Federal prosecutors have charged two Chinese companies and four individuals with conspiring to unlawfully acquire trade secrets from Philips Medical Systems, according to an indictment unsealed in Chicago.

The case centers on the alleged theft of proprietary CT X-ray tube technology from the former Philips (Dunlee) facility in Aurora, Illinois. Prosecutors say Kunshan GuoLi Electronic Technology Co. Ltd., a China-based company, and its vice president, Du Xiaoqin, helped establish a competing X-ray tube development firm in the same town.

In 2017, the company allegedly recruited three engineers from Philips — Chih-Yee Jen, Fince Tendian, and Vladimir Nevtonenko — who then used stolen trade secrets to develop X-ray tubes for Kunshan GuoLi and its related firm, Kunshan Yiyuan Medical Technology Co. Ltd. Prosecutors say these products were later sold in China, leveraging Philips’ technology without authorization.

The indictment accuses Jen of copying proprietary information from Philips' internal databases before leaving the company. Prosecutors say he shared this data with his codefendants, who used it in their work at the rival firm. Jen faces an additional charge of possession or attempted possession of a stolen trade secret.

"Philips filed suit against GuoLi and a number of related entities, as well as individuals, related to the theft of our intellectual property in relation to our X-ray tube technology," a Philips spokesperson told HCB News. "The indictments support our taking decisive action to protect our customers and their patients who rely on safe and effective healthcare technologies, and to defend the company’s intellectual property rights."

The Aurora tube manufacturing facility was acquired by Philips in 2001 as part of the purchase of X-ray component manufacturer, Dunlee.

In 2017, citing a "significant decline" in the replacement parts market, Philips made plans to move tube manufacturing to Hamburg, Germany. In 2018, the facility was sold to Chronos Imaging LLC, which continues to produce third-party replacement CT tubes for Philips through the Dunlee brand on a contract manufacturing basis, in addition to its own products.

In addition to trade secret theft, the indictment outlines a conspiracy to conceal the unlawful activity. It alleges that Jen, Tendian, and Nevtonenko hid their plans to join the rival company and continued possessing stolen trade secrets years after leaving Philips.

The U.S. government is seeking forfeiture of any proceeds generated from the alleged scheme. If convicted, the defendants could face significant financial penalties and potential prison sentences under the Economic Espionage Act.

The indictment follows a civil lawsuit that Philips filed in 2019, which also accused the defendants of trade secret misappropriation. The federal charges, however, carry the weight of criminal prosecution, potentially leading to more severe consequences.

Jen, Tendian, and Nevtonenko pleaded not guilty in federal court. Du, who resides in China, has an outstanding arrest warrant. The companies have not yet been arraigned.

"We would like to express our appreciation to the U.S. District Attorney for the Northern District of Illinois for their strong cooperation and support in this matter," said the Philips spokesperson.

The case was announced by Morris Pasqual, acting U.S. attorney for the Northern District of Illinois, and Douglas S. DePodesta, special agent-in-charge of the FBI’s Chicago office.