Volume 88 Issue 30 | p. 9 | News of The Week
Issue Date: July 26, 2010

Scientist Held For Trade Secret Theft

Intellectual Property: The FBI arrests former Dow employee
Department: Business
Keywords: secrets, China, theft

The FBI has arrested Ke-xue Huang, a former Dow AgroSciences employee, on charges that include 12 counts related to the theft of trade secrets to benefit a foreign government and five counts of foreign transportation of stolen property. He has been charged under the federal Economic Espionage Act (EEA) of 1996, which covers the theft of commercial, and not classified or national defense, information.

Huang, 45, was arrested on July 13 in Massachusetts where he lives and has worked since July 2009 for bio­fuels developer Qteros. The charges, which came via a still-sealed grand jury indictment, were filed in the Southern District of Indiana. Dow AgroSciences’ headquarters is in Indianapolis. As of late last week, Huang was still in custody and likely to be transferred to Indiana.

As discussed at a July 19 public hearing, Huang’s attorney, James P. Duggan, tells C&EN, the case centers on the disclosure of confidential Dow information on spinosyn insecticide biosynthesis in a review article first published online in late 2008 (Appl. Microbiol. Biotechnol. 2009, 82, 13). Huang is the lead author and his affiliation is given as China’s Hunan Normal University; his coauthors include three HNU scientists and a U.S. scientist also believed to have previously worked at Dow and now employed by biofuels developer Coskata.

Dow sells several of the fermentation-derived macrocyclic lactone insecticides under the Naturalyte name for the organic farming market. The company says it is “aware of an FBI investigation into a potential violation of our company’s intellectual property rights by a former employee. We are cooperating fully with the authorities. Because of the nature of the investigation, we are unable to comment further.”

Huang, who is a Canadian citizen and a resident alien in the U.S., had worked for Dow for about five years, Duggan says, until “separating” from the company in 2008. Duggan believes that Huang received his doctorate from the University of Tokyo. In the mid-to-late 1990s, Huang was a postdoctoral fellow in chemistry at Texas A&M University and later in biochemistry at Rice University, C&EN has learned.

In the process of writing the article, Huang is alleged to have passed along confidential information. “The grand jury found probable cause to believe that Defendant conveyed trade secret information to others in the People’s Republic of China,” U.S. attorneys wrote in a legal memorandum. They have requested that the court limit Huang’s access to the Internet and direct him not to contact certain possible codefendants or witnesses.

Penalties under EEA include fines of up to $500,000 per offense and imprisonment for up to 15 years. Just last month, former DuPont research chemist Hong Meng pled guilty to one federal count of trade secret theft related to downloading technology information to his personal computer (C&EN, June 14, page 25).

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