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Pfizer Says Employee Stole Files With Covid Vaccine Secrets (3)

Nov. 24, 2021, 2:54 PMUpdated: Nov. 24, 2021, 7:29 PM

Pfizer Inc. is alleging a “soon-to-be-former employee” misappropriated thousands of files, including documents with trade secrets related to its Covid-19 vaccine, in a California federal court lawsuit.

Chun Xiao (Sherry) Li allegedly uploaded more than 12,000 files including “scores” of documents with confidential information to a Google Drive account, Pfizer alleged in a complaint filed Tuesday in the U.S. District Court for the Southern District of California. The documents are said to pertain to a broad range of topics, including analysis of vaccine studies, operational goals, and development plans for new drugs.

Pfizer said in the complaint it believed Li was going to Xencor Inc. and that she provided a “decoy” laptop when confronted about subsequent downloads of the information.

Pfizer is seeking a temporary restraining order to prevent Li from using, disclosing, transmitting or altering any confidential information she possesses. It also wants the court to order Li to provide Pfizer’s outside counsel access to her personal Google Drive accounts and all her computing devices.

“Pfizer takes the safeguarding of sensitive and confidential information very seriously. Protecting that information is critical to scientific innovation, ultimately enabling us to deliver breakthroughs for patients,” a company spokesman said.

Trade secrets present a thorny issue for the debate around waiving Covid-related IP rights. Disclosure of trade secrets could aid overseas manufacturers in producing copycat versions of vaccines created by Pfizer, which has spoken out against an international waiver on intellectual property protections on Covid-19 treatments and vaccines.

Li began working for Pfizer’s Global Product Development Group in China in 2006 before transferring to the San Diego area in 2016, the complaint said. She signed a confidentiality agreement as part of her employment, Pfizer said.

Li didn’t immediately responded to a request for comment. A spokesman for Xencor noted the company isn’t a party to the lawsuit and declined further comment.

Employees Monitored

Pfizer already had disabled USB access in 2019 to prevent unauthorized file transfers. In October 2021 it also implemented a technology that monitors when employees upload files to cloud-based platforms like Google Drive, according to the complaint. It said it detected Li transferring 12,000 files from her Pfizer laptop to an online Google Drive account in a three-day window in October.

A digital review of Li’s Pfizer email revealed she had been interviewed and received an employment offer from Xencor, Pfizer said. When confronted Li admitted transferring the files and claimed she did so to organize her files offline for her personal use but hadn’t copied them or sent them elsewhere, the complaint alleged.

Pfizer alleged that between conversations with Pfizer forensics personnel held hours apart, Li deleted all of the files saved on her Google Drive account. She allegedly disclosed the deletions in the second meeting, at which point Pfizer asked for her to hand over her external hard drive and personal laptop.

The forensic investigation revealed the laptop she turned in wasn’t the one that downloaded the 12,000 files, largely because it was lightly used during the week of the downloads, Pfizer said. The examination showed a significant number of documents were deleted from her hard drive before she turned it in, according to the complaint.

The case is Pfizer Inc. v. Li, S.D. Cal., No. 3:21-cv-01980, complaint filed 11/23/21.

—With assistance from Ian Lopez (Bloomberg Law) and Angelica LaVito (Bloomberg News).

(Updates with Xencor declining to comment.)

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editor responsible for this story: Renee Schoof at rschoof@bloombergindustry.com

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