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September, 2018

Cancer researcher pleads guilty to theft of GSK's trade secrets on China's behalf

Original article: United States Justice Department

A prominent scientist has admitted to conspiring to steal trade secrets from GlaxoSmithKline for the benefit of the Chinese pharmaceutical company Renopharma. Yu Xue, a U.S. citizen, had worked for GSK in Philadelphia for a decade. Prosecutors allege that she and her colleagues Dr. Tao Li and Dr. Yan Mei downloaded and emailed confidential information - including research on specific cancer drugs - that they planned to use as they established Renopharma in Nanjing, Jiangsu Province.

Analysis:

During the twilight of former US President Barack Obama's second term, U.S. officials stepped up criticism of Chinese corporate espionage, but the media didn't focus on the cases. Intellectual property wasn't a hot topic. 


When Yu Xue was indicted in January 2016, the magazine Science, one of the few publications to cover the case in depth, suggested she was innocent. Its principal argument was that prosecutors in similar cases had been unable to prove trade-secret theft, so the same might happen in the Xue case. The story was entitled "U.S. charges drug researchers with sending trade secrets to China, but will case stand up?" The article noted that Xue hired Washington, DC-based defense attorney Peter Zeidenberg, described as "quickly becoming the go-to lawyer for Chinese scientists accused of trade secrets crimes."


“My client is not guilty and is pleading not guilty and will be contesting the charges," Zeidenberg was quoted as saying. 


It looks like Xue had a change of heart. That's probably because prosecutors found evidence that she sent a "substantial number" of GSK’s scientific documents, including some containing trade secrets, to Doctors Li and Mei at Renopharma in Nanjing. According to the Justice Department, the data contained "information regarding multiple biopharmaceutical products under development, GSK research data, and GSK processes regarding the research, development, and manufacturing of biopharmaceutical products." 


Xue said in court that she didn't understand the material she sent to China was considered trade secrets. Unfortunately for Xue, prosecutors only had to prove that she knew what she was sharing was confidential to establish her guilt, The Washington Post notes. 


Xue could be sentenced to a maximum of a decade in prison and a $250,000 fine. She might also be forced to compensate GSK for the trade secrets' value. That bill could her up to $2 billion, The Washington Post reports. Sentencing is scheduled for December 18. 


“Dr. Xue used her position at GSK to steal valuable trade secrets to benefit a company bankrolled by the Chinese government,” said U.S. Attorney McSwain in a Justice Department statement. “We cannot allow U.S. citizens or foreign nationals to steal sensitive business information and hand it over to competitors in other countries."

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