Composition of a Chinese Trade Secrets Theft Enterprise: A Family Affair – Part 5 of 5

Last month the U.S. Attorney for the Eastern District of Pennsylvania announced the second guilty plea from one of five individuals charged with conspiracy to steal trade secrets from GlaxoSmithKline (GSK) a U.S. pharmaceutical company. According to the press release the theft occurred in order to benefit a Chinese company backed by the Chinese government.ippiblog.com/…/composition-of-a-trade-secrets-theft-enterprise-case-study-part-4-of-5

This post is Part 5 of 5 in which we conclude our dive into the composition of the GSK trade secrets theft enterprise.

Please see the following links to read the previous four Parts: Part 1 – Part 2 – Part 3 – Part 4

STATUS OF THE FIVE DEFENDANTS

• Two of the defendants pled guilty and are awaiting sentencing
• One is scheduled for a plea hearing later this month
• One went to trial but the judge recently approved the defendant’s motion for a postponement until after the other defendants are sentenced
• Unable to determine the status of the fifth defendant

LESSONS LEARNED

This case reminds us of two fundamental trade secrets protection strategies:

1.  Establish and maintain a vigorous company email monitoring program; and
2.  Conduct periodic background checks of employees who have access to complex and valuable trade secrets.

(See the below screenshot of the company registered by the defendants–to facilitate their theft operation–publically listed on the Delaware, Department of State, Division of Corporations site. “RHENOPHARMA.”)

When you consider the potential impact these two basic IP protection strategies could’ve have had in disrupting this trade secrets theft enterprise sooner, similar companies–going forward–should zealously implement those actions.

Instead, the thieves were able to disseminate countless trade secrets from 2012 until on or about November 3, 2015.

Terminating this scheme should not have depended on one informant (as important as informant development is) overhearing or being bragged to. That was an exceptional opportunity (in this case) that companies cannot rely on.

TRADE SECRETS THEFT ENDEMIC

The recent arrest of a Chinese intelligence officer extradited to the U.S. to face charges of attempting to steal trade secrets from U.S. aviation and aerospace companies is a stark reminder of how deeply invested state-sponsored and foreign private entities are in stealing your trade secrets.

Bad actors will go to almost any lengths to steal your IP to avoid a massive commitment to research and development ( R&D) themselves.

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