Former Genentech scientist receives 6 month prison sentence for trade secret theft

Via FiercePharma, the end of the Genentech trade secrets saga: 

After pleading guilty to the crime, it's time to do the time.

A year after a former Genentech staffer and her husband pleaded guilty to stealing trade secrets from the drugmaker, the two have received six-month prison sentences, plus fines of more than $10,000 each.  

In the years-long case, Xanthe Lam, a former principal scientist for Genentech, and her husband Allen Lam last summer pleaded guilty to conspiracy to commit theft of trade secrets, plus multiple counts of conspiracy to commit computer fraud and abuse, plus other charges, according to documents from the United States District Court in the Northern District of California.

The two must surrender to begin serving their sentence no later than April 10, 2023, the documents show. After release, the defendants will be on supervised release for three years.

In the high-profile case, government prosecutors said the couple stole confidential intellectual property related to Genetech’s top-sellers Rituxan, Herceptin, and Avastin, as well as cystic fibrosis inhalation Pulmozyme. The two then passed the secret info to Taiwanese firm JHL Biotech (now Eden Biologics), to aid in its development of copycats, the suit said.

6 months in federal prison! That should be sufficient to deter other would-be IP thieves, I would think?  

Chemist sentenced to 14 years in prison for trade secret theft

More on the Shannon You case (from a Department of Justice press release): 

Chemist Sentenced for Stealing Trade Secrets, Economic Espionage and Wire Fraud

A federal judge in Greeneville, Tennessee, sentenced a Michigan woman today to 168 months, the equivalent of 14 years, in prison for a scheme to steal trade secrets, engage in economic espionage and commit fraud. The defendant was also ordered to serve three years of supervised release and pay a $200,000 fine.

In April 2021, following a 13-day jury trial, Xiaorong You, aka Shannon You, 59, of Lansing, Michigan, was convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, economic espionage and wire fraud.

“As the evidence at trial showed, the defendant stole valuable trade secrets and intended to use them to benefit not only a foreign company, but also the government of China,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s sentence reflects the seriousness of this offense, as well as the Department of Justice’s commitment to protect our nation’s security by investigating and prosecuting those who steal U.S. companies’ intellectual property.”

As someone who has seen and helped sign a great number of NDAs, I've rarely contemplated what I could do with the information that was to be protected, other than my job. I imagine that if I thought about it, I could come up with a case or two where I might have thought "I could buy some stock and make money from this"*. I simply cannot imagine a case where I would have thought "I'm going to take this information, give it to my own company and get investors." 

Here's hoping this case is the last one, but it won't be, sigh. 

*As a rule, I don't buy individual stock. 

Trade secret theft results in 12 month sentence

Via Endpoints News, this update on the JHL case: 

The founders of the biosimilar developer who pleaded guilty to stealing trade secrets from Genentech will be imprisoned for a year and one day.

Racho Jordanov and Rose Lin were the CEO and COO of JHL Biotech, respectively, when they hired former or current Genentech employees and got confidential information from them to speed up the development of biosimilars to Genentech’s blockbuster cancer drugs. That worked well for them: According to the plea agreements, the scheme helped JHL appeal to investors, ultimately defrauding them of $101 million.

Both have been sentenced to a prison term of 12 months and one day, to be followed by 36 months of supervised release — including nine months in home confinement for Jordanov.

Their sentencing caps a saga that dates back to 2011. From before JHL was officially founded in 2012 until 2019, Jordanov brought multiple ex-Genentech staffers to his Taiwanese startup, court documents show.

It would be interesting to know how often folks who do this get time in the federal pen. I presume that this is the Department of Justice trying to make a point, but we'll see what kind of commentary results from this sentencing.  

Former Pfizer chemists sued for IP theft

Via Chemical and Engineering News, this story (article by Michael McCoy):  

Pfizer has filed a lawsuit against two former researchers, claiming they stole the pharmaceutical giant’s trade secrets and other confidential information before leaving the company, then used the information to set up their own competing firm.

The researchers, both PhD chemists, are Xiayang Qiu and Min Zhong. Both worked in drug discovery and development for Pfizer or predecessor companies for more than 20 years before resigning from Pfizer in June 2018.

