Founders of Taiwan biotech firm sentenced for stealing trade secrets from Genentech

台灣生物科技公司創始人因竊取基因泰克商業機密被判刑

JHL Biotech CEO, COO stole trade secrets to build factory in Wuhan, lure US$101 million in investment


TAIPEI (Taiwan News) — Two co-founders of a Taiwan-based biotechnology firm were handed prison sentences on Tuesday (March 15) for conspiring to steal trade secrets from Genentech.

A San Francisco federal court sentenced Racho Jordanov, co-founder and former CEO of JHL Biotech, Inc. and Rose Lin, another co-founder COO, to one year and one day each in federal prison, according to the U.S. Attorney’s Office of the Northern District of California. They both pleaded guilty to conspiring to commit trade secret theft and wire fraud.

JHL Biotech, Inc., which last year changed its name to Eden Biologics, Inc., is a biopharmaceutical startup based in Zhubei City in Taiwan's Hsinchu County. According to the plea agreement, between 2011 and 2019, Jordanov hired former Genentech employees who provided confidential and proprietary documents from the company to speed up and reduce the costs of making generic versions of Genentech products.

The documents provided by the former Genentech employees enabled JHL Biotech “to cheat, cut corners, solve problems, provide examples, avoid further experimentation, eliminate costs, lend scientific assurance, and otherwise help JHL Biotech," according to the U.S. Attorney's Office. Between 2014 and 2018, Jordanov personally used and instructed others to use Genentech's confidential documents and information on its technology transfer procedures and processes to build a manufacturing facility in Wuhan, China.

In 2014, Lin arranged for Xanthe Lam, a principal scientist working full-time at Genentech, to secretly work as the head of formulation for JHL Biotech without signing a contract. Lin helped to conceal the fact that Lam was working for JHL Biotech by paying a consultancy fee through her husband, Allan Lam, and directing staff to communicate with Xanthe via Allan's email.

In 2016, Jordanov and Lin signed a partnership agreement with French pharmaceutical company Sanofi S.A., which agreed to invest US$101 million in JHL Biotech. According to prosecutors, the two falsely told the French firm that JHL Biotech had lawfully obtained intellectual property that it had, in fact, "(stolen) or received without authorization."