Judge awards $57 million in secrets theft
"Serenex's intellectual property constitutes its most valuable asset," North Carolina Judge Stephens wrote in his court order awarding, for theft of trade secrets by former employee chemist Yunsheng Huang, $57 Million in damages to the Durham-based drug development company recently acquired by Pfizer.
Serenex alleged that Huang stole experimental cancer treatment formulations and delivered them to business partners in China. As the case unfolded in Wake County last year, Huang fled to the People's Republic of China, according to court documents.
The corporate espionage case highlights a particular vulnerability of the Triangle's research-and-development firms. The financial value of their research depends on secrecy.
Serenex went to elaborate lengths to protect its trade secrets, including devising internal code names for proprietary chemical formulas to fool computer hackers..
But, as is often the case, the greatest vulnerability of trade secrets was not computer hackers but the "inside job" of a company employee.
Serenex was the victim of corporate espionage carried out by Yunsheng Huang, a former Serenex chemist and, it is alleged, Tongxiang Zhang, a member of the Chinese Communist Party who runs the Chinese companies to which Huang delivered the Serenex trade secrets.
It is doubtful that the company will ever recover any of the judge's award for the damages determined to have been suffered by this theft of trade secrets. It's no comfort to the shareholders that the company has this award against individuals it can't actually bring to court for the loss of what the judge termed its most valuable asset, its intellectual property.
Clearly, there's a need for effective proactive protection of trade secrets to ensure that such valuable assets are not able to be taken from a company in the first place, leaving management to chase a former employee internationally only to recover a worthless award of damages.