According to the complaint, filed in Connecticut federal court, the two chemists were dissatisfied with their prospects at Pfizer and began scheming in late 2017 to leave the company and start their own firm. In the early months of 2018, the complaint says, they began amassing documents about Pfizer drug discovery programs, including compounds in development and other company secrets.

With other unnamed defendants, they formed their own company, Regor Therapeutics. They also formed a sister company, QILU Regor Therapeutics, with funding provided by the Chinese drug company Qilu Pharmaceutical.

In an email, a Regor media contact, Lauren Xuan, says the company is aware of the Pfizer suit. “We believe that the lawsuit is entirely meritless and will defend ourselves vigorously,” she writes...

...Pfizer’s complaint says both Qiu and Zhong had been working in different capacities on small-molecule GLP-1 receptor agonist technology when they left the company. “Zhong and Qiu could have continued to build on this important, life-saving work at Pfizer for years to come,” the complaint says, “but they made a different choice: to take Pfizer’s trade secrets and confidential information unlawfully to launch a competing company.”

Among the documents they took, the complaint alleges, are documents describing the co-crystal structure for a Pfizer small molecule interacting with the GLP-1 receptor, a trade secret that Pfizer says it spent millions of dollars to develop. “A competitor in possession of that information could, among other things, design and screen for active GLP-1 receptor agonist compounds on an expedited basis,” the complaint says.

From Fierce Biotech, this detail: 

The complaint said a confidential document, stripped of Pfizer confidentiality marks, was uploaded to a personal account two months before Zhong and Qiu left. They later used this information in a new presentation “about a revolutionary new diabetes and obesity drug” that Pfizer said detailed confidential information from its GLP-1 program.

That seems like not a great set of facts for the Regor team - will be interesting to see what happens with this case. 

Pfizer and ex-employee reach settlement agreement in documents case

Via FiercePharma, the ongoing sage of a former Pfizer employee who grabbed a bunch of documents on the way out the door: 

A now-former Pfizer employee is playing nice after the drugmaker sued her in November alleging the 15-year veteran uploaded more than 12,000 sensitive files—including documents on the company's wildly successful COVID-19 vaccine—to personal devices and a Google Drive account. 

The defendant, Chun Xiao Li, agreed to let Pfizer's lawyers search her personal emails, Google drive accounts and all other personal computing devices or accounts that could contain confidential information or trade secrets by Dec. 6, court documents filed Monday show. 

Pfizer aims to complete its search by Dec. 29, at which point it will return Li's devices and accounts. By that same day, Li must send Pfizer a sworn declaration that she's cooperated with the investigation to the best of her ability and that she no longer possesses any proprietary information or trade secrets. Li also must swear that she's offered up all accounts and devices that could have been used to store or transfer the company's information, as well as the identities of the people, if any, who might have received that info.  

By January 5, the parties will let the court know whether any additional action needs to be taken, the filing says.

Pfizer's lawsuit, filed in San Diego federal court late last month, focuses on the company's BioNTech-partnered COVID-19 vaccine, Comirnaty, as well as two monoclonal antibodies for cancer. The suit accuses Li of misappropriation of trade secrets, breach of contract and more. 

One of the interesting things to think about is What Pfizer Actually Can Get from Ms. Li. I don't imagine that she has very much money that Pfizer could reasonably receive from her, and I imagine that her future employer has plenty of plausible deniability in the case that they actually did ask her (I can't imagine that they did) to provide Pfizer documents. 

I also imagine that Pfizer also filed this lawsuit to point out to all of its employees that taking maps off the boat isn't something that you did unless you wanted to spend time in federal court. 

Taiwanese biotech CEO pleads guilty to theft of Genentech trade secrets

Via this week's Chemical and Engineering News, this story by Craig Bettenhausen:

The former CEO and chief operating officer of the Taiwanese biotech firm Eden Biologics—which changed its name from JHL Biotech in February—have been convicted in the US of stealing trade secrets from Genentech. The executives, Racho Ivanov Jordanov and Rose Lin, join staffers Xanthe Lam and Allen Lam, who were convicted on related charges in July. According to the indictments, the four worked together starting in 2009 to steal manufacturing protocols and other proprietary information from Genentech about its drugs Avastin, Herceptin, Pulmozyme, and Rituxan. Xanthe Lam worked at Genentech from 1986 to 2017.

