This article has been updated with a comment from the J. Craig Venter Institute.
NEW YORK (GenomeWeb) – Human Longevity (HLI) is suing the J. Craig Venter Institute (JCVI) and a number of unknown defendants over the misappropriation and use of trade secrets passed along by Craig Venter, the founder of both the company and the institute that bears his name.
In a complaint filed last Friday with the US District Court for the Southern District of California, Human Longevity alleges that upon his termination from HLI on May 24, Venter took a company-owned laptop with trade secrets and passed on protected information to the Venter Institute, of which he is chairman and CEO. HLI also claims that the institute is working on a product that will compete with its own business.
According to the complaint, Venter was CEO of Human Longevity from 2014 until January 2017, when he became the firm's executive chairman and signed a "proprietary information and inventions" agreement. He assumed the role of interim CEO in November of 2017 until his employment was terminated in May of this year. During his time at HLI, Venter used a company-owned laptop computer, the contents of which were backed up in the cloud, and consistently used his JCVI email address rather than his HLI email to conduct company business, the complaint states.
In the spring of this year, Venter "withheld critical information from the board and the HLI investors regarding the conduct of an HLI key executive which would likely result in termination," the complaint says. Further, in May, Venter had an HLI-paid counsel "draft a Venter-favorable employment contract" and appointed a new interim president without conferring with the HLI board first.
On May 24, the HLI board "considered a rushed investor deal which Venter presented to them only less than two weeks earlier," the terms of which the board considered one-sided. The deal would have provided financial incentives to Venter and offered the new investor rights that had already been granted to another party, according to the complaint. "At that point, the HLI board voted to terminate Venter from HLI," it states.
Following his termination, Venter left the HLI offices with the company-owned laptop and "immediately began using the HLI computer and server to communicate to the public, solicit HLI investors and employees," the complaint says. In a Twitter message on May 24, Venter said that he was retiring from HLI and returning to JCVI.
His access to the HLI server and HLI emails was disabled the next day, but the company alleges that "even after his HLI termination, Venter used the HLI computer, accessed and sent HLI proprietary information and trade secrets," including communications involving Series C and Asia JV Series A documents.
In addition, HLI alleges, he "tried to solicit to JCVI the very investor who pulled out of the HLI deal," citing an email in which Venter says he would like to work with the investor through the Venter institute, adding that "my brand is only owned by me and [the] preventative medicine movement has hardly started."
HLI also claims that Venter met with nine HLI employees after his termination and "intended to solicit these employees to JCVI to compete directly with HLI," adding that one employee, senior principal scientist Weizhong Li, announced last week he would be joining JCVI.
HLI further claims that JCVI "received and is using HLI's trade secrets in an attempt to set up a business to directly compete with HLI." Specifically, it alleges that the institute is developing a program that will compete with HLI's Health Nucleus product and is seeking research and business partnerships with others, for example, the University of California, San Diego, to develop this business.
It also claims that JCVI is seeking financing deals, using confidential and proprietary deal terms, contact information, and customer information from HLI, and that it is soliciting HLI customers and a potential customer whose contact information is not publicly available.
HLI is seeking a jury trial and asked for general, special, and punitive damages of an unspecified amount. In addition, it asked for an injunction to prevent JCVI from using or disclosing HLI's trade secrets, and for seizure of the laptop and any other electronic devices used by JCVI, in order to audit it and remove the trade secrets.
JCVI said in a statement that HLI's claims are baseless and contain several factual errors. "HLI is one of many companies to have been spun out of the not-for-profit research efforts of the J. Craig Venter Institute and its founder, J. Craig Venter, a renowned genomics pioneer who remains a shareholder in HLI," JCVI said. "We intend to vigorously defend against these allegations as the legal process advances."