Haoyang Yu worked for Analog Devices, Inc. (ADI), a manufacturer of specialized microchips used in infrastructure and defense. While employed, Yu downloaded proprietary design files, specifically the GDS layout for the HMC1022A microchip, and retained them after resigning. He subsequently established a new company, Tricon MMIC, and used the stolen files to manufacture and sell microchips that competed with ADI's products. A grand jury indicted Yu on twenty-one counts, including trade secret theft, wire fraud, and illegal exports. Although the jury convicted him on all counts initially, it ultimately acquitted him on all charges except one: unlawful possession of a trade secret under 18 U.S.C. § 1832(a)(3). Yu appealed, challenging the sufficiency of the evidence regarding the trade secret elements and arguing that he was selectively investigated and prosecuted based on his Chinese ethnicity in violation of the Fifth Amendment's Equal Protection Clause.
The court addressed two primary issues: the sufficiency of the evidence and the constitutional claims of selective enforcement and prosecution. Regarding sufficiency, Yu argued the evidence was insufficient because the file he possessed was an abandoned prototype rather than the final product, and because the final product was publicly available, making the design 'readily ascertainable.' The court rejected this, holding that the indictment clearly referred to the prototype file Yu possessed. Furthermore, the court found sufficient evidence that the design retained independent economic value because reverse-engineering a microchip design from a physical chip requires significant time, specialized equipment, and skill, meaning it was not 'readily ascertainable' even after the product was on the market. The court also found sufficient evidence that Yu knew the files were trade secrets, inferred from his confidentiality agreements, his efforts to conceal the files by renaming them, and his request that the manufacturer treat his own files as proprietary. On the constitutional claims, the court applied the standard from United States v. Armstrong, requiring 'clear evidence' that similarly situated individuals of a different race were not prosecuted. The court found no clear error in the district court's determination that Yu's proposed comparators were not similarly situated, as they lacked the specific elements of illegal export or transfer to a foreign entity. Regarding selective enforcement, the court clarified that the 'clear evidence' standard does not apply; instead, such claims must be proven by a preponderance of the evidence. However, the court affirmed the lower court's finding that law enforcement had a legitimate, non-discriminatory reason to investigate Yu, citing the potential military use of the technology and the national security context of economic espionage by China.
The decision affirms the conviction of Haoyang Yu, reinforcing that microchip design files retain trade secret status even after a product is released if reverse-engineering remains difficult and costly. It establishes that the First Circuit will apply a preponderance of the evidence standard to selective enforcement claims, a lower burden than the 'clear evidence' standard for selective prosecution, though the court found the government's national security rationale sufficient to withstand the challenge. The ruling clarifies that defendants must provide specific evidence of similarly situated non-prosecuted comparators to succeed on equal protection claims in trade secret cases involving foreign technology.
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