The Department of Justice press release is pretty detailed as to what exactly happened: 

According to the plea agreement, Jordanov hired former Genentech employees to work at JHL Biotech, several of whom he learned surreptitiously brought, without authorization, confidential and proprietary documents with them from Genentech to JHL Biotech.  

The company used only some of the stolen documents, but Jordanov tolerated this practice by the employees of JHL Biotech and made no effort to discourage its employees from using the documents or information they brought with them.  The employees Jordanov hired provided the Genentech documents and information to JHL Biotech, which, at times, allowed the company to cheat, cut corners, solve problems, provide examples, avoid further experimentation, eliminate costs, lend scientific assurance, and otherwise help JHL Biotech start-up, develop, and operate its business secretly using the intellectual property and scientific know-how taken from Genentech.  

Jordanov admitted that he suspected that some or all the stolen information was brought to JHL Biotech in violation of relevant Genentech non-disclosure agreements and employment contracts, but he made no effort to verify whether that was true.

I've thought about this stuff before. Makes you wonder if companies have thought about ways that their documents leave the company, and how to track them... 

C&EN coverage of the Xiaorong You conviction

From C&EN's Craig Bettenhausen, coverage of the Xiaorong You case:  

Xiaorong (Shannon) You, formerly a senior R&D chemist at Coca-Cola and Eastman Chemical, was convicted last week in Greeneville, Tennessee, of stealing trade secrets related to bisphenol A (BPA)–free beverage can liners. Prosecutors say You took intellectual property valued at $120 million from Coca-Cola and seven chemical companies, intending to give it to a Chinese polymer firm in exchange for an ownership stake and cash payments.

You, 59, was a principal engineer for global research at Coca-Cola from December 2012 through August 2017, when Coca-Cola fired her. She went to work for Eastman the following month. Eastman fired her in June 2018 and recovered a hard drive at her home containing trade secrets from Eastman, Coca-Cola, AkzoNobel, BASF, Dow, PPG Industries, Toyochem, and Sherwin-Williams.

During You’s employment at Coca-Cola, the beverage maker was testing BPA-free can liners from several chemical and coatings companies. Some were epoxies made without BPA, like Sherwin-Williams’s valPure V70, which uses tetramethyl bisphenol F. Others were based on polyolefins and other types of plastic.

Because she was deemed a flight risk, she's been in prison since February 14, 2019. That's a long time to be in prison, and it seems likely she'll be spending even more time. 

Former Eastman Chemist Convicted of Conspiracy to Commit Trade Secret Theft

From the Department of Justice on Thursday, this press release: 

A federal jury in Greeneville, Tennessee, convicted a U.S. citizen today of conspiracy to steal trade secrets, economic espionage and wire fraud.

Following a twelve-day trial, Dr. Xiaorong You, aka Shannon You, 59, of Lansing, Michigan, was convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, economic espionage, and wire fraud. You was originally indicted in February 2019 for trade secret offenses and wire fraud, and was charged in a superseding indictment with  economic espionage and conspiracy to commit economic espionage in August 2020.

According to court documents and evidence presented at trial, You stole valuable trade secrets related to formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans. You was granted access to the trade secrets while working at The Coca-Cola Company in Atlanta, Georgia, and Eastman Chemical Company in Kingsport, Tennessee. The stolen trade secrets belonged to major chemical and coating companies including Akzo-Nobel, BASF, Dow Chemical, PPG, Toyochem, Sherwin Williams, and Eastman Chemical Company, and cost nearly $120,000,000 to develop.

According to court documents and evidence presented at trial, You stole the trade secrets to set up a new BPA-free coating company in China. You and her Chinese corporate partner, Weihai Jinhong Group, received millions of dollars in Chinese government grants to support the new company (including a Thousand Talents Plan award). Documents related to You’s Thousand Talents Program application were admitted at trial; those documents, and other evidence presented at trial, showed the defendant’s intent to benefit not only Weihai Jinhong Group, but also the governments of China, the Chinese province of Shandong, and the Chinese city of Weihai, as well as her intent to benefit the Chinese Communist Party.

