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Lilly scientists stole $55M in secrets, indictment alleges

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Three former employees of Eli Lilly and Co. allegedly transferred trade secrets that Lilly values at more than $55 million to a competing Chinese drug company, according to an indictment unsealed Tuesday in federal court.

The indictment charges two Carmel residents, Guoqing Cao and Shuyu Li, with seven counts of theft and conspiracy to commit theft. It also describes the actions of a third man, referred to only as Individual #1, who also played a part in the alleged crime.

According to the indictment, Cao and Li, both of whom are scientists with doctoral degrees, e-mailed sensitive information about nine experimental drug research programs at Lilly to Individual #1, who is employed by Jiangsu Hengrui Medicine Co. Ltd., based in China.

U.S. Attorney Joe Hogsett and his deputy, Cynthia Ridgeway, characterized the alleged theft as a crime against the nation.

“If the superseding indictment in this case could be wrapped up in one word, that word would be ‘traitor,’” Ridgeway argued before Magistrate Judge Mark J. Dinsmore on Tuesday.

“Stolen trade secrets account for billions of losses for American companies throughout our nation,” Hogsett told reporters outside the federal courthouse downtown.

Cao and Li were arrested Oct. 1 in Indianapolis and appeared Tuesday in U.S. District Court in Indianapolis—handcuffed and dressed in striped jail uniforms.

The U.S. Attorney’s Office in Indianapolis sought a judge’s order to continue detaining the two men, arguing that they were flight risks and a “financial danger” to Lilly.

Bill Heath, the head of global product development for Indianapolis-based Lilly, testified at the hearing that the men’s knowledge could help Hengrui duplicate Lilly’s research. Those trade secrets involve drugs being developed to treat cardiovascular disease, diabetes and cancer.

“Because of their know-how and their continued access to the information, they would be in a position to direct others how to use the information,” Heath said.

Attorneys for each of the men argued that they should be let go, and that they would surrender their passports while the case against them proceded.

Scott Newman, a former Marion County prosecutor who is representing Li, said the U.S. Attorney’s office had failed to prove its case that the two men needed to be detained further.

“No, the word is not treason; the word is overreach,” Newman said.

Dinsmore eventually ruled that the two men would remain in custody until trial.

Lilly assisted the FBI and the U.S. Attorney’s office in the investigation of Cao, Li and Individual #1. Individual #1 is still under investigation, according to FBI agents, and has not been arrested.

In a statement, Lilly General Counsel Michael Harrington said the trade secrets allegedly stolen all involve early-stage research, and so their alleged theft does “not significantly jeopardize our overall research and development pipeline.”

“Lilly will aggressively pursue every legal remedy to protect and safeguard its scientific discoveries,” Harrington added. “This includes assisting law enforcement in prosecuting and holding accountable those attempting to steal Lilly’s valuable research.”
 
 

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  1. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

  2. Seventh Circuit Court Judge Diane Wood has stated in “The Rule of Law in Times of Stress” (2003), “that neither laws nor the procedures used to create or implement them should be secret; and . . . the laws must not be arbitrary.” According to the American Bar Association, Wood’s quote drives home this point: The rule of law also requires that people can expect predictable results from the legal system; this is what Judge Wood implies when she says that “the laws must not be arbitrary.” Predictable results mean that people who act in the same way can expect the law to treat them in the same way. If similar actions do not produce similar legal outcomes, people cannot use the law to guide their actions, and a “rule of law” does not exist.

  3. Linda, I sure hope you are not seeking a law license, for such eighteenth century sentiments could result in your denial in some jurisdictions minting attorneys for our tolerant and inclusive profession.

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