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HTC trio suspected of pilfering design IP

Investigators storm mobe maker's offices after firm sounds alarm

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Senior members of HTC’s design team have been detained by Taiwanese investigators on suspicion of defrauding the under-fire smartphone maker and stealing valuable IP.

HTC raised the alarm with Taiwan’s Bureau of Investigators after the suspects – including VP of product design Thomas Chien, R&D director Wu Chien Hung and design team senior manager Justin Huang – set up their own design company, report Bloomberg and Engadget.

The mobile phone company thinks the three have been stealing trade secrets, after it apparently caught Chien downloading info on the new Sense 6.0 UI before emailing them to contacts outside the company.

If that proves to be true, it would seem that HTC’s design team haven’t grasped the concept of data loss prevention technology.

The three are also suspected of conspiring with a third party design firm to issue false invoices for the One’s chassis design to the tune of NT$10 million (£215,500). They are said to have carried out the work in-house, but then arranged for the external firm to invoice HTC, and then split the cash between themselves.

Chien and Wu have now apparently been taken into custody while Huang and two others questioned were released on bail. Investigators also raided HTC’s offices on Friday night, seizing the suspects’ phones and laptops.

HTC didn't immediately get back to us with a statement, but sent Engadget the following:

The company expects employees to observe and practice the highest levels of integrity and ethics. Protecting the company's proprietary and intellectual properties, privacy and security is a core fundamental responsibility of every employee. The company does not condone any violation. As this matter is currently under investigation by the relevant authorities, we therefore refrain from further comments.

The developments are yet another unwanted distraction as the ailing Taiwanese smartphone maker battles poor financial results and sluggish demand for its handsets.

Shares tumbled to almost an eight year low at the end of July as the firm warned that Q3 may see its first ever operating loss. Profits were down 83 per cent in Q2 2013 compared with the same period in 2012.

The mobe maker has also been struggling to hang on to senior execs this year, with chief product officer Matthew Costello, VP of global comms Jason Gordon, product strategy manager Eric Lin and global retail marketing manager Rebecca Rowland all exiting. ®

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