Here's the writeup of her 2019 indictment at C&EN (article by Melody Bomgardner): 

A federal grand jury has indicted an American materials scientist and a Chinese national for stealing trade secrets related to formulas for bisphenol A-free coatings. The technology was developed by several companies and a major customer as part of an effort to replace food and beverage can linings made with BPA-containing epoxies because of concerns about human health effects of BPA....

“Eastman takes protection of its intellectual property seriously and we have controls in place to help prevent and to detect theft of confidential information,” Eastman’s chief legal officer, David A. Goldman, tells C&EN. “Those controls worked in this case, and we have been cooperating with law enforcement in this matter for some time.”

You would have thought that there would be more coverage of the trial, but there really hasn't been, and so we don't have a sense as to the strength of the government's case, other than the fact that Dr. You was convicted. The "Money" aspect of Money Ideology Compromise Ego seems pretty strong here. Will be interesting to see what her sentence turns out to be. 

Agilent wins IP case against Chinese firm

From this week's Chemical and Engineering News, this article from Craig Bettenhausen: 

The instrument maker Agilent Technologies has won a $1.25 million patent infringement judgment against J&X Technologies, a gas chromatography firm started in China by former Agilent employees. J&X did not defend itself in court or respond in any way.

J&X was formed by four former Agilent gas chromatography (GC) researchers in Shanghai who worked for years to develop a better way to pass samples between two different separation columns in what’s known as 2-D GC, even securing a patent for Agilent on the technology in 2012. But Agilent didn’t bring the technique to market, going instead with a competing approach. In early 2015, the researchers left and formed J&X to commercialize their work.

Later that year, the researchers approached Agilent about licensing the patent, but the company declined. So J&X went ahead and commercialized a device anyway, Agilent claims in court documents, using information in the patent and copies of lab notebooks and technical drawings the researchers had copied or taken before quitting.

 I imagine that enforcing the patent cost close to a million bucks, so I imagine this was a "principle of the thing" decision by Agilent. Will be interesting to see how this plays out...

BREAKING: Harvard chemistry chair charged with lying to US government re: Chinese academic funding

Via Twitter, this remarkable news from the New York Times: 

BOSTON — Charles M. Lieber, the chair of Harvard’s department of chemistry and chemical biology, was charged on Tuesday with making false statements about money he had received from a Chinese government-run program, part of a broad-ranging F.B.I. effort to root out scientists suspected of stealing biomedical research from American laboratories. 

Dr. Lieber, a leader in the field of nanoscale electronics, was one of three Boston-area scientists accused on Tuesday of working on behalf of China. His case involves work with the Thousand Talents Program, a state-run program that seeks to draw talent educated in other countries... 

...Federal prosecutors said on Tuesday that Dr. Lieber made false representation to questions about his participation in the Chinese program to the United States Department of Defense. He is also charged with misrepresenting his involvement in Thousand Talents and his affiliation with Wuhan University of Technology to officials at the National Institutes of Health. 

According to charging documents, Dr. Lieber was paid up to $50,000 per month in salary and $150,000 per year in living expenses by Wuhan University of Technology. He was also awarded more than $1.5 million by the university and the Chinese government to build a laboratory in Wuhan. 

Researchers are legally obligated to disclose such payments  to their academic institutions. 

A representative for Dr. Lieber could not immediately be reached for comment....

NBC indicates this is the shakeout from a Boston-wide investigation, including a PLA lieutenant who was studying at Boston University. Here are details from NYT on that:

...Yanqing Ye, a physicist who had been studying at Boston University until last spring, was also charged on Tuesday, accused of lying to authorities about her status as a lieutenant in the People’s Liberation Army. Ms. Ye, who was charged with visa fraud, making false statements, acting as an agent of a foreign government and conspiracy, is in China and was not be arrested...

This is moving a bit fast for me to understand what is happening, but here are my priors:

• I do believe it is clear that there is a Chinese government-wide priority to use whatever means available to obtain economically- and militarily-important scientific and engineering IP from the US. 
• I am very skeptical as to the FBI's ability to distinguish between scientists who were stupid (i.e. broke laws accidentally) and those who were evil (those who intended to break laws and transfer science/technology illegally.) 
• I believed this before the current Administration, I note
• I suspect that this effort on the part of the FBI will be broadly unproductive for everyone involved. 

