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Offering news and business analysis for the design engineer, Managing News Editor Suzanne Deffree filters the electronics industry's developments and trends to explain how what's happening in the board room today can impact the tech innovation of tomorrow. Follow Suzanne on Twitter, @Deffree. Suzanne also manages EDN's Twitter account, @EDNMagazine.

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Thursday, November 6, 2008

Ex-Intel engineer charged with stealing trade secrets while working for AMD

Nov 6 2008 12:16PM | Permalink |Comments (37) |

A former Intel engineer has been charged with stealing $1 billion worth of trade secrets while he was working for rival AMD, according to reports out this afternoon.

Biswamohan Pani of Worchester, Mass, allegedly illegally downloaded 13 "top secret" and "confidential" documents from Intel's computer systems in California in June.

According to reports, Pani had resigned from Intel at the time, but still had access to the MPU maker's system while he used some accumulated vacation days, and had told Intel that he was looking into a hedge fund job. Instead, reports claim he had begun working for AMD, where he is no longer employed.

Federal prosecutors have cleared AMD and say the company was not aware of Pani's alleged actions and did not benefit, reports say.

The allegations claim that Pani planned to use the information -- which was worth more than $1 billion in R&D costs and included specifics design details on coming generations of Intel MPUs -- "to advance his career at AMD or elsewhere by drawing on it when the opportunity arose, whether with his employer's knowledge or not," according to reports.

An Intel spokesman returned EDN calls and confirmed the company asked the Department of Justice and FBI to investigate Pani's activities. Beyond saying the company has an obligation to protect its assets and that it has cooperated with authorities, the spokesman did not comment on the pending legal matter, as is Intel policy.*

In his defense, Pani said he had no plans to harm Intel and was going to give the information to his wife, who also worked at the company, according to reports.

If I were a prosecutors, my response to that would be, "why didn't she just download the information herself?" And if I were Intel, I'd be taking a good hard look at HR's practices and company security right about now.

Finish your last day and, bam, you should be shut out. Intel confirms this is their policy.* But, heck, call me paranoid, in some cases, when an employee gives their two-weeks notice they should be shut out of confidential access immediately, even if it hinders their ability to work their remaining stretch at a company.

The case is expected to go to trail and Pani faces a maximum of 10 years in prison if convicted for trade secrets theft and up to 20 years on each of four wire fraud charges if convicted.

A max of 90 years. Is that fair? What do you think about the case? Share your thoughts on the case below.

*This blog post was updated at 2:51pm eastern to reflect comments from Intel.

Reader Comments

at 11/6/2008 1:42:12 PM, IP Guard Dog said:
This is the right move. In High tech industry, it is cirtical to protect IP's.

at 11/6/2008 1:44:14 PM, W said:
In Pani's case, I guess he must have had a bad intention since he went to work for AMD and downloaded Intel secret that he had know business of knowing in the first place. If I were him, I would have been smarter. Knowing Intel's legal history/culture, I would not have done what he did.
This is different than a case where he might still have his own work in his personal computer after leaving Intel. Ideally, you would have cleaned up your computer, but sometimes things just got backed up in a hdd somewhere.
That said, 90years is very long ...... :) Even a murderer on the street get a few years only. This is a case where Pani is going to spend so much money, such that by the time the trial is done and even if he is not guilty, he will be broke ..... regardless.

at 11/6/2008 2:03:14 PM, Duh said:
Ouch! At least try to be smart about it ot stay honest. You can't run a red light anymore or even drive with an expired license. But you think you can download a billion dollars worth of IP while you are employeed by the competition???

at 11/6/2008 2:11:25 PM, Mr. Write said:
I think 90 years is way too long. I wounder what "trail" he is going to go down? I''m sure he will be broke but I have no love lost for Intel either. They have used and abused their monopolistic-type position for a very long time and it wouldn''t surprise me at all if this is just the tip of the iceberg when it comes moral and ethical retribution... One can only hope!

at 11/6/2008 2:25:23 PM, um said:
murderers sometimes get off in 5. The govt steals our money and nobody there does time. Sounds like the guy lost his job over it and will pay the attorney tax, isn't that enough?

at 11/6/2008 2:30:47 PM, ArkySnarky said:
He should have just mass mailed everything to every information server on the internet to advance mankind. I have known of several cases where similar things have happened and since it was not for personal profit, the individual got a hand slap. His problem is that he kept the information to himself, and huge company like Intel is obviously going to track billion dollar documents, so uhhhhh.... this dude is hosed. I think 90 years is fine, and perhaps he will not be able to reproduce and propagate his stupidity to future generations.

at 11/6/2008 2:34:00 PM, cmpdude said:
Tech companies livelihood is completely dependent on IP and it respect. A move like this could kill a smaller company. 10 years in prison is too light a sentence.

at 11/6/2008 2:41:59 PM, anon said:
Did he use the information or not? If he didn't use the information, but had legal access to the information at the time he downloaded it - what is the proof that he did anything that was illegal? Bigger issue is, why is Intel going to be allowed to impoverish this guy by terrorizing him with law suits? It's Intel and it's monopolistic practices at work again - only can win through controlling the market (and people associated with it).

at 11/6/2008 2:51:31 PM, Tough said:
Both parties have to take responsibility for this one. Intel should have better security access and not aloud him to do what he did, and he shouldnt have done it. That being said, no harm was done as the info was not used. Sure it had dangerous potential, but so does a screwdriver. 90 years is rediculas, better off being a serial killer.

at 11/6/2008 2:57:57 PM, TheCosultinator said:
First of all, he admits to doing it so he should be punished for this illegal act. However, in considering the term of his sentence, prosecutor & defense should really dig into the REAL worth of the trade secret. One should not take Intel''s claim of 1B$ at its face value. My guess is they sand-bagged it by at least a factor of 3!
And of course, they can check if he really used the information for personal gains or not.It is not easy to sell a trade secret these days.

at 11/6/2008 3:34:21 PM, MellowFellow said:
The 90 years is press hype. They took the penalty for stealing 1 doc [7 yrs?] and got 13x=90. It is interesting to me that if you rob a bank, you only commit ''1 crime'' whether you get $$100k or $$100M. To Tough and anon

at 11/6/2008 3:38:42 PM, MellowFellow said:
something go cut off...
To Tough and anon.
You say that he did not use the info, he should be cut some slack. I go back to the bank robber example, if you catch a robber before he spends the money, should you cut him some slack??
A thief is a thief is a thief.

at 11/6/2008 3:41:15 PM, Big Jeff said:
I can see a billion dollars value - plus a lot more hidden value, and more importantly, calendar time, in revelation of design methods and technology infrastructure.

How much is this worth? What, they can''t brand the guy with an Intel logo, or the fleur-de-lys?

Hmmm... keeping him out of circulation for, well, 10 years seems fair - the technology will be completely outa date by then.

It sounds like Intel personnel wasn''t doing their job in shutting the guy out, but still, there are a lot of investors who get hurt by dishonesty.

(BTW - I don''t favor AMD getting snuffed: Intel needs them to stay sharp and avoid monopoly status.)

at 11/6/2008 3:41:49 PM, SEJ said:
It's disturbing to see from some of the comments that it is acceptable to steal property from Intel and send it to the world to 'improve' mankind. How many people lock their car or lock their houses when they are not present? Is it acceptable to rob your neighbor's home, and hand out his posessions to people that can benefit from them? Why is it that Intel is being made out to be the bad guy, for being successful, and accumalating knowledge? Intel employs tens of thousands and has provided wealth and innovation to millions throughout the world. Intel hired this person in good faith, and trusted this person, and this person betrayed that trust. This person was a thief, and not a very good one, he is the only bad guy here, regardless of the whether the 'value' of the secrets were $1B or $300M. This guy is an unethical idiot, and I have no sympathy for him.

at 11/6/2008 3:48:33 PM, Fair, not Scapegoat said:
It''ll be interesting to see if the real truth ever comes to light. Clearly Intel is trying to make a point of this and so it''s no surprise they''re making a big deal out of it. Convicting someone on what they "could have done" is a dangerous precedent in our legal system. Let''s concentrate on what was actually done and determine the appropriate course of corrective action. Otherwise we''ll create a legal system wherein e.g. any person caught speeding "could have run over a small child", and therefore should be charged with attempted murder.

at 11/6/2008 3:49:11 PM, Bill said:
I have yet to meet a person from the Indian sub-continent who is not a liar. Western-style ethics are completely foreign to these people.

at 11/6/2008 4:06:23 PM, Thief...any way you cut it said:
So, let''s be clear about this...he's been charged, not convicted yet, so calm your horses on that one...this man still has the right of due process. At the same time, Intel has the right to protect their intellectual property. When you leave Intel, you sign a document saying that you have returned all confidential documents; this holds true for most large companies. Whether he downloaded them before or after his 'termination date' is largely immaterial since he clearly had possession of them after he left Intel. That is illegal. Think what you want of Intel, but our IP laws equally protect Intel and AMD.

at 11/6/2008 4:11:08 PM, Joe said:
Bill, do you know an American who never lied? If you are not a pathological liar than your honest answer is "no". We teach our children to lie in certain cases. President Bush jr expanded that custom even more.

at 11/6/2008 4:14:03 PM, Thief...any way you cut it said:
Bill, I am saddened by your post. I am a true-blue American, about as white as they come...raised in predominantly white communities in Ohio and PA. I now work with a lot of minorities. Many of the people that I work with from the Indian sub-continent are outstanding human beings. I've actually experienced significantly more 'liars' from Westerners than I have from the Indian sub-continent. I can only hope that you'll have more positive experiences in the future.

at 11/6/2008 6:20:00 PM, brian said:
Bill, I think your comments pertain more to the Chi-coms than to the Indians. It is China that continuously rips off our technology. They only give IP laws lip service.
Having said that, Indians are not without their bad apples. Sanjay Kumar of Computer Associates comes to mind....

at 11/6/2008 7:15:22 PM, John said:
If there is no damage, then Intel has no case and the civil case should be thrown out. The other case should be treated as theft over $5000 and dealt with. Take a year in the slammer, do his time and then move on.

at 11/6/2008 8:42:36 PM, Mark said:
I think that a lot of Intel's loyalty has declined due to it's current culture of no longer being a great place to work. I think that there are many more people like Pani within the company who are only interested in looking out for themselves and trying to "cash in" on Intel's assets. Especially when competing chip manufacturers would benefit greatly from being able to unlock some of Intel's carefully guarded microprocessor manufacturing techniques and processes. More people seem to be selling out Intel just like Intel is selling out by outsourcing to other countries to manufacture their chips. When Intel really took care of its employees, the level of loyalty was much higher and employees felt more like a part of the organization. Once the breakdown between Management and tech support became evident and obvious, the moral and morale decay and the level of trust is now such that you never know who's sifting trade secrets from within the company.

at 11/6/2008 9:49:44 PM, kevin said:
why is it that every opportunity we get, we bring up the race card?

cmon. its a matter of the law. he broke the law. HIM. not the entire friggin indian race. stop stereotyping.

the comment on china-com deepens the blow. what''s with the ultra-western pride?

u guys suck.

at 11/6/2008 10:15:02 PM, Sooraj, Mysore India said:
information is money. But protecting company property is completely with information security system. If they are not able to block unauthorized access of data, penalizing "only one" person will not make any sense. If you keep 500$ note on your "bed" anyone who see that will pick, creating an oppertunity for theft. securing property is with the owner, must have proper method to do it. Peanalizing one party will not solve this kind of issues in future, so strengthen your information security system.

at 11/7/2008 4:10:30 AM, READER said:
Pani is smart enough to know that he is committing wrong taking out secured material. He has to face up to the consequences.
Like Scapegoat said, Intel should not speculate on what Pani ''could'' have used it for.
The racial slurs, and getting at each other is sad.
Suzanne - I beleive you don''t want your column to be a battle ground

at 11/7/2008 7:40:31 AM, Suzanne Deffree, EDN said:
EDN.com maintains blogs like this as an open community forum for discussion. But that said, READER, Kevin, and the like are right. I'm not posting to encourage slurs, etc. This post is about a person who was indicted for criminal acts and how a semiconductor company is handling that, not about the person's ethnic heritage. I have great respect for this audience and the EE community, and continue to welcome your thoughts. However, such negative comments degrade the amazing contributions this industry makes to society.

at 11/7/2008 8:48:32 AM, TomTom said:
Nicely said, Susan. This guy should go to jail. He did the crime, now do the time.

at 11/7/2008 9:47:42 AM, Truthdude said:
Just another case of lying and stealing from our foreign worker community. Everybody working in this industry has encountered their share of padded, unsubstantiated resume's and then the ensuing exclusion of native workers. Hold on to your wallets as Obama and Pelosi open the visa gates wide open. As Gavi Nesom said, "whether you like or not!"

at 11/7/2008 10:14:32 AM, Casey said:
I would have to say Mark''s comments are right on. There are bad apples in every company regardless of race or ethnic backround. However, I think you can reduce the risk of such cases if employees are well taken care of and feel a part of the corporate team. Loyalty is not dead. This is simply an isolated incident. Pani''s ethnicity is irrelevent. He should pay the penalty for the crime committed. He knew what he was doing was wrong, regardless of what he did with the information.

at 11/7/2008 10:44:04 AM, STDog said:
I don''t buy that the 13 documents are worth $1B.

That said, he''ll plead out, and get 5-10 total, and a small fine (no where near the $750K max).

The 90yrs is the max for all four of the charges, and no one ever get that when there are multiple charges like this.

at 11/8/2008 11:57:15 AM, BillP said:
1) As a native-born white American, it is offensive to turn this into an ethnic issue - and also completely incorrect.

2) The only safe way to protect $1B of IP is through the patent system, not making it "top-secret" within any company. If Intel did not already have pending patent applications (possibly "submarining") on this IP then they are negligent.

3) This issue should be publicized in the mass media to get the maximum benefit of making an example of the criminal penalties for this kind of behavior.

at 11/10/2008 10:58:29 AM, Randy G said:
He deserves at least 10 years in prision. This will serve as a deterrent for others thinking of stealing company secrets.

at 11/10/2008 8:30:02 PM, IPjosh said:
If IP is so valuable why don't tech companies pay employee inventors for it? Where I work the most an inventor can get is about $2.5K; no management bonus (for just doing the job) is that small. This all seems like talking out of both sides of the mouth - it's worthless for creators but beyond measure to the corporation.

at 11/10/2008 10:08:41 PM, Mallickarjuna - India said:
Some thoughts that are running in my head.

1. Any company spending time and money needs to protect its interest.
2. Value of the technology should be accessed by experts.
3. Only necessary personals should have access to top doc''s.
4. The design if so valued should have been patented if its not it’s the company’s mistake or the design have no commercial value.
5. When in "Rome do as the Romans do".
6. The law of the land will hold good, whoever he maybe.
7. If he has downloaded for is personal study is it still a crime?
8. If he was a criminal he would have downloaded earlier it self.
9. If he has done it after joining AMD that maybe AMD has asked for the doc.
10. 90 years is a bit stretched for a crime like this.
11. We carry what we learn/develop from one company to others, does this also break the law of the land? If so many are in stake.
12. If AMD or others have taken the doc they are equally at fault, in fact they are encouraging such practices.
13. If Intel is clean in its practices is something one should look into.
14. Scientist or developers are a rare commodity imprisoning them permanently will hamper development.

at 11/11/2008 3:33:47 PM, Dan-W said:
I wonder if this guy began work using a H1-B visa?

at 11/12/2008 12:06:57 AM, Zoir said:
If 90 years charged to this crime then 45 years should be gone to Intel. Be fair man, everyone know it is not possible.
Also take account that one mpu design takes terabytes of disk space and thousands of files. So, does Pani really took technical info or product brochure. I guess 13 files are related with Intel's future plan. But again any clever one can estimate this. AMD, IBM, SUN they already have such information. No need to make guilty one person.

As a last Pani is guilty but not 90 years, maybe 5-10 years max.

at 11/13/2008 12:06:01 AM, Mallickarjuna - India said:
Sanjay Kumar of Computer Associates is not an Indian for your info.
He emigrated with his family to the US in 1976 to escape civil unrest in his native Sri Lanka.
More info at world wide web. en.wikipedia.org/wiki/Sanjay_Kumar

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