US charges ex-Monsanto employee with stealing trade secrets for China

The US Department of Justice ( DoJ) has charged a former Monsanto employee with committing economic espionage and trade secrets theft.

In an announcement yesterday, November 21, the DoJ alleged that Haitao Xiang, 42, had stolen a proprietary algorithm from Monsanto.

Xiang had been an employee of Monsanto and its subsidiary, The Climate Corporation, from 2008-2017.

During this time, the company developed a digital, online farming software platform that was used by farmers to collect, store and visualise field data to increase and improve agricultural productivity for farmers.

A “critical” component of the platform was a proprietary, predictive algorithm named the Nutrient Optimizer.

In June 2017, a day after Xiang quit his job, he was arrested at a Chicago airport for having multiple copies of the algorithm. He had left his job at Monsanto just the day before and had booked a one-way flight to China.

Monsanto said the Nutrient Optimizer was its IP and a valuable trade secret.

Assistant attorney general for the country’s National Security department, John Demers, said the criminal complaint alleges that this case is another example of the Chinese government using its Thousand Talent Plans (TTP) to encourage employees to steal IP from their US employers.

Established in 2008 by China’s government, the TTP seeks to recognise and recruit leading international experts in scientific research, innovation and entrepreneurship.

But, it has been hailed as a threat to national security by the US Senate Committee on Homeland Security and Governmental Affairs, describing it as a programme that incentivises participants to steal IP.

“Xiang promoted himself to the Chinese government based on his experience at Monsanto. Within a year of being selected as a Talent Plan recruit, he quit his job, bought a one-way ticket to China, and was caught at the airport with a copy of the company's proprietary algorithm before he could spirit it away,” Demers said.

Xiang has been charged on one count of conspiracy to commit economic espionage, three counts of economic espionage, one count of conspiracy to commit theft of trade secrets and three counts of theft of trade secrets.

If convicted, each espionage charge carries up to 15 years in prison and a $5,000,000 fine.  Each theft of trade secrets charges carries up to 10 years in prison and a $250,000 fine.

John Brown, the assistant director of the Federal Bureau of Investigation ( FBI) said the Nutrist Optimizer represents “both the best of American ingenuity and why the Chinese government is so desperate to steal it for themselves”.

Special agent for the FBI, Richard Quinn, said stealing trade secrets can destroy a business.

“When done at the behest of a foreign government, it threatens our nation’s economic security because it robs our companies of their market share and competitive advantage,” he said.

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