US jury convicts ex-Philips engineer for stealing X-ray trade secrets for Chinese competitor

A 71-year-old engineer was convicted of extracting four categories of trade secrets from Philips’ internal databases and handing them to Kunshan GuoLi Electronic Technology. The stolen material covered everything from annealing specifications to code, giving the Chinese competitor a shortcut to replicate Philips’ X-ray tube designs. The transfer happened after Philips announced the closure of its Aurora, Illinois, facility, but before the engineer left the company.

The timeline reveals a persistent risk window. Talks with the competitor began in August 2017, the engineer departed in December 2017, and he started work at the Chinese-owned subsidiary in January 2018. Philips filed suit in April 2019, yet the engineer allegedly retained and concealed trade secrets until July 2022. This five-year span shows that IP leakage can continue long after an employee’s last day, complicating post-employment monitoring.

Philips required all departing staff to sign a Settlement and General Release Agreement that barred use of technical information. The conviction demonstrates that such agreements are enforceable in court, but enforcement still depends on detection. Two other engineers who worked on the same X-ray tubes pleaded guilty before trial, suggesting that the company’s internal audit or whistle-blower channels eventually flagged the activity.

The case also highlights the global nature of the supply chain. The Chinese subsidiary operated in the same Illinois town where Philips had its facility, and the stolen designs were later sold in China. Engineers who move between competitors in the same region can carry undetected knowledge, making physical proximity a continued risk factor for trade-secret theft.