The case is significant because to win, prosecutors will need to prove that the defendants knew their alleged theft would benefit the government of China, said Todd Sullivan, partner with Womble Carlyle Sandridge & Rice, PLLC. That is different from most trade-secret theft cases, which involve prosecution under a separate provision of the EEA that criminalizes domestic espionage, he said.

"The government has to prove that a foreign government, foreign instrumentality, or foreign agent was involved," in the theft in order to win a conviction, Sullivan said. It is unclear what kind of evidence the government has in its possession to back-up its allegations in this case, he said. But based on the fact that prosecutors are pressing ahead with the trial, they appear to believe they have the evidence linking the thefts to China, he said.

"I am assuming the government has e-mail communications, or telephone conversations, between these employees and agents of the Chinese government," Sullivan said. "Or maybe they have payments going from a Chinese institutions to the engineers."

Court documents filed in connection with the case allege that between May 2002 and July 2003, Lee and Ge illegally downloaded and installed on their systems components of TSMC's software that NLM was using to develop microprocessor products.

Prosecutors alleged that the pair planned on using the misappropriated software to develop and market microprocessors in China and elsewhere via a company called Sico Microsystems Inc, which Lee had established in 2002.