So, those are my priors. We'll see how this goes. Updates as news becomes available. Looks like Harvard is cutting ties quick - their statement, via NBC: 

"The charges brought by the U.S. government against Professor Lieber are extremely serious," Harvard said in a statement. "Harvard is cooperating with federal authorities, including the National Institutes of Health, and is initiating its own review of the alleged misconduct." 

The university added that Lieber has been put on "indefinite administrative leave."

 Bonkers.

UPDATE 1:48 PM: The Justice Department press release, and the actual indictment. After reading the indictment, it sure seems like the FBI has Professor Lieber dead to rights on lying to the FBI agents who visited him.

CJ's advice: Don't talk to the cops. If you must talk to the cops, don't lie. (Also, don't talk to the cops without a lawyer. But better yet, don't talk to the cops.)

Chinese researcher pulled off Boston plane with medical research samples

Via the New York Times, this rather interesting story about a researcher (postdoc?) at Beth Israel Hospital who was detained by the US government:

Zaosong Zheng was preparing to board Hainan Airlines Flight 482, nonstop from Boston to Beijing, when customs officers pulled him aside. 

Inside his checked luggage, wrapped in a plastic bag and then inserted into a sock, the officers found what they were looking for: 21 vials of brown liquid — cancer cells — that the authorities say Mr. Zheng, 29, a cancer researcher, took from a laboratory at Beth Israel Deaconess Medical Center. 

Under questioning, court documents say, Mr. Zheng acknowledged that he had stolen eight of the samples and had replicated 11 more based on a colleague’s research. When he returned to China, he said, he would take the samples to Sun Yat-sen Memorial Hospital and turbocharge his career by publishing the results in China, under his own name....

Presuming this is what it looks like, I can't really feel very sorry for Mr. Zheng. Outside of ethics and morality, if you steal something, being caught within federal law enforcement jurisdiction is really dumb. (Here's a redacted copy of the affidavit, apparently.)

It is rather shocking to me how heavily federal law enforcement seems to be taking (waves hands wildly) the acquiring/stealing (?) of scientific work product from the United States in the life sciences. I think it's pretty reasonable to really crack down on industrial IP theft from the US (i.e. this is material that someone is already making money on), but the taking of random samples from biology labs? It's really hard to believe any one (or 21) vials are worth anything.

Still, a story like this will encourage those who are being dumb about stealing stuff (like this guy) to be a little smarter or perhaps not to do it. Not an altogether bad thing. 

If you're going to steal secrets, don't get caught redhanded

From this week's Chemical and Engineering News, the latest in the IP theft world (by Marc S. Reisch):

A federal grand jury in St. Louis has indicted former Monsanto researcher Haitao Xiang for stealing crop productivity algorithms with the intention of handing them over to a Chinese government research institute. After Xiang quit his job in June 2017, he downloaded the algorithms to a micro-SD card, according to the indictment. He then purchased a one-way ticket to China; federal officials stopped him at the airport and seized the card. If convicted, Xiang faces up to 15 years in prison and a $5 million fine on each of several espionage charges, and up to 10 years for each of several trade secret theft charges.

Important caveat: ham sandwich. I wonder how they caught him, and how they knew this was happening? It will be interesting to see what happens to Mr. Xiang. 

More maps walking off the boat

Also in this week's C&EN, more intellectual-property theft (article by Alex Scott, emphasis mine): 

Josh Harry Isler, a 55-year-old former technical services manager for DuPont, faces up to 15 years in prison and a fine of up to $500,000 after pleading guilty to theft of fuel-enzyme-related intellectual property and making a false statement to the FBI. Isler, who lives in St. Ansgar, Iowa, admitted that in August 2013 while still a DuPont employee—but after having accepted a job from CTE Global, a competitor in the fuel enzymes business—he transferred hundreds of DuPont’s electronic files to an external device.  

Many of the files related not just to DuPont but to the firm’s customers, some of whom were also customers—or potential customers—of CTE Global. Isler later transferred some files to his new employer. Isler is waiting to learn if he must pay DuPont compensation.  

