Did a billion-dollar Chinese company with close ties to the Chinese government steal valuable intellectual property from Duke?
That’s the story told by ProPublica Journalist Daniel Golden in the first chapter of his recently-released book, “Spy Schools: How the CIA, FBI, and Foreign Intelligence Secretly Exploit American Universities.”
Today, the Kuang-Chi conglomerate’s affiliates—Kuang-Chi Science Limited and Kuang-Chi Technologies Company Limited—have $2.95 and $6.93 billion valuations. The conglomerate uses metamaterials—materials that demonstrate properties not found in nature—to improve aviation, wireless internet and mobile payment solutions, among other uses of the technology. Per Kuang-Chi Science’s webpage, the company works to “provide a series of disruptive space services and build a global disruptive space technology alliance."
But prior to Kuang-Chi’s inception in 2010, its founder Ruopeng Liu, M.S. '08 and Ph.D. '09, worked in the lab of renowned metamaterials researcher David Smith, James B. Duke professor of electrical and computer engineering. Smith did not respond to questions in time for publication, and Liu did not respond to a request for a comment sent to Kuang-Chi.
Liu allegedly passed data from the lab to Chinese researchers, data which Golden wrote could have helped the United States develop military technology.
The FBI has never charged Liu with a crime, but it has taken an interest. The FBI's National Security Higher Education Advisory Board discussed Liu’s exploits at an October 2012 session.
“Without [Smith’s] knowledge, a Chinese national targeted his lab and created a mirror institute in China,” per an agenda from the meeting Golden obtained via a public records request. “The episode cost Duke significantly in licensing, patents and royalties and kept Smith from being the first to publish groundbreaking research.”
Smith joined Duke’s faculty in 2004.
In 2006, his Duke lab created a prototype invisibility cloak. Although the cloak could not conceal objects from the human eye, it could from microwaves—meaning potential applications for cell phones and antennas.
Also in 2006, Ruopeng Liu joined Smith’s lab. In the book, Smith described him as a promising student and full of enthusiasm. He soon stepped up as a leader of sorts in the lab, Golden wrote.
Eventually, Liu made what would seem to be an innocent suggestion—the lab should collaborate with one in China, run by Tie Jun Cui, Cheung-Kong professor at Southeast University in Nanjing, China. Smith—wanting to share the fruits of collaboration—agreed. Liu suggested Cui’s team visit the lab, and Smith agreed once Liu said China would foot the bill.
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Cui’s team took photos of the lab, and could recreate the lab in China, per information Golden got from the FBI and another student in Smith’s lab.
Throughout the chapter, there are multiple signs of suspicious behavior on Liu’s part. In one example, Golden writes that a postdoctoral fellow in the lab gave Liu data, only to see Cui present the results as his own. Liu was also co-authoring papers with Cui’s research team. Smith instructed Liu to stop—thinking at first it was an honest mistake—but the publications kept coming.
Although the book indicated that Smith might have looked the other way due to the importance of collaboration, Smith and Liu’s relationship eventually soured.
In 2008, Liu invited the team to visit China—on China’s dime. But Smith almost didn’t take part, after a heated argument with Liu at the airport before their flight. Liu kept trying to press Smith into giving Cui’s group technical advice, which was not what Smith thought he had signed up for.
As Golden tells it, this was not an eager researcher looking to foster collaboration back home. Golden wrote that Liu convinced Smith to join the Chinese Government’s Project 111, which was designed to recruit overseas scientists to work on Chinese campuses.
Golden suggested that Smith was not aware of the commitment Liu was trying to make him take on.
Liu kept working at Smith’s lab, but the tensions between him and Smith remained. In 2008, Liu authored a paper describing a newer invisibility cloak covering a wider range of wave frequencies. But when Smith asked for further details about the technique by which Liu came up with the cloak's design, Liu clammed up.
Smith asked another graduate student—Nathan Kundtz, M.S. '08, Ph.D. '09 and now CEO of metamaterials-based antenna company Kymeta Corporation—to figure out how Liu had done it. When Kundtz succeeded, Liu was upset, and eventually other researchers were telling Smith that Kundtz was stealing their ideas.
“I didn’t know anything about this [at the time],” Kundtz told The Chronicle. “It’s something David told me years later. What he said was that Ruopeng had campaigned to have me kicked out of the group and that David collected people and asked what was going on. And they all said I’m stealing work, so David asked whose work. And they all said not mine, one by one.”
In January 2009, Liu published a paper detailing this new cloak, with Smith and Cui as co-authors. According to the chapter, China paid more than $10,000 for the byline, and Smith was flying high.
That is, until the lab’s funders got word of the Chinese lab’s involvement. Smith was being funded by the Air Force Office of Scientific Research, and Cui by the National Basic Science Foundation of China and Project 111.
