Couple Charged for Stealing IP from Children's Hospital to Launch a Biotech Firm
A San Diego couple has been charged by the federal government with stealing intellectual property related to pediatric medical treatments from Nationwide Children's Hospital in order to launch a pharmaceutical company in China.
“Nationwide Children’s Hospital devoted years of work and its own money to researching exosomes in order to promote honorable medical advances,” said Assistant Attorney General John C. Demers of National Security. “The hospital’s Research Institute took reasonable measures to keep its trade secrets secret. I commend the cooperation of Nationwide Children’s throughout this investigation.”
According to the indictment, Yu Zhou, and Li Chen, currently of San Diego, Calif., conspired to, attempted to and did steal scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for their own personal financial gain.
The defendants were arrested in July.
Zhou and Chen are spouses who worked in separate medical research labs at the Research Institute for 10 years each (Zhou from 2007 until 2017 and Chen from 2008 until 2018). Exosomes play a key role in the research, identification and treatment of a range of medical conditions, including necrotizing enterocolitis (a condition found in premature babies), liver fibrosis and liver cancer.
The husband and wife allegedly founded a company in China in 2015 without the hospital’s knowledge. While Zhou and Chen continued to be employed by Nationwide Children’s, they marketed products and services related to exosome isolation through their Chinese company, the indictment says.
The indictment also alleges that in 2017, Zhou and Chen helped co-found an American biotechnology company. As of 2019, the company’s website advertises multiple products and services related to exosome isolation, including a kit that was developed from a trade secret created at a Nationwide Children’s research lab.
Zhou and Chen allegedly used the hospital’s Research Institute resources and equipment to conduct the exosome research necessary for their unauthorized, outside work.
Before his official last day of employment with the research institute, says the indictment, Zhou allegedly participated in a press release announcing the American company’s plans to market and distribute “proprietary exosome isolation systems” from its headquarters in Central Ohio.