Federal prosecutors have charged two former employees of Nationwide Children’s Hospital in Ohio with stealing trade secrets for the Chinese biotech company they founded in 2015, authorities said in an indictment unsealed Monday, STAT reported

Why it matters: Trade secret theft has been a recurring theme in escalating trade tensions between the US and China. The National Institutes of Health (NIH) has been working with federal investigators to probe grant recipients’ foreign ties, particularly with China.

  • Nationwide Children’s Hospital is one of the top-funded research institutions in the US.

“Nationwide Children’s Hospital devoted years of work and its own money to researching exosomes in order to promote honorable medical advances.”

—Benjamin Glassman, the US attorney in Ohio’s Southern District

Details: Yu Zhou, 49, and his wife, Li Chen, 46, worked in separate research labs at Nationwide Children’s Hospital in Columbus, Ohio until around two years ago. Together they founded biotech companies in both China and the US that marketed a technology called exosome isolation, which prosecutors say is based on a Nationwide Children’s trade secret. The couple was arrested in July.

  • Exosomes are small bubble-like groups of molecules that transport proteins and genetic information between cells.
  • Effectively isolating them could open doors to more effective drug delivery techniques. 
  • According to prosecutors, Zhou and Chen received nearly $1.5 million upon co-founding their US-based company. 

Briefing: MIT scientists decry crackdown on researchers of Chinese origin

Context: While the controversial US government crackdown on intellectual property theft and misappropriation of research grant funds is sometimes lumped together as a singular effort, the consequences differ. 

  • Researchers charged with misusing NIH grant funds or failing to disclose the extent of their foreign ties were fired from their posts at research institutions or universities
  • Those accused with intellectual property theft have faced more serious consequences, with the government going as far as to request the extradition of a scientist from Switzerland on charges that also included corporate espionage. 

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