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Trade Secret/Economic Espionage Cases - U.S. v. Zhu (D. Mass.)

Department of Justice


Trade Secret/Economic Espionage Cases

June 19, 2002

U.S. Department of Justice
United States Attorney
District of Massachusetts
John Joseph Moakley
U.S. Courthouse
1 Courthouse Way, Suite 9200
Boston, MA 02210
Press Contact: Samantha Martin
(617) 748-3139

Pair Charged With Theft Of Trade Secrets From Harvard Medical School

  Boston, MA... Two individuals, presently residing in San Diego, California, were arrested today in California on a federal complaint issued out of federal court in Boston charging them with theft of trade secrets from Harvard Medical School’s Department of Cell Biology while they were research fellows. United States Attorney Michael J. Sullivan and Charles S. Prouty, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced today that JIANGYU ZHU, a/k/a “Jiang Yu Zhu,” age 30, and KAYOKO KIMBARA, age 32, both of 3440 Lebon Drive, San Diego, California, were charged in a criminal complaint with conspiracy, theft of trade secrets, and interstate transportation of stolen property. The charges arise out of the alleged theft of certain trade secrets belonging to Harvard Medical School, including reagents made and used by Harvard Medical School to develop new immunosuppressive drugs to control organ rejection, and also to study the genes that regulate calcineurin, an important signaling enzyme in the heart, brain and immune systems. It is alleged that ZHU and KIMBARA stole the trade secrets and then transported them from Boston, Massachusetts to San Antonio, Texas. “Prosecuting people who steal the intellectual property of individuals and institutions is a very high priority for the Department of Justice,” commented U.S. Attorney Sullivan. “Protecting cutting-edge ideas is crucial to the creation of new products and our economy as a whole. Congress has enacted a series of laws to assure that innovators get credit for their inventions and if people steal the ideas that belong to someone else and try to use those ideas for their own economic benefit, they will be prosecuted.” According to the affidavit filed in support of the complaint, ZHU and KIMBARA were working in Harvard Medical School’s Department of Cell Biology (“Harvard”) as post-doctoral research fellows on a research project in a lab under the direction of a professor of Cell Biology at Harvard. Researchers in the laboratory funded in part by the National Institute of Health and the American Cancer Society, used information, technology and chemical reagents previously developed by the Harvard professor to screen drugs, proteins and genes in an effort to determine those drugs which might control organ rejection, and those genes which might control calcineurin. The lab was kept locked and considered secure. It is alleged that on or about February 27, 1997 until on or about December 31, 1999, ZHU was employed as a research fellow in the Harvard laboratory, and that on or about October 1, 1998 until on or about December 31, 1999, KIMBARA was also employed as a research fellow in the Harvard laboratory. It is alleged that ZHU and KIMBARA each signed a Participation Agreement upon coming to Harvard in which they agreed that all rights to any invention or discovery conceived or first reduced to practice as part of, or related to, their University activities were assigned to Harvard, and that their obligations would continue after the termination of their Harvard employment. It is alleged that despite their legal and contractual obligations, ZHU and KIMBARA took and conspired to take proprietary and highly marketable scientific information, belonging to Harvard, with them to Texas, with the intention of profiting from such information by collaborating with a Japanese company in the creation and sale of related and derivative products or otherwise capitalizing on the information. The complaint alleges that using information, reagents, and technology developed by the Harvard professor, and working under his direction, ZHU and KIMBARA were involved in screening drugs, genes, and proteins to find new agents that would block calcineurin, an immune cell constituent that when activated can cause organ transplant rejection. It is alleged that from November 1998 through February 1999, using a particular screening technique and working under the direction of the Harvard professor, KIMBARA was able to identify two genes which encode proteins that bind to calcineurin. Further research and analyses by ZHU and KIMBARA from February 1999 through September 1999, showed that in addition to binding tightly to calcineurin, the two genes blocked the activity of calcineurin. These findings offered a potential means of treating a number of diseases affecting the immune, cardiovascular, and nervous systems and therefore had significant commercial potential. According to the complaint, by January or February 1999, ZHU and KIMBARA began working from approximately 11:00 p.m. to approximately 9:00 a.m, thus enabling them to work without direct supervision from the Harvard professor and to conceal their activities from him. It is alleged that over time, the Harvard professor was able to determine that KIMBARA was doing work that she was not sharing with him. It is alleged that although ZHU and KIMBARA reported the discovery of four genes as a result of the genetic screenings performed by them in the Harvard professor’s lab, that, between February 1999 and August 1999, at least seven additional genes had been derived from preliminary genetic screenings performed by ZHU and KIMBARA. On October 22, 1999, Harvard filed a provisional patent on the two genes and their products. On December 13, 1999, ZHU received an offer of employment from the Institute of Biotechnology at the University of Texas, San Antonio (“University of Texas”). It is alleged that the day after receiving the offer, and while still employed at Harvard, ZHU sent an email to a biochemical company in Japan in which he stated his intent to collaborate with another researcher after he left Boston to commercialize the antibodies suggested by the research done in the Harvard laboratory. It is alleged that ZHU sent three new genes to Japan for the purpose of the Japanese biochemical company making antibodies against them, without the knowledge or authorization of the Harvard professor, and in direct violation of the Participation Agreement signed by both ZHU and KIMBARA. It is alleged that the Japanese company did in fact produce antibodies against two of the genes and shipped these antibodies to ZHU at the University of Texas between February and May 2000.

