Measured in millimetres, the tiny device was designed to allow drones, missiles and rockets to hit targets without satellite guidance. An advanced version was being developed secretly for the United States military by a small firm and L-3 Communications, a major defence contractor.
On Monday, Liu Sixing, a Chinese citizen who worked at L-3's space and navigation division, was given a jail term of five years and 10 months by a US federal court for taking thousands of files about the device, called a disk resonator gyroscope, and other defence systems to China in violation of a US arms embargo.
The case illustrates what the FBI calls a growing "insider threat" that has not drawn as much attention as Chinese cyber operations. But US authorities warn that this type of espionage can be just as damaging to national security and US business.
"The reason this technology is on the State Department munitions list, and controlled … is it can navigate, control and position missiles, aircraft, drones, bombs, lasers and targets very accurately," said David Smukowski, president of Sensors in Motion, the small firm developing the technology with L-3. "While it saves lives, it can also be very strategic. It is rocket science."
In the past four years, nearly 100 individual or corporate defendants have been charged by the US Justice Department with stealing trade secrets or classified information for Chinese entities or exporting military or dual-use technology to China, according to court records.
"America is a global leader in the development of military technologies and, as such, it has become a leading target for the theft and illicit transfer of such technologies," said John Carlin, acting assistant attorney general for national security. "These schemes represent a threat to our national security. The intelligence community has assessed China to be among the most aggressive collectors of sensitive US information and technologies."
Earlier this month, a Chinese citizen who worked as a contractor at Nasa's Langley Research Centre was arrested at Dulles Airport in the state of Virginia and charged with making false statements to federal agents about the laptop and phone memory card he was carrying. According to an FBI affidavit, the suspect, Bo Jiang, 31, had taken a Nasa laptop that contained sensitive information on a previous trip to China.
After the arrest, Charles Bolden, the Nasa administrator, told a House of Representatives committee that he was limiting access to Nasa for the citizens of several countries, including China, pending a full security review.
In a classic espionage case, a 59-year-old former army defence contractor in Hawaii was charged this month with passing classified information to his 27-year-old Chinese lover whom he first met at a military conference.
Frank Figliuzzi, the former head of the FBI's counterintelligence division, told Congress last year that perhaps the most important measure against the theft of proprietary information "is identifying and taking defensive measures against employees".
Liu was part of a team of L-3 engineers testing the technology created by Sensors in Motion, a pioneer in gyroscope-based navigation as well as guidance systems.
Liu made trips to China in 2009 and 2010, and each time he made several presentations on the technology he was working on without his firm's permission.
Before his second trip, Liu told his supervisor he was going on vacation to Chicago, but instead he spent more than two weeks in China, speaking at a technology conference organised by Beijing and Chinese universities, prosecutors said.
Liu was stopped on his return from China in November 2010 and eventually arrested in March 2011. After a jury trial, Liu was convicted last September of violating the Arms Export Control Act and possessing and transporting stolen trade secrets.
In court last week, Liu, a 50-year-old father of three, told the judge that he did not intend to harm the US. He said he had a message for his children: "Believe me, Daddy didn't do anything."