BioPharma

Human Longevity accuses its founder Craig Venter of stealing trade secrets

Genomic sequencing legend Craig Venter now stands accused of stealing trade secrets and attempting to poach employees by the very company he founded.

Craig Venter is the founder of Human Longevity Inc.

Craig Venter’s career has been the stuff of lore. He founded Celera Genomics to compete with the Human Genome Project, and made it onstage with Francis Collins, President Bill Clinton and Prime Minister Tony Blair to announce the genome had successfully been mapped. He later founded Synthetic Genomics, the J. Craig Venter Institute (JCVI) and Human Longevity Inc. (HLI).

Still, Venter has often been embroiled in controversy. After a rocky tenure at HLI, he stepped down as the company’s CEO in May. But the relationship took an even uglier turn last week when HLI sued JCVI, claiming Venter stole trade secrets and attempted to poach employees. The complaint notes:

“Following Venter’s termination from HLI, he abruptly left the HLI corporate offices with his HLI-owned computer. Venter immediately began using the HLI computer and server to communicate to the public, solicit HLI investors and employees…Even after his HLI termination, Venter used the HLI computer, accessed and sent HLI proprietary information and trade secrets.”

According to the suit, HLI uncovered these transgressions through the computer’s crash recovery program and other software. Either Venter didn’t know, or didn’t care, that his communications were being memorialized on HLI servers. If this scenario resembles a spouse uncovering incriminating texts, that’s not unusual.

“Trade secret cases like this are akin to divorces,” said Robin Feldman, who directs the Institute for Innovation Law at UC Hastings College of the Law, in a phone interview. “A joining of interests, begun with great hope and promise, disintegrates into bitter recrimination. And the parties know enough about each other to know where to aim.”

On first blush, HLI seems to have a pretty solid case; however, there may be some notable gray areas in California law. Venter signed a proprietary information agreement, which is quoted extensively in the suit. However, the agreement is only binding to the extent it complies with state law. The case largely revolves around customer lists, but JCVI may challenge whether they were actually trade secrets.

“When you have customer lists, or potential customer lists, or other trade secrets, the question is whether the information is known or readily ascertainable,” said Feldman. “Even if a small number of people in the industry know the information, under California law, it’s not secret.”

Assuming they were trade secrets, HLI will also have to prove they were disclosed. California law does not assume inevitable disclosure – wherein it’s expected that the person who took the information is going to use it.

In addition, poaching is not illegal in California. On the other hand, the backup data from the laptop is a major weapon for HLI.

“In California law, you do not need proof that someone physically took information,” said Feldman. “But the case gets a lot easier if the employee took a laptop or other physical files. This is a great cautionary tale for anyone leaving a company.”

Though the HLI complaint seems compelling, it is just the first salvo in the legal battle. There will probably be much more to come.

“In my experience, cases always look the strongest when the plaintiff files,” said Feldman. “Wait until we see what the defendant says.”