2:49 PM
 | 
Feb 01, 2019
 |  BioCentury  |  Politics, Policy & Law

Trading blows over trade secrets

JHL Biotech and Genentech duke it out over allegedly stolen trade secrets

Roche’s Genentech Inc. unit kept an employee on the payroll in its South San Francisco office for almost a year after it discovered she was stealing trade secrets, watching as she channeled proprietary data to a Taiwanese startup creating biosimilars of Genentech drugs, according to documents filed in two U.S. federal court cases.

Genentech was complying with requests from the FBI, which was building a criminal case against the woman, Xanthe Lam, and three employees of Taiwanese JHL Biotech Inc., two of whom used to work at Genentech.

On Oct. 25, the U.S. District Court for the Northern District of California indicted Xanthe Lam, her husband Allen Lam, James Quach and John Chan for theft of trade secrets. Less than a week later, Genentech filed civil charges against the four defendants, also naming JHL and its co-founders Racho Jordanov and Rose Lin in the suit. Genentech is seeking damages and an injunction to block JHL from making and selling products, claiming JHL benefited from the proprietary information.

“The stolen information provides a roadmap for JHL to produce biosimilar versions of Genentech’s medicines.”

Genentech Inc.

In court documents, Genentech alleges that “the stolen information provides a roadmap for JHL to produce biosimilar versions of Genentech’s medicines.”

JHL is developing biosimilar versions of Pulmozyme dornase alfa, Rituxan rituximab, Herceptin trastuzumab and Avastin bevacizumab. It denies that it ever received stolen trade secrets from Genentech, and claims its programs and procedures are materially different from Genentech’s.

The defendants have asked for a stay of the civil case until the criminal case concludes, according to court documents filed in January. A hearing on the injunction and stay is set for Feb. 14. The federal criminal suit will go before a jury on April 6, 2020.

Genentech declined to respond to questions from BioCentury; JHL did not respond to a request for comment. Their positions, however, have been outlined in hundreds of pages of documents filed with the federal court.

A closely watched biotech, JHL has raised over $200 million in private funding and has a high-profile deal with Sanofi, which also owns more than 10% of its stock. KPCB Asia Investment, Biomark Capital and Sequoia Capital also have greater than 10% stakes.

Unaffiliated investors told BioCentury last year that JHL was expected to apply for listing on the Hong Kong stock exchange’s new biotech chapter (see “Hong Kong’s New Chapter”).

The U.S. government’s criminal case against the...

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