Planting the Seeds of a Security Threat: Seed Theft and Economic Espionage

     In December 2013, Nicholas Klinefeldt, the U.S. Attorney for the Southern District of Iowa, indicted seven Chinese citizens for the theft of trade secrets regarding corn seeds. Of those seven, only two— siblings, Mo Hailong and Mo Yun— are currently being prosecuted; even though all worked for Beijing Dabeinong Technology Group, a Chinese company specializing in agricultural science and technology. Both brother and sister were intimately involved in the upper echelon of DBN Group; Mo Hailong served as the director of international business, while his sister Mo Yun is the wife of Dr. Shao Genhuo, the CEO of DBN Group. The other five, who have purportedly fled the U.S., all worked for Kings Nower Seed, a subsidiary of DBN Group. The case was recently re-entered the media’s attention when it became known that the FBI, under the Foreign Intelligence Surveillance Act (FISA), has been using anti-terrorism surveillance tactics to investigate the siblings. 

     The corn seeds that the group intended to appropriate from Monsanto and DuPont, both huge players in the agribusiness field, were specially inbred seeds used to breed hybrids that farmers could buy. Inbred seeds are highly valuable because companies spend millions of dollars each year to produce new hybrids that are resistant to drought and insects, or able to grow with more success and virility. Use of such seeds would have allowed China to attempt to catch the U.S. production rates of corn. 

     DuPont became suspicious when Mo Hailong was spotted in 2011 digging in one of their cornfields; when approached by a security guard, Mo Hailong claimed that he was an employee at University of Iowa, jumped in his car, and drove away. A year later, three of the indicted individuals attempted to smuggle seeds out of the U.S. hidden in Orville Redenbacher popcorn boxes and napkins. Mo Yun became implicated in the plot through text messages from 2007 and 2008 discussing the theft of corn seeds for her husband’s company. Defense counsel’s main contention has involved the testing of the seeds; testing requires genetic analysis and the actual planting of the seeds, a rather lengthy process. The defense claims that the government took a long time to begin the process leaving no time for the defense to conduct similar tests. However, the most controversial issue is the government’s use of surveillance tactics normally reserved for “terrorist threats” to build their case against the Mo siblings.

     The members of the group were monitored with the same technology and surveillance tactics used to monitor threats to national security, including the placement of tracking devices on cars and the tapping of cellphones. With the approval of the Foreign Intelligence Surveillance Court (FISC)—a “secret” court comprised of eleven federal judges—the FBI moved forward and investigated the seven members over the course of two years before filing the indictment. The government’s two-year investigation yielded roughly 500,000 documents, as well as audio tapes and surveillance footage. After FISA passed in 1978, the FISC was tasked with creating guidelines for the manner in which agents working for a “foreign power” may be monitored. 

     The use of such measures raises a number of concerns. For example, whether such surveillance is an invasion of these individuals’ privacy, or should the FBI be using these sorts of resources for the theft of trade secrets? Although it is true that agricultural byproducts like these seeds would fall under the umbrella of trade secret, the seeds are valuable and important to the furthering of the U.S.’s competitiveness in the biotechnical global field. Because individuals were purportedly attempting to steal something from the United States, some would argue that this is a direct attack on national security. However, several factors separate this case from other surveillance and intellectual property cases. The economic value of the trade secret in question should not have any bearing on what charge to impose. Alternatively, FISA was designed to protect against spying on the U.S. by foreign governments; the government pointed to DBN’s alleged close ties with the Chinese government as sufficient reasoning for the extensive surveillance measures. Although the Chinese government only owns 1.08 % of DBN Group, there does seem to be evidence indicating that the company has ties to the Communist Party of China, something that could make it more difficult for defense counsel to suppress the surveillance evidence as unnecessary intrusion into their client’s lives. 

     An additional important factor in the debate over the appropriateness of such surveillance measures is the fact that the government could have presumably chosen to charge the Mo Hailong and Mo Yun with economic espionage rather than the theft of trade secrets. Under the Economic Espionage Act of 1996, economic espionage is the “acquisition of trade secrets” for the benefit of “any foreign government, […] instrumentality, […] or agent.” Although the theft of trade secrets, or industrial espionage, criminalizes similar activity, it is different from economic espionage because the theft merely needs to benefit someone other than the owner. Since the siblings were charged with the latter, the question is raised as to whether there really is any connection between the theft and the Chinese government. It could be argued that the U.S. government chose to indict the pair on the broader charge rather than fail to establish a viable connection to the Chinese government. Regardless, as this case moves forward, it will be important to see how the court responds; the decision could mark an important precedent in a rather unsowed field. Allowing this form of surveillance for non-militant foreign government agents could arguably lead to the allowance in the future for similar surveillance in a number of situations.

By Jacqueline Morley
CLP Articles Editor