CSL Behring, Pharming Group Embroiled in Intellectual Property Lawsuit

USB Drive

Netherlands-based Pharming Group N.V. has denied any involvement in a potential theft of intellectual property belonging to CSL Behring from Joseph Chiao, who recently joined Pharming as medical director.

Pharming said it neither induced nor encouraged Chiao to breach any rules or seek any data from his former employer before he joined the Netherlands-based company. In a statement issued Wednesday, Pharming also stated that it has “not received or seen any proprietary CSL information from Dr. Chiao or any other source.”

Pennsylvania-based CSL Behring, a division of Australia-based CSL Limited, filed a lawsuit against Chiao in the US