Fox Rothschild Obtains Complete Dismissal of Federal Trade Secret Theft Case

December 8, 2014Articles

On Friday, December 5th, the Department of Justice finally surrendered in a multi-defendant trade secret case being prosecuted in the Southern District of Indiana on behalf of complainant Eli Lilly and Company. (United States v. Cao and Li, Case No. 1:13-cr-150-WTL). Following 14 months of hard litigation — including a successful three-month fight with Lilly over trial-subpoenaed documents it did not want to give up, and successive discovery and Brady motions which increasingly forced disclosure of Lilly and Government errors, miscalculations, and poor decisions – the Government last week finally acceded to our long-standing demand that the case be dismissed in its entirety, and requested dismissal of all charges against all defendants, which the Court quickly granted.

Our client was the lead defendant, and he and his co-defendant are scientists who were charged with misappropriating allegedly confidential and proprietary Lilly information concerning molecular targets under research and development for cardiovascular, diabetes, and oncology drugs. They were arrested in their homes and then branded by the Government at their initial detention hearing in October 2013 as “traitors” who stole American trade secrets and transferred them to a Chinese pharmaceutical company. My colleague, associate Matt Adams, and I took over the defense immediately thereafter, and in a series of bail motions and hearings showed that these drug targets were publicly known and hence not confidential, or, as the Court put it in an order revoking detention, we revealed “holes in the Government’s case.” We first obtained their release to a halfway house, and then to house arrest. At the same time, we hammered both Lilly and the Government in multiple court filings and hearings, leading the Government at first to abandon their trade secrets theory in favor of more ambiguous wire fraud charges, and then finally to give up altogether. No plea of guilty to even a misdemeanor, not even a pretrial diversion or deferred prosecution – total dismissal was the demand and total dismissal was secured.

So, the U.S. Attorney’s Office moved to end arguably the highest-profile matter in that District, dealing a blow to the Indianapolis-based Lilly, which had invested substantial time and money standing up the case. This is, appropriately, a complete vindication of our client, as reported in Ed Silverman’s Pharmalot blog in the Wall Street Journal, as well as here, here, and here.