines and statutory factors.

According to the indictment, Ding was hired by Google in 2019 before allegedly uploading over 1,000 confidential files from Google’s network to his personal cloud account between (approximately) May 2022 and May 2023.

The confidential information includes detailed information about Google's Tensor Processing Unit (TPU) chips, Google’s Graphics Processing Unit (GPU) systems, software designs for Google’s cluster management system for executing cutting-edge AI workloads, and Google’s SmartNIC hardware infrastructure. It was understood that some of the stolen information provided Google with a competitive edge over its major rivals, Amazon and Microsoft.

While employed at Google, Ding is said to have spent several months working for the start-up tech company, Beijing Rongshu Lianzhi Technology, in the PRC and was being considered for the position of Chief Technology Officer. However, it was reported that Ding had in fact founded his own tech company, Shanghai Zhisuan Technology, which focuses on AI and machine learning in the PRC by May 2023. Prosecutors of the case allege that the defendant failed to inform Google of his work for either company.

The indictment further discloses that the defendant benefitted the PRC by circulating PowerPoint presentations supporting the development of AI in the PRC and containing an application to a PRC talent program. Typically, such PRC talent programs target and motivate researchers to engage in R&D outside of the PRC in order to communicate that knowledge back to the PRC in exchange for e.g., salaries, funding for research, and lab space.

This incident illustrates the persistent and evolving nature of threats to trade secrets, particularly in areas of advanced technologies like AI.

HOW DID THE DEFENDANT CIRCUMVENT GOOGLE'S SECURITY?

It is unsurprising that Google heavily invests in both physical and cybersecurity, so how was the defendant able to evade this?

The indictment reports that the defendant managed to exfiltrate the confidential files by copying data from Google source files into the Apple Notes application on his Google-issued MacBook laptop. The information was then converted into PDF files before being uploaded from the Google network into the defendant’s personal Google Cloud account in order to avoid immediate detection by Google. The defendant gradually exfiltrated these files over a year, from May 2022 to May 2023.

THE IMPORTANCE OF TRADE SECRETS 

Trade secrets are a vital component of a company's intellectual property portfolio.

They encompass a wide range of confidential business information, including formulas, practices, processes, designs, instruments, patterns, or compilations of information that provide a competitive edge. Unlike patents, trade secrets do not require public disclosure, making them an attractive option for protecting sensitive information.

However, the very nature of trade secrets—being confidential—also makes them vulnerable to theft. The unauthorised acquisition, use, or disclosure of trade secrets can have devastating consequences for businesses, including loss of competitive advantage, financial damage, and reputational harm.

LESSONS LEARNT

Implement robust security measures

Companies must invest in comprehensive security measures to protect their trade secrets. This includes both physical and digital security protocols, such as encryption, access controls, and regular security audits. Ensuring that only authorised personnel have access to sensitive information is crucial.

Employee training and awareness

Educating employees about the importance of trade secrets and the potential consequence of their theft is essential. Regular training sessions can help employees recognise and report suspicious activities. Additionally, fostering a culture of security awareness can significantly reduce the risk of insider threats.

Legal safeguards

Companies should implement trade secret policies and legal safeguards, such as non-disclosure agreements (NDAs) and non-compete clauses. These agreements can prevent employees from disclosing confidential information and provide legal recourse in the event of a breach.

Monitoring and detection

Continuous monitoring of network activities and data access can help detect unauthorised attempts to access or exfiltrate trade secrets.

Collaboration with intellectual property specialists

In the event of a trade secret theft or suspected theft, prompt collaboration with IP specialists is vital. As seen in the cases involving Google, working closely with authorities can aid in the swift apprehension of perpetrators and the recovery of stolen information.

CONCLUSION

The protection of trade secrets is a critical aspect of maintaining a competitive edge in today's technology-driven world. This case involving the theft of AI technology from Google serves as a reminder of the ongoing threats to intellectual property. By implementing robust security measures, fostering a culture of awareness, and collaborating with legal specialists, companies can better safeguard their valuable trade secrets and mitigate the risks associated with their theft.

Staying abreast of the latest developments in trade secret protection is essential. As technology continues to advance, so too must the strategies employed to protect the invaluable assets that drive innovation and success.

If you are concerned you may need some support to ensure you are protecting and keeping your trade secrets secret, our SafeGuard audit will make the process easier. If you’d like to find out more or have any questions for our trade secrets specialists, please contact us today.

If you would like to find out more about this subject, the following reference points may be of interest:

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