Piracy In The Fields: Agricultural Trade Secrets A Tempting Target
As a group of visiting scientists prepared to board a plane in Hawaii that would take them back home to China, U.S. customs agents found rice seeds in their luggage. Those seeds are likely to land at least one scientist in federal prison.
Agriculture today is a high-tech business, but as that technology has developed, so has the temptation to take short cuts and to steal trade secrets that could unlock huge profits. The FBI calls agricultural economic espionage “a growing threat” and some are worried that biotech piracy can spell big trouble for a dynamic and growing U.S. industry.
Crime in the lab
On the western outskirts of Junction City, Kansas, just off of Interstate 70, sits an unassuming industrial building. The white lettering on the blue sign out front reads, Ventria Bioscience and driving by, it is hard to believe the nondescript building houses a cutting-edge research facility.
Scientists at Ventria developed a way to genetically-engineer rice to grow human proteins for medical uses. The process places a microscopic piece of synthetic DNA into the rice genome, which tells the growing plant to make the desired protein as it matures.
Ventria President and CEO Scott Deeter says the idea goes back 25 or 30 years, but his company was the first to commercialize it.
“It’s really been the dream of our industry for a long time,” Deeter says. “The challenge has really been the yield of the target product in the plant material was never high enough to make it cost-effective.”
The company invested some $85 million in developing the technology, Deeter says, and he thinks it has the potential to generate upwards of $1 billion in annual revenue. But that potential could be undermined by foreign piracy.
Former Ventria rice breeder Weiqiang Zhang is awaiting sentencing in federal court in Kansas City for conspiring to steal the company’s trade secrets. He hosted the delegation of visiting scientists from a Chinese crops research institute in whose luggage authorities found the rice seeds in 2013. The delegation was allowed to return to China without being charged.
Had they succeeded in stealing the gene-spliced rice, the scientists may have been able to reverse-engineer it and ultimately undercut Ventria’s market. Deeter says it could have driven his company out of business.
Crime in the field
In 2011, a field manager for agribusiness giant Pioneer Hi-Bred International found a man on his knees in an Iowa field, digging up seed corn.
It was Mo Hailong—also known as Robert Mo—according to court documents. Hailong, who is originally from China, pleaded guilty in January 2016 to conspiring to steal trade secrets involving corn seed developed by Monsanto and Pioneer.
Jason Griess, the assistant U.S. Attorney for the Southern District of Iowa, says the investigation began as a simple matter of a farmer being suspicious about something he saw and reporting it. Digging up seeds in an open field may be simple, but it is difficult to put a precise value on the loss in cases involving trade secrets.
“Without question, the value of the seed technology in our case was absolutely off the charts,” Griess says. “There’s simply no disputing by anyone how valuable this is.”
Intellectual property is often hard to protect, no matter what form it takes – films, books, consumer products. The technology used in our food system, however, presents a unique challenge.
“Where the commodity in question is grown in open fields, it’s sometimes difficult,” Griess says. “And this case is a testament to that.”
The court cases in Kansas and Iowa are the only ones Griess is aware of that have been criminally prosecuted, but he says there have been a few other investigations.
“There are countries in this world that are in dire need of this technology, and one of the ways you go about obtaining it is to steal it,” Griess says.
Ties to China
Theft of intellectual property costs the U.S. economy hundreds of billions each year, according to a recent report from the Commission on the Theft of American Intellectual Property, a Washington D.C.-based ad-hoc panel formed to study intellectual property theft. (PDF) China, the authors say, is the biggest offender.
“In the last five to seven years, the majority of the cases the government has brought have involved espionage by the Chinese,” says Peter Toren, an intellectual property attorney in Washington, D.C. Toren was not involved in the IP Commission Report, but as a federal prosecutor in the Computer Crime and Intellectual Property Section of the Justice Department he won one of the first cases ever prosecuted under the Economic Espionage Act of 1996.
It should come as no surprise, he says, that scientists in China would be interested in technology related to agriculture.
“Whether it’s in agriculture or any other field, they need access to the technology,” Toren says. “And, certainly, if you have 1.4 billion people, access to better seeds is something that you’re going to be very interested in.”
Ventria’s Scott Deeter hopes that China will crack down on these cases, and that scientists across the world will respect each other’s innovations.
“I think the world is better off with that, I mean you get more creativity,” Deeter says. “If you make creativity a commodity and something to be stolen, and don’t respect it, you won’t have very much. It will go away. And that’s the risk.”
For now, Deeter says his company has to continue to innovate in order to stay one step ahead of the thieves.