The theft of trade secrets has been a recurrent issue for DuPont in recent years. In 2017, the firm charged an employee of 27 years with stealing trade secrets relating to flexographic printing, and in 2014 a former engineer working in DuPont’s titanium dioxide business was convicted of selling trade secrets to a Chinese firm.

Stay away from the flash drives, folks, it looks like intranets are tracking the maps on the boat. 

This week's C&EN

A few articles from this week's issue of Chemical and Engineering News:

• Cover: rare earths from coal waste (article by Britt E. Erickson)
• Good times for electronic materials suppliers (article by Jean-François Tremblay)
• I enjoyed this profile of BioVectra (article by Rick Mullin) 
• Solid profile of Jeremy Berg by Andrea Widener 
• I like the bit about "should find a way to take pride in and credit for" the widespread use of chemistry by people who don't consider themselves chemists....
• ...have chemists found a way to take actual credit* for that?  
• *credit: TBD*
• *meaningful credit to me: people devoting more actual funding to chemists or chemistry
• I really enjoyed this Mitch Jacoby piece on the actual boron structure in "slime"
• Air Liquide suing The Carlyle Group (article by Marc Reisch) 
• Fascinated to see a IP theft case actually go to the lawsuit stage when it appears that the main means of IP theft was 1) hiring a person and 2) the person walking off the boat with the maps
• Cool story by Carmen Drahl on single-atom Suzuki coupling
• Honestly, we're about at the "wave the Strem bottle at the reaction" phase, aren't we? 

Chemours employee caught stealing trade secrets

Also in this week's C&EN, another employee going rogue and getting caught: 

A federal grand jury has charged a former Chemours employee with stealing trade secrets related to sodium cyanide and trying to sell them to Chinese investors. 

The indictment charges that marketing professional Jerry Jindong Xu, who worked for Chemours and its former parent DuPont between 2004 and 2016, intended to use the stolen information to convince Chinese investors to export sodium cyanide and later build a competing plant in North America. 

Sodium cyanide is widely used to extract gold from ore. Demand for the potentially deadly chemical has been on the rise as consumption of the precious metal increases.
Earlier this year, Evonik Industries and Grupo Idesa opened a 40,000-metric-ton-per-year sodium cyanide facility in Mexico. Chemours announced plans for a $150 million plant in the Mexican state of Durango. 

The indictment charges Xu with conspiracy to commit theft of trade secrets. If convicted, he faces 10 years in jail and a $250,000 fine. “We are committed to prosecuting anyone—be they rogue actors or foreign nations—who tries to line their pockets” by stealing trade information, says David Weiss, acting U.S. attorney for the District of Delaware. Xu’s lawyer tells C&EN he has no comment. 

According to the indictment, Xu told one Chinese correspondent that he launched the sodium cyanide project as “a long-term investment for himself and not to slave away at this only to benefit someone else.”

In the ol' Money Ideology Compromise Ego explanation for espionage, I've noted how often money is a primary explanation (although surely ego plays into it.) 

Another one for the MICE files

Also in this week's C&EN, looks like the U.S. attorney has another trade secrets case (article by Marc S. Reisch): 

...Anchi Hou, 61, who worked at DuPont for 27 years, is accused of downloading more than 20,000 files on DuPont’s flexographic printing plate technology in the months prior to his retirement at the end of 2016. If convicted, Hou could receive a sentence of up to 10 years in prison and pay a fine of up to $250,000. 

According to a Federal Bureau of Investigation complaint filed against him in the U.S. District Court in Newark, N.J., Hou worked in DuPont’s advanced printing division in Parlin, N.J., and was involved in the development of photo-polymeric plates used in printing presses. He holds bachelor’s and master’s degrees in chemical engineering from National Taiwan University and a Ph.D. from Penn State University. 

Four days after forming a flexographic printing consultancy in November 2016, Hou told DuPont he planned to retire at the end of the year. In December, Hou was discovered taking photos of equipment in the Parlin facility. The firm then checked computer records and discovered that Hou had been downloading proprietary documents since July. 

DuPont filed a civil complaint last month suggesting that Hou had visited printing firms in Taiwan in July 2016 with an eye to selling them proprietary information. The FBI arrested Hou on April 7 after learning that he and his family had booked airline flights to leave the U.S.

