Genentech Takes Aim at Rival as Feds Charge Former Employees With Trade Secret Theft

Genentech headquarters in South San Francisco

Three former Genentech workers and another individual have been hit with the trade secret equivalent of a double whammy.

In a federal indictment unsealed Monday, Xanthe Lam, a principal scientist who was with Genentech from 1985 until last year, her husband Allen Lam, and James Quach, who both also logged time at Genentech, were charged with stealing trade secrets to help the company's Taiwan-based rival JHL Biosciences make biosimilar versions of Genentech drugs, alongside John Chan.

Also on Monday, Genentech, represented by Keker, Van Nest & Peters, took aim at the former employees, JHL, and its co-founders Racho Jordanov and Rose Lin, who are both former Genentech employees, with a civil trade secret theft lawsuit.

"Dishonest and illegal actions such as these threaten scientific innovation, obstruct fair competition, and undermine the hard work of our employees and people throughout the industry who act with integrity and in the best interests of patients every day," said Genentech spokeswoman Nadine Pinell in an emailed statement Tuesday. Pinell also noted that the company reported findings of an internal investigation to the local U.S. Attorney’s Office and is cooperating in the office's ongoing criminal investigation.

"We will continue to pursue all necessary legal actions to halt any further dissemination and illegal use of our misappropriated intellectual property," she added.

Lawyers for the four charged individuals and a representative of JHL didn't immediately respond to messages Tuesday.

According to the federal indictment, the Lams communicated with JHL employees, many of whom were former Genentech employees. The defendants, the government claims, sought to help speed JHL's development of biosimilars, the generic versions of Genentech biologic treatments developed using living cells rather than the chemicals associated with traditional pharmaceuticals.

The indictment claims that beginning in December 2013, Xanthe Lam spent four weeks at JHL facilities in Taiwan without informing or getting approval from the appropriate manager at Genentech. The government claims that Xanthe Lam had her Genentech-issued laptop with her during her visit, allowing her to access Genentech’s password-protected document repository.

The indictment also claims that Xanthe Lam helped John Chan, the son of a family friend, get jobs at JHL. Xanthe Lam also allegedly funneled confidential documents to Chan via her husband with explicit instructions of "don't show it to others."

The government has also charged Xanthe Lam with conspiring with James Quach in violation of the Computer Fraud and Abuse Act. In particular, the government claims she allowed Quach to gain access to Genentech’s secure document repository to steal proprietary manufacturing protocols.

Genentech's civil suit claims that JHL co-founders Racho Jordanov and Rose Lin reached out to Xanthe Lam directly via her personal email to work as a consultant for the company while she was still employed by Genentech. The company's lawyers claim that JHL's co-founders "acted with oppression and malice, knowingly misappropriating Genentech’s confidential, proprietary, and trade secret information with the assistance of Xanthe and Allen Lam for his own benefit and the benefit of JHL."

Read the criminal indictment:

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Read the civil complaint:

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Correction: An earlier version of the story mistakenly said that Chan previously worked at Genentech. We regret the error.