Chinese Scientist Pleads Guilty to Theft of Trade Secrets from U.S. Agribusinesses

Today a Chinese scientist who had worked for U.S. agribusiness companies Dow AgroSciences, LLC and Cargill, Inc. pleaded guilty to one count each of theft of trade secrets and economic espionage arising from his delivery to individuals in China and Germany of biological materials and confidential information belonging to his employers. United States v. Huang, Nos. 10cr102 and 11cr163 (S.D. Ind.). See Chinese National Pleads Guilty to Economic Espionage and Theft of Trade Secrets (U.S. Department of Justice Oct. 18, 2011)According to his signed plea agreement, from January 2003 through February 2008, Kexue “John” Huang was a research scientist employed by Dow AgroSciences in Indianapolis, Indiana. Beginning in 2005, Huang led a Dow research team in the development of spinosyns, which included unique, proprietary organic insecticides based upon the soil bacteria Saccharopolyspora spinosa (S. spinosa) and Saccharopolyspora pagona (S. pagona).

Huang admitted that although he had signed a confidentiality agreement with Dow, from 2007 to 2010, he transferred and delivered stolen Dow trade secrets to individuals in Germany and the People’s Republic of China. The plea agreement described the misappropriated trade secrets as including an S. spinosa strain used to produce Dow’s Spinosad products; a model S. spinosa strain used for research and development; a plasmid used to produce spinosyn genes; an S. Pagona strain for butenyl-spinosyns; a Pseudomonas florscens strain; a Pseudomonas fluorescens plasmid; an S. spinosa fermentation protocol; at least two unique plasmids used to increase butenyl-spinosyn yield; three plasmids used for gene expression in S. spinosa; and two unique E. coli strains used to increase butenyl-spinosyn yield. Using these secrets, Huang directed research activities carried on by other scientists at the Hunan Normal University in China. He further applied to and received funding from the National Natural Science Foundation of China for additional spinosyn research. He also published scientific papers including Dow’s secret information. In addition, Huang admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in China, including identifying Chinese manufacturing facilities that would allow him to compete directly with Dow in the established organic pesticide market.

In March 2008, Huang left Dow to work as a biotechnologist for Cargill. He signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill. However, Huang admitted that he stole one of the company’s trade secrets – the genetic sequence needed to produce an enzyme that was a key component in the manufacture of a new food product. Huang later provided the sequence to a student at Hunan Normal University.

Huang faces a maximum prison sentence of 15 years on the economic espionage charge and 10 years on the theft of trade secrets charge.

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