Not surprisingly, the Pentagon was not pleased that research it had funded made its way to China. Smith immediately ended collaboration with Cui’s team, and told Liu to cease contact with Cui's team.
But the suspicious behavior did not stop, and tensions between Smith and Liu came to a head.
Smith caught Liu ignoring his responsibilities in his lab and storing the details of his experiments on a website hosted by a Chinese server. The book suggests this website represented the commercial venture Liu hoped to create.
“Kuang-Chi doesn’t happen overnight,” Kundtz said, acknowledging he learned about Liu’s suspicious behavior only after leaving Duke.
To make matters worse, Liu failed to tell Smith about a dozen papers he had written with Cui, despite Smith’s instructions and even though Smith was listed as a co-author on several.
In April, Smith took Liu’s key from the lab. And yet, despite all the concerns of seeming academic dishonesty, Liu received his doctorate in November 2009. Golden suggests the ongoing negotiations surrounding Duke Kunshan University could have been a reason for Duke to look the other way.
Although he did not comment on Liu’s particular case, Michael Schoenfeld, vice president for public affairs and government relations, insisted there was no connection.
“I can say that there was absolutely no connection between the awarding of any degrees and the deliberations over the proposal for Duke Kunshan University,” he wrote in an email.
Golden asked a fellow journalist to interview Liu about the incidents involving him, and Liu was cagey with his responses. He emphasized that Smith’s lab was not classified and that all the data was transparent.
Flash forward to Liu’s post-Duke career, and Kuang-Chi—founded by Liu and three other Duke alums—has Chinese governmental support. The Shenzhen and Guangdong provincial governments awarded the company about $14 million, and Liu gave General Secretary Xi Jinping, the highest-ranking leader of the Chinese government, a personal tour of the firm in 2012.
“At the very least it appears to be a case of individual economic espionage by a foreigner,” Golden told The Chronicle. “But there are connections between him and a foreign government that should raise scrutiny.”
Can Duke protect its intellectual property?
Golden also told The Chronicle that he has seen universities struggle with the protection of intellectual property during the research for his book. This is especially the case in an era of globalization, he said, when universities want foreign campuses for both financial reasons and to further academic research.
But going abroad brings the challenges with foreign espionage he documents in his book.
“When you set up a branch campus in another country, that country’s intelligence service has a home-field advantage, and they can find ways to monitor activity on that campus and recruit students,” he said.
Golden identified several flaws in universities’ intellectual property procedures that he said could help them confront situations like the Liu case if corrected. He emphasized that collaboration agreements prior to research make it much harder for research to leak out of the lab.
Robin Rasor, executive director of the Office of Licensing and Ventures, agreed such agreements can be valuable.
“It’s kind of like when you get married. You don’t want to have a prenup but sometimes it makes sense to have a prenup,” she said. “So, we do collaboration agreements when we have faculty collaborating with another university, and often those agreements do provide for what happens if there are inventions.”
She added that OLV needs to do a better job of educating faculty on the value of these agreements. But OLV does not require such agreements, because they would impinge on the freedom typically desired in academic circles.
Regarding the Liu incident, Rasor said there were no major subsequent policy changes, and she did not think any major policy change would have necessarily remedied the situation. If someone has ill intent, she said, making them sign a new policy might not change much.
The research sponsor also has a say in who works on a project. If they impose export control conditions on a project, then foreign nationals need special export licenses to participate. There is no indication such a restriction was put in place for Smith’s lab at the time. Golden indicated this research could be called “pre-classified” research—research that could eventually become so important that foreign nationals lose research privileges.
In August, the federal government launched an official investigation into China’s intellectual property practices and intellectual property theft. Haiyan Gao, Henry Newson professor of physics and vice chancellor for academic affairs of DKU, noted the government can place restrictions on research at DKU.
“U.S. federally-funded research projects are only allowed to operate at DKU if the operation of those is permitted by the funding agencies and is set up through proper subcontracts or sub-awards,” she wrote in email. “When a [principal investigator] prepares a proposal and submits to a U.S. federal funding agency, he or she can always include DKU as a collaborating sub-awardee in his or her proposal and articulates the roles and responsibilities of the co-PI(s) at DKU. The US funding agency reviews the proposal and evaluates whether the proposal is feasible and appropriate by including DKU’s co-PI.”
Gao also noted that researchers at DKU will soon have to sign a patent agreement form before beginning research. She wrote that the DKU Board of Trustees recently approved the policy, and that a patent agreement form will be presented to them in November. If approved, each faculty will sign it with the University.
As for preventing future incidents, Rasor said education was the key. OLV works with the Pratt School of Engineering and the Innovation and Entrepreneurship initiative to host weekend sessions on intellectual property, and the office hosts workshops for departments and classes upon request.
“A lot has changed in 10 years, and I would say the awareness of faculty and graduate students is wholly different,” she said. “I’ve been in this business for 30 years, and what they know now is much different than what they knew 10 years ago.”