Overview

H&A conducted a targeted intellectual property (IP) investigation for a private Chinese fashion brand (the Client) concerned about the risk of IP leaks to a key competitor. The Client discovered that their design manager (the Subject) was maintaining improper interactions with the competitor’s owner, despite ongoing legal proceedings between the two companies. The risk of IP theft and unauthorised information sharing posed a serious threat to the Client’s competitive advantage.

Challenges

The Client faced several risks:

• Potential leak of proprietary designs and critical manufacturing processes.
• Loss of competitive advantage in a highly competitive market.
• Internal trust issues and possible employee misconduct.

Given the sensitive nature of the case, H&A’s investigation had to be discreet and evidence-driven to avoid alerting the Subject before concrete evidence was gathered.

Our Approach

H&A launched a multi-phased investigation, combining IT forensics, user behaviour analysis, and confrontational interviews to uncover the full extent of the misconduct.

1. IT Forensics Review

We conducted a detailed IT forensic analysis of the Subject’s devices and internal communications, uncovering critical evidence:

• The Subject had unauthorised access to manufacturing information she should not have been able to view.
• Evidence of off-the-book use of USB devices and online storage platforms, suggesting untracked file transfers.
• An invitation email from the key competitor’s owner, sent directly to the Subject, further substantiating the inappropriate relationship.

Through detailed analysis of the Subject’s file access patterns, we identified:

• Suspicious movements of critical IPs on sensitive dates, coinciding with interactions between the Subject and the competitor.
• Batch-transmitted documents sent via USB drives and personal email accounts, bypassing the Client’s security protocols.

3. Confrontational Interviews

With concrete evidence in hand, H&A conducted confrontational interviews with:

• The Subject
• Two other employees involved in suspicious email communications

The interviews revealed further details of the Subject’s involvement with the competitor and confirmed the unauthorised transfer of sensitive information.

Outcome

The investigation provided the Client’s management with clear evidence of misconduct, enabling them to take swift action:

• The Subject was immediately terminated.
• Legal proceedings against the key competitor were strengthened with new evidence of IP theft.
• The Client implemented stronger IT security protocols to prevent future IP risks, including USB access restrictions and enhanced monitoring of file transfers.

Impact

• The Client protected their critical IP assets, mitigating the risk of further leaks.
• The Client’s legal case against the competitor was strengthened, increasing the chances of a favourable outcome.
• Internal governance measures were improved to prevent future incidents of employee misconduct and insider threats.

This case highlights the importance of risk intelligence and IT forensics in identifying internal threats and safeguarding valuable intellectual property in high-risk markets like China.