Of the four reasons that people perform espionage (Money, Ideology, Compromise and Ego), it looks like Dr. Hou was after Money.

(I wonder what was the actual criminal act? Surely it's not illegal to become a consultant and to use the knowledge gained from your employer, but it is probably illegal to take documents containing trade secrets from your employer. Are the pictures illegal?) 

I wonder if layoffs inspire disloyalty...

In the midst of an absolutely phenomenal read by Del Quentin Wilber in Bloomberg Businessweek about a plot to steal DuPont titanium dioxide processes by a Taiwanese businessman, Walter Liew, (in association with a Chinese chemical firm), something that sounds pretty darn familiar...:

They found Tim Spitler, a 49-year-old former DuPont engineer living in Reno, Nev...  

According to the FBI documents, the relationship between Liew and Spitler lasted for years. Liew flattered Spitler, who was bitter about DuPont’s business strategies and its decision in the ’90s to fire thousands of employees. Spitler also admitted to agents that he felt insecure about not having attended a top university (he got a degree from Tri-State University in Angola, Ind.) and was constantly worried about losing his job. Liew made Spitler feel valued and understood. He sent him a gift basket every Christmas, the FBI reports show, and helped pay for the funeral of Spitler’s daughter, who’d committed suicide in 2006. When Spitler would call to thank Liew for his generosity, the businessman would steer the conversation to business and titanium dioxide. 

Spitler provided Liew with information about DuPont’s processes—even sketches of key components—and allowed him to root through boxes in his house and take whatever records he found. Spitler told federal agents that Liew paid him $15,000 for DuPont-related documents, including a blueprint to a plant in Delaware. The schematics provided details of flow rates, pipeline sizes, temperatures, and chemical compositions. As such, it was considered one of DuPont’s most critical trade secrets, U.S. law enforcement officials contend, and Liew used the documents to prove his bona fides to Chinese executives.

Spitler killed himself after Walter Liew was arrested in 2012.

It seems apparent to me that DuPont's reliance on the law to keep their current and former employees from leaking valuable company secrets was not very effective in the face of someone who was a seemingly talented intelligence officer.*

I wonder if a kindler, gentler approach to layoffs may have inspired a little more fidelity. Maybe some day, some company will run that experiment - I am not holding my breath.

*In case anyone is keeping score, it's apparent that of Money, Ideology, Compromise and Ego, it was a combination of Money, Ideology and Ego...

A brief history of Roundup Ready crops

In the midst of a fascinating article in The New Republic by Ted Genoways about the Chinese businessmen attempting to steal seeds from the Midwest and the FBI team that tracked them down, a short history of Roundup Ready crops: 

Monsanto was also quick to see the market opportunity. The company had grown with the production of 2,4-D and its descendant 2,4,5-T, which were then combined to produce Agent Orange to defoliate forest cover during the Vietnam War. In 1970, in an effort to come up with an even stronger plant killer, Monsanto chemist John E. Franz hit upon an herbicide called glyphosate, which was marketed under the trade name Roundup and had seen unmatched growth in broadleaf weed control in the agricultural industry. The only problem with Roundup: It was such an effective herbicide that farmers had to apply it carefully, spraying only early sprouting weeds, to avoid exterminating their crops. 

Monsanto’s engineers set about searching for a gene that would allow crops to survive exposure to Roundup. They found it in the wastewater-treatment plant of one of their own glyphosate production plants in Louisiana, where workers had noticed a range of bacteria thriving despite exposure to Roundup—and one, under lab testing, displayed total immunity to glyphosate pesticides. By 1996, Monsanto had commercially introduced soybeans that had been genetically modified to resist glyphosate—what the company termed “Roundup Ready.”

I had no idea that some level of serendipity occurred to help this happen. "Fortune favors the prepared mind" and all of that. (Does anyone know if this is actually true?)

The article legitimately questions whether or not the FBI should be using the Foreign Surveillance Intelligence Act to track foreign nationals performing industrial espionage within the United States. It seems to me that the most ideal scenario would be a new set of laws granting surveillance powers to federal agencies that are tasked with preventing industrial espionage from other nations. But asking for new laws these days seems like asking for a pony*, so we're probably going to muddle through with what we have.

