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Lilly trade-secret defendants released to home detention

April 28, 2014

Two former employees of Eli Lilly & Co. who had been held in a Volunteers of American facility following their indictment on trade-secret misappropriation charges have been released to home detention, according to an court order.

The court noted last week that after the government filed a second indictment March 12, the trade-secret theft claims against Guoqing Cao and Shuyu Li were changed to wire fraud, and aiding and abetting and conspiracy to commit wire fraud. They had been accused of stealing $55 million in trade secrets.

The “teeth” were taken out of the indictment by omitting the trade secret references, the court said, and the arguments that the two had taken Lilly’s “crown jewel” secrets and transferred them to China that was used to justify their lockdown status were “no longer applicable.”

The two defendants were also having trouble preparing their defense, according to court papers, because much of the evidence couldn’t be removed from their counsels’ offices because of its confidential nature, and the defendants were unable to leave the lockdown facility.

The court said the May 2014 trial date is no longer realistic because discovery in the case is still proceeding.

According to the original indictment, Cao and Li, both of whom are scientists with doctoral degrees, e-mailed sensitive information about nine experimental drug research programs at Lilly to an individual employed by Jiangsu Hengrui Medicine Co. Ltd., based in China.

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