Pfizer acts quickly to tackle alleged covid-19 vaccine trade secrets misappropriation
The covid-19 vaccine innovator has been able to take quick action against suspected misappropriation of proprietary information, apparently because of its effective mechanisms for monitoring use of its trade secrets
Pfizer has filed a US lawsuit seeking to restrain a former employee who it accuses of misappropriating large quantities of proprietary information relating to its covid-19 vaccine, as well as monoclonal antibodies avelumab and elranatamab.
The suit not only has implications for the lucrative mRNA vaccine-related trade secrets. It is the latest in a growing number of trade secrets misappropriation allegations in the life sciences, many of which relate to biologic drugs.
While there are effective remedies against the misuse of proprietary information, innovative companies must also have a carefully considered strategy in place to protect their trade secrets. In this case, Pfizer spotted the allegedly illegal behaviour quickly and has been able to bring a legal action more swiftly than in previous trade secret disputes.
The claims relate to Chun Xiao Li, a long-time Pfizer product development statistician who left the company yesterday, one day after the lawsuit was filed. Pfizer alleges that she and five unnamed individuals are responsible for misappropriating roughly 12,000 files that contain valuable confidential and trade secret information relating to its covid-19 vaccine, Comirnaty, and cancer treatments avelumab and elranatamab.
Pfizer’s security team became aware of a large transfer of files to a Google Drive account in late October. While the company carried out its investigation, Li announced her intention to leave Pfizer, refusing an exit interview and declining to confirm whether she had a new employer. Pfizer believes she has received a job offer from antibody and cytokine therapeutics company Xencor.
Pfizer filed its action at the District Court for the District of Southern California just prior to Li’s leaving date. The company is seeking an injunction against Li to prevent her using, disclosing or transmitting its proprietary information. It requests that the court directs Li to grant Pfizer’s attorneys access to her personal devices and Google Drive accounts, and to award reasonable costs. The court has already granted a temporary restraining order.
The claims regarding covid vaccine trade secrets will draw significant attention to the case, given the commercial value of the jab and the crucial importance of proprietary information for its production.
However, the true significance of the complaint is that is another instance of an emerging trend of pharmaceuticals trade secrets disputes. A large number of such cases seem to relate to biologics, such as the two monoclonal antibodies at issue in this action.
Just days before Pfizer’s filing, BioMarin Pharmaceuticals accused a former quality assurance engineer of misappropriating trade secrets for use in his new employment at rival gene therapy innovator, Sangamo Therapeutics.
In another high-profile dispute, Genentech took action against several former employees and JHL Biotech for misappropriation that allegedly helped JHL to develop biosimilar versions of the company’s Pulmozyme, Rituxan, Herceptin and Avastin. In 2019, Genentech settled its civil suit against JHL on highly favourable terms, with the Taiwanese biotech agreeing to abandon its four biosimilar projects. Several of the individuals involved were also on the receiving end of successful criminal prosecutions.
In 2017, Amgen brought a suit against Coherus BioSciences and its manufacturing partner KBI Biopharma, while 2021 has seen AbbVie accuse adalimumab biosimilar producer Alvotech of trade secret misappropriation (its action was later dismissed).
It is not surprising that biologics should be a hotspot for these disputes. They are more difficult to develop and manufacture than small molecule drugs, so trade secrets offer an important competitive advantage for companies in the space. There is also a great deal of employee migration towards the crop of biosimilar manufacturing and development start-ups that are springing up around the world.
Genentech’s success in enforcing its US rights is reassuring to trade secrets owners. The Defend Trade Secrets Act of 2016 is a powerful tool for rights holders. Criminal prosecutors appear to be taking a tough stance on the issue. Meanwhile, International Trade Commission actions under Section 337 have proved a valuable alternative enforcement route.
Significant actions must be taken to protect trade secrets. This not only helps to prevent misappropriation in the first place, but to satisfy the courts that sufficient steps were taken to secure proprietary information in cases where remedies are needed.
What is striking about the Pfizer complaint is the impressive list of trade secret protection policies that it lays out: formal training; reminders from management about confidentiality; staff confidentiality agreements; exit interviews; the work of in-house forensics specialists; and extensive tracking of activity on company devices.
This may be a reflection of the increasing importance ascribed to trade secret protection by executives in the life sciences and other industries. Pfizer’s strategy has allowed it to detect immediately activity it deemed suspicious and – in contrast to some comparable disputes – to bring a lawsuit against the alleged wrongdoers almost immediately after the acts in question.
Adam Houldsworth
Author | Life sciences reporter
adam.houldsworth@lbresearch.com
iam-media.com |
