Zhiqiang "Michael" Zhang was arrested Tuesday, on charges that he stole trade secrets from Sirf Technology, a San Jose, California, maker of Global Positioning System chipsets, used by wireless location-aware programs in devices such as mobile phones and automobile navigation systems. , Zhang had been a director of software development before resigning from Sirf in May 2009. He had been with the company for seven years.

According to prosecutors, Zhang then set up a company called Anywhere Logic "in order to develop and sell location-based services utilizing trade secrets stolen from Sirf."

Zhang allegedly hired two Sirf engineers, Xiaodong Liang and Yanmin Li away from Sirf to work at Anywhere Logic. They have also been charged in the case, but are now living in China.

Zhang was indicted by a grand jury on Nov. 10, but the indictment was sealed until he was arrested. He could face a 10 year sentence if convicted of the charges.

He was released on a US$500,000 bond after making his first court appearance at the U.S. District Court for the Northern District of California in San Jose, Tuesday.