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HTC's top designers reportedly in custody after stealing trade secrets

HTC's top designers reportedly in custody after stealing trade secrets


Internal issues aplenty at HTC

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HTC One (stock image)
HTC One (stock image)

Following reports of internal disarray in May, when several executives departed, HTC has filed a formal complaint out of its offices in Taipei, Taiwan, that several high-level employees stole trade secrets after planning to leaving the company. Several Chinese papers report that HTC's VP of product design Thomas Chien, an R&D director Bill Wu, and design team senior manager Justin Huang  were among five employees that planned to leave the company after collecting their mid-year bonuses yesterday.

Authorities raided HTC's R&D center yesterday

Engadget's Richard Lai cites several Chinese sources as reporting that HTC "caught Chien secretly downloading files related to the upcoming Sense 6.0 UI design" and sharing the data with external contacts via email. Chien and Wu were reportedly both taken into custody following raids at HTC's R&D center and the suspects' homes and offices.

In addition to stealing trade secrets, HTC also alleges the designers charged elevated fees for their part in the design of HTC's One smartphone. Although the design was done in-house, Lai reports that Chien, Wu, and Huang are accused of using "an external design firm to invoice HTC for over $334,000" before splitting the fee between themselves. The trio have reportedly registered a new design company aimed at the Chinese market, where Focus Taiwan claims they're "likely to work with Chinese smartphone vendors to develop new models, using the technology they stole from HTC." According to the China Post, one suspect at the scene of the R&D raid claimed HTC management was aware of the new business and questioned the reason for the search. It should be noted that, while UDN agrees with the chain of events, it doesn't attribute the comments to suspect, but rather an onlooker.

The problems are two-fold for HTC

The problems are two-fold for HTC. As well as allegedly dealing with a major issue of internal fraud, the company also looks likely to lose some very important members of its design team. Huang personally sketched out the design for the HTC One, while Chien spearheads the entire product design team in Taiwan. HTC hasn't commented on any of the revelations, apart from to note that "the matter is under investigation by relevant authorities."

Update: HTC has elaborated on its previous statement, telling us that it "expects employees to observe and practice the highest levels of integrity and ethics. Protecting the company’s proprietary and intellectual properties, privacy and security is a core fundamental responsibility of every employee. The company does not condone any violation. As this matter is currently under investigation by the relevant authorities, we therefore refrain from further comments."