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A Chinese court has convicted three Chinese citizens, one a Foxconn employee, for trade secret theft.

Local companies released iPad 2 cases before the device had even been unveiled, and a Foxconn staffer was handed a jail sentence for handing over design secrets.

It's unusual for a Chinese court to prosecute locals over IP issues when a foreign business is the victim. It's even more unusual for these to relate to design.

The largest Chinese companies have regularly been accused of IP theft relating to technology. Huawei was been sued by Cisco and more recently by Motorola, while Ericsson has escalated its legal dispute with ZTE.

But more recently, Chinese companies seem to have begun to appreciate the competitive value of IP protection - and the damage from being ripped off. Huawei has been going after ZTE with a flurry of lawsuits, with ZTE counter-suing Huawei.

Also jailed and fined were the head of a Chinese electronics company, who was found guilty of inducement, and an intermediary.

"While this case may be atypical for now, at least the prosecutors accepted it, and more significantly the Chinese press reported it," notes Michael Lin, a lawyer, at the IPKat Blog.

"As everything reported by the Chinese press inherently possesses the government's stamp of approval, this may indicate a growing intolerance of such activites." ®

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