The U.S. Department of Justice has secured another conviction against a Chinese national for trade secret misappropriation, which is part of a larger push to protect valuable intellectual property.
Li Chen, a long time biotech researcher in a medical lab at Nationwide Children’s Hospital Research Institute in Columbus, Ohio, pled guilty to conspiracy to misappropriate trade secrets and conspiracy to commit wire fraud. Chen, and her husband Yu Zhou, a fellow biotech researcher, were indicted in September 2019 following an extensive investigation. The indictment and plea agreement details their efforts to steal trade secrets related to exosome isolation technology, which represents a critical development in the diagnosis and treatment of pediatric diseases, including liver cancer and a condition found in premature babies.
Specifically, in 2015, while still employed by Nationwide, the couple founded their own company in China marketing and selling products developed using the proprietary technology. They also applied for patents in China to cover the exosome isolation technology, applied for research support from the Chinese National Natural Science Foundation, and allegedly received payments from China’s State Administration of Foreign Expert Affairs.
In 2017, the couple also co-founded an American biotech company, GenExosome Technologies, which also marketed products and services related to this technology. The couple received more than $876,000 in cash and stocks related to an asset purchase agreement with the company and Zhou was set to make an additional $450,000 from a separate stock purchase agreement. Under the plea agreement, Chen will forfeit approximately $1.4 million, 500,000 shares of common stock of Avalon GloboCare Corporation – parent company of GenExosome Technologies – and 400 shares of common stock of GenExosome Technologies.
The charges against Zhou are pending and carry a potential maximum sentence of 10-20 years in prison.