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HTC’s Designers Interrogated for Fraud and Stealing of Trade Secrets

August 31, 2013 - Written By Milton Pozo-Mazzini
HTC Corporate Espionage

In my previous article, Are Things Getting Worse for HTC?, I had suggested that HTC Corp. may fall into irrelevance due to several factors. First and foremost was the love/hate relationship with Mr. Chou, CEO of HTC. I also pointed out that the HTC One was too little too late as the high-end smartphone market was slowing down and the focus was now on bottom tier smartphones for emerging markets. Then there was the HTC Executive Exodus spurned on by the leadership style of, or lack thereof, Mr. Chou.

High Tech Cheating

The Executive Exodus is what I want to focus on as it turns out that some of those leaving HTC Corp. were banding together to form new companies of their own. One such company is Kazam dedicated to stunning design, robust hardware, and intuitive technology for Europe. But apparently not everyone leaving HTC Corp has such noble ambitions.

Thomas Chien, former Vice President of Product Design, was arrested along with two others for fraudulent expense claims and stealing trade secrets. The others arrested are Justin Huang, Design Team Senior Manager and R&D Director Wu Chien. As part of the design talent behind the HTC One, a flagship phone HTC had placed its hopes on, Thomas Chien and Justin Huang as well as R&D Director Wu Chien Hung were leaving to form their own mobile design firm called Xiaoyu.

High Tech Charges

HTC Co-founder and Chairperson Cher Wang filed the complaints against the three former executives on grounds of corporate espionage and breach of trust. Mr. Chien was caught downloading the yet-unreleased Sense UI 6.0. All three men were suspected of having contact with an unidentified Chinese firm that had plans to purchase the technology.

According to China Times, all three men were also accused of illegally claiming design fees of more than NT$10 Million ($330,000 USD) from HTC with falsified vouchers. If convicted of the charges, the three men will face a maximum 10-year prison term for each charge.

According to research firm IDC, HTC held a 4.6 percent share of the global smartphone market in 2012, a sharp decline from 8.8 percent a year earlier. Samsung held a 30.3 percent stake while Apple had 19.1 percent.