Former Genentech Employees Accused of Stealing Biologic Manufacturing Process Trade Secrets


On October 25, 2018, the U.S. Attorney for the Northern District of California filed an indictment against four individuals (three of whom were former Genentech employees) alleging theft of trade secrets, computer fraud and abuse, and other crimes.  The indictment alleges that the defendants stole trade secrets related to Genentech’s products Pulmozyme, Rituxan, Herceptin, and Avastin, as well as other trade secrets related to Genentech’s manufacturing processes.  According to the indictment, the defendants used these secrets to assist a biopharmaceutical company, JHL Biotech, Inc., to create biosimilar candidates of Genentech’s products.  The defendants were arraigned, pled not guilty, and were released on bond.

Shortly thereafter on October 29, 2018, Genentech, Inc. filed a complaint against JHL Biotech, Inc., the former Genentech employees accused in the criminal case, and the CEO and COO of JHL.  Genentech asserted claims including trade secret misappropriation under state and federal law, breach of contract, and breach of state and federal computer fraud and abuse acts.  Among other requested relief, Genentech seeks an injunction preventing JHL or the individual defendants from “using Genentech’s confidential … information” and from making or commercializing any products that “utilize, embody, or were developed … [using] Genentech’s confidential, proprietary, and/or trade secret information.”

On November 5, 2018, Genentech filed a Notice of Motion & Motion for Preliminary Injunction (amended on November 6th). The motion seeks to (1) restrain and enjoin JHL and named JHL employees (including the criminal defendants) from using Genentech’s trade secret information, (2) compel JHL and the named individuals to return all confidential and proprietary Genentech information, (3) compel JHL to conduct a thorough investigation and account for any individual that received Genentech’s proprietary information, and (4) require JHL and the named defendants to provide a log of all communications that may have mentioned any Genentech proprietary information.

For previous coverage of JHL Biotech’s partnership in developing a rituximab biosimilar and other pharmaceutical products, see here.  JHL has conducted clinical trials for biosimilar trastuzumab (JHL 1188), biosimilar bevacizumab (JHL 1149), and biosimilar rituximab (JHL 1101).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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