In trade secrets case, ex-Genentech staffer and husband get 6-month prison sentences

After pleading guilty to the crime, it's time to do the time.

A year after a former Genentech staffer and her husband pleaded guilty to stealing trade secrets from the drugmaker, the two have received six-month prison sentences, plus fines of more than $10,000 each.  

In the years-long case, Xanthe Lam, a former principal scientist for Genentech, and her husband Allen Lam last summer pleaded guilty to conspiracy to commit theft of trade secrets, plus multiple counts of conspiracy to commit computer fraud and abuse, plus other charges, according to documents from the United States District Court in the Northern District of California.

The two must surrender to begin serving their sentence no later than April 10, 2023, the documents show. After release, the defendants will be on supervised release for three years.

In the high-profile case, government prosecutors said the couple stole confidential intellectual property related to Genetech’s top-sellers Rituxan, Herceptin, and Avastin, as well as cystic fibrosis inhalation Pulmozyme. The two then passed the secret info to Taiwanese firm JHL Biotech (now Eden Biologics), to aid in its development of copycats, the suit said.

The Lams weren’t the only schemers in the game, but compared to the other conspirators, the Lams got off relatively easy. Two co-founders of JHL, ex-CEO Racho Jordanov and ex-COO Rose Lin, were each sentenced to one year and one day in prison. Those two will be on suspended release for 3 years after serving their sentence.

The scheme started before JHL Biotech was founded and continued through 2019, the government said. At JHL, the company specifically recruited former Genentech staffers to steal confidential information. While JHL didn't use all of the stolen documents, the practice was “tolerated” and no efforts were made to discourage staffers at JHL from using the information, allowing the company to cut corners, according to authorities.

Xanthe Lam came into play when Lin arranged for her to covertly work as head of formulation at JHL, knowing she was simultaneously working full-time at Genentech. Lin paid her through Allen Lam, allowing Xanthe to work without entering a direct contract. Further, others at JHL maintained contact with Xanthe through her husband’s email address.

The Lams will be back in court on December 5, 2023, for a progress report. Payment for their fines is due no later than 30 days after the entry of judgment, which is dated October 18.