*Not that I really want a lot of new laws, I note. 

A classic case of IP theft at a bakery

From my midnight wanderings, a story of master batch record theft in March in the New York Times: 

...“It creates its own frenzy,” said Rebecca Flint Marx, editor of San Francisco Magazine’s food section, who noted that not only are cruffins a cult item — and at $4.50, relatively affordable — but they are also camera-ready, as photos on Instagram attest. Fillings include caramel, strawberry milkshake or Fluffernutter cream (among other flavors), depending on Mr. Stephen’s mood. 

Now, the tempting sweet may have inspired a crime. Overnight last week, a thief stole the recipe for cruffins, and Mr. Stephen’s 230 other recipes, from binders in the bakery’s kitchen. Nothing else in the store was touched: not money, valuable baking equipment, an iPad or other computers. And while Mr. Stephen has copies of the recipes on his office computer, and the store opened almost on time the next morning, he was understandably upset.... 

...The recipe theft was noticed at 3 a.m. on Feb. 27, when Sarah Auger, a pastry maker from Vermont who came here to join the food movement, reported to work and saw that the front door to the store was unlocked. A co-worker opened one of the kitchen’s black binders looking for the recipe for cardamom apple scones, but it was empty. The two searched the four other recipe binders, and all their pages were missing, too. At 3:15 a.m., Ms. Auger texted Mr. Stephen, who was sleeping: “Hey, sorry to bother you, but do you have recipes? None of them are in the binders, and we need the scone recipe.” 

Mr. Stephen woke up, read the text and rushed to the bakery. “I’d locked the door the night before, that’s for sure,” he recalled. Once in his shop, he reached for the binders. “I could feel they were empty,” he said...

What is interesting is that very few people believe that a competitor was the thief - so who was it?

In my time in the chemical manufacturing industry, I've yet to see classic IP theft of this sort, i.e. stolen lab notebooks. There are, of course, cases where the copies of the maps leave the boat in people's heads or their flash drives, but that's a different matter.  

So that's an interesting quote about IP stuff in China: "Even if they are published, they are difficult to duplicate.”

From an article in this week's C&EN by Maureen Rouhi on R&D in China: 

Evonik’s Chen contends that enforcement of IP rights is improving in China. He points to the establishment of three IP courts and moves to improve judicial transparency. However, Chen adds, “the situation in small cities and remote areas is still behind that in the big cities.” 

In a sign of better IP protection for Solvay, in December 2013 the company won an IP lawsuit in a Chinese court against the Chinese firm HySci Specialty Materials. Solvay had sued HySci for infringement of patents for rare-earth mixed oxides used in automobile catalytic converters. 

The court victory aside, Solvay’s Metivier says IP protection is still a problem in China. The greatest risk, he explains, is “know-how leakage,” when staff leave the company or succumb to outside offers to divulge trade secrets. 

Prosecuting trade-secret theft is made difficult by “lack of discovery to extract key evidence from opponents coupled with high evidentiary standards in China,” says Jeffrey D. Lindsay, head of intellectual property at Asia Pulp & Paper, an Indonesian paper manufacturer with operations in China. Western companies that sue to protect their IP “tend to have success,” Lindsay adds, “although the lower level of damages in China leads some infringers to not fear the law all that much.” 

To enhance IP security, “we don’t develop products that can be easily copied,” Xenidou says. “Our materials and processes are quite complicated, sophisticated, and integrated with customer processes. Even if they are published, they are difficult to duplicate.” 

Metivier explains that Solvay institutes processes to segregate know-how, so that people do not have all the data on a product or process. “We also follow up with the people leaving the company, identifying where they go and for whom they work,” he says. 

Meanwhile, other factors may be dimming China’s innovation sparkle. Metivier notes a growing nationalism that manifests in a belief that the country will succeed on its own. A consequence, he says, is greater difficulty in bringing in foreign scientists, and that worries him. “If you want to be an innovative country, science and development needs to be open,” he says. “China needs to promote exchange to achieve diversity.”

It sure seems like a lot of work to protect one's IP in China. Better to protect than not, I suppose.