ZHU accepted the position with the University of Texas, both to run his own lab and to teach. KIMBARA was also hired to work in the University of Texas laboratory. Both were scheduled to begin their employment on January 15, 2000. It is alleged that beginning no later than December 27, 1999 to on or about January 1, 2000, ZHU and KIMBARA removed, without permission or authorization, at least twenty cartons, including some Styrofoam containers commonly used to ship perishable biological materials, from the Harvard professor’s laboratory in the very early morning hours or at night. It is alleged that between approximately December 22, 1999 and January 1, 2000, ZHU and KIMBARA made arrangements to ship more than thirty boxes of biologicals, books and documents to the University of Texas, unbeknownst to Harvard or the Harvard professor and without permission or authorization. It is alleged that beginning on approximately January 3, 2000, other Harvard laboratory personnel observed that significant amounts of biological material, equipment and scientific documentation were missing from the lab. It is alleged that on approximately January 11, 2000, ZHU and KIMBARA met with officials from Harvard, including the Harvard professor. During that meeting, ZHU and KIMBARA denied removing reagents, materials, and primary data from the lab and also denied hiding the results of work conducted while they worked in the lab. ZHU and KIMBARA announced they were resigning their positions at Harvard and relocating to other research positions. They further stated that they had turned over all the primary data for the research they conducted and they denied that they took anything from the laboratory other than personal belongings. According to the complaint, in approximately June 2000, a significant percentage of the materials taken from Harvard by ZHU and KIMBARA was recovered from their workspace at the University of Texas. However, many of the materials allegedly taken by ZHU and KIMBARA from the Harvard professor’s laboratory have not yet been recovered. If convicted, ZHU and KIMBARA each face a maximum sentence of 5 years’ imprisonment on the conspiracy charge, 10 years in prison on the theft of trade secrets charge, and 10 years in prison on the interstate transportation of stolen property charge. Additionally, the defendants face a maximum fine of $250,000 on each of the charges and any prison term would be followed by a 3 year term of supervised release. The Japanese company cooperated fully and has returned all research data and products to Harvard Medical School. The investigation is continuing. The case was investigated by the Federal Bureau of Investigation in New England with assistance from the Federal Bureau of Investigation in San Diego, California and the U.S. Attorney’s Office for the Southern District of California. It is being prosecuted by Assistant U.S. Attorney Allison D. Burroughs, Senior Litigation Counsel, in Sullivan’s Economic Crimes Unit.


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