Boston Scientific Engineer to Be Sentenced Today for Trade Secret Theft
Published: Dec 31, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Aaron Khieu, a former engineer with Boston Scientific Corp. is expected to be sentenced today for the theft of intellectual property and trade secrets.
In April, Khieu pleaded guilty in federal court to one felony count of stealing a trade secret. A federal grand jury had indicted him in September 2014 of 14 counts of wire fraud and theft of trade secrets.
“He has taken full responsibility for his actions and is really remorseful for his action,” said Robert Sicoli, Khieu’s attorney, in April. “That’s why he pled guilty.”
Khieu, who was an engineer involved in designing heart catheters, stole documents from Boston Scientific by downloading more than 100 files about balloon catheters. The files, which were often PDFs, included technical prints, manufacturing techniques and product composition details. The thefts occurred in October 2012, and again in June 2013. Khieu was hired by Boston Scientific in 2002.
Khieu apparently also traveled to Vietnam and made contact with a company in Ho Chi Minh City to consult on selling medical devices. He allegedly had plans to create a manufacturing facility to build advanced balloon catheters dubbed Snowcat, which were based on the stolen Mustang Plus design. Khieu is accused of planning to sell Snowcat in the U.S. and Vietnam.
The engineer also met with potential investors in Minnetonka and contacted potential investors about a plan for a company called Snowflake Medical.
“The defendant, in a nutshell, stole U.S.-developed high technology, and had every intention of taking it to a foreign country,” prosecutors wrote in a sentencing memo. “The government emphatically believes that a sentence would be wholly inappropriate if it did not include as one of its components a significant period of incarceration.”
Khieu and his defense attorney are arguing that although he admits to stealing files, his business plan for Snowflake Medical was “a pipe dream.” Nothing was ever produced and nothing came of his plans. “There is simply no evidence that Mr. Khieu intended to inflict a loss in the amount of $4.3 million on Boston Scientific,” the sentencing memo states.
The $4.3 million figure comes from the amount of money Boston Scientific invested in designing the device. One of the key factors in the case is whether the designs for the Mustang Plus had real value. This is a major legal concept in Minnesota, where the case is being adjudicated.
“This is a key question that comes up in every trade secret case,” Minneapolis IP attorney Ron Schutz, who is not involved in the case, told The Star Tribune. “It’s going to be a highly fact-intensive inquiry, which is the general nature of fighting over trade secrets to begin with.”
Sentencing will apparently depend a great deal on what the judge considers the amount of the intended loss was. U.S. District Judge Patrick Schiltz may also depart from sentencing guidelines.
Potentially complicating the sentencing is that the case appears to be based on the amount the company invested in research, when, in fact, the company still has the information, and no competing product was ever manufactured. The judge can, however, take into consideration how much damage Khieu planned to cause Boston Scientific.
“If [Khieu] in his ‘pipe dream’ world were to intend to make millions and millions of dollars on a product where many of the sales would otherwise have gone to Boston Scientific,” Minneapolis IP attorney Maria Butler told The Star Tribune, “then I think the government gets to consider that as the intended loss.”
Khieu, 44, could be sentenced for five years or more in prison. He is married with three daughters.