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Trade Secret/Economic Espionage Cases - U.S. v. Morch (N.D. Cal.)

Department of Justice


Trade Secret/Economic Espionage Cases

    Press Release
    For Immediate Release
    November 22, 2000

 San Francisco Man Arrested on Charges of Trade Secrets Theft

(November 21, 2000)

The United States Attorney's Office for the Northern District of California announced that Peter Morch, a resident of San Francisco and a citizen of Canada and Denmark, was arrested yesterday pursuant to a criminal complaint charging him with theft of trade secrets in violation of Title 18, United States Code, Section 1832.

According to an affidavit filed in support of the criminal complaint, Mr. Morch recently resigned from his position as a software engineer at Cisco Systems in Petaluma, California.  While at Cisco, Mr. Morch was a team leader for a research and development project pertaining to voice-over and optical networking.  The day before his final date of employment at Cisco. Mr. Morch is alleged to have burned onto compact discs ("CDs") numerous proprietary documents, including but not limited to Cisco project ideas, general descriptions, requirements, specifications, limitations of design, and procedures to overcome the design difficulties for a voice-over and optical networking software product.  Shortly after, Mr. Morch started working at Calix Networks, a potential competitor with Cisco.

The maximum statutory penalty for each count in violation of Title 18, United States Code, Section 1832 is 10 years imprisonment, a fine of $250,000 plus restitution.  However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court.  An criminal complaint simply contains allegations against an individual and, as with all defendants, Mr. Morch must be presumed innocent unless and until convicted.

Mr. Morch made his initial appearance in federal court in San Francisco before United States Magistrate Judge Elizabeth LaPorte today.  The defendant's next scheduled appearance is this afternoon at 2:00 pm for further detention hearing before Judge LaPorte.

The prosecution is the result of an investigation by special agents of the Federal Bureau of Investigation.  Joseph E.  Sullivan and Jonathan Howden, from the Computer Hacking and Intellectual Property Unit of the United States Attorney's Office, are the Assistant U.S. Attorneys who are prosecuting the case.

A copy of this press release and key court documents filed in the case may also be found on the U.S. Attorney's Office's website at http://www.usdoj.gov/usao/can/.

All press inquiries to the U.S. Attorney's Office should be directed to spokesperson Assistant U.S. Attorney Matthew J. Jacobs at (415)436-7181.


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