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In GSK trade secrets case, appeals court backs short sentences against prosecutors’ wishes

Secret secrets are no fun, especially when they’re stolen trade secrets with big money on the line. But for two former GSK researchers, their sentences for trade secrets theft will remain somewhat brief.

After pleading guilty in 2018 to stealing trade secrets on potential cancer drugs, a unanimous panel of the U.S. Court of Appeals for the Third Circuit upheld the previously set sentences of former GSK researchers Yu Xue and Tao Li.

Xue has already served eight months, while Li has served a 59-day sentence. Prosecutors wanted 10 years for Xue and seven for Li, Reuters reports.

With the appeals ruling, the former GSK researchers will have fulfilled their sentences.

The court found that the defendants did not intend to harm GSK financially, so it decided against extending their sentences.

Until the pair were arrested in 2016, they along with others worked at GSK’s Upper Merion, Pennsylvania, facility and went on to form a pharma company called Renopharma. Xue, previously one of the top chemists at GSK who was believed to be the ringleader of the trade secrets ring, stole approximately 200 GSK documents and sent them to co-conspirators. At the time of arrest, Renopharma hadn’t made a profit or developed and sold products based on GSK’s information, the court’s opinion says.

In its case against the pair, the U.S. government asserted that the intended financial loss for their former employer exceeded $1 billion.

But the appeals court found that the defendants did not use the trade secrets to complete with GSK, nor to “solicit investment, develop competing products, or develop the same products that GSK was developing.” With that finding, the court upheld the sentences put in place by the District Court.

A fifth defendant was just convicted in the case in May, following the guilty pleas of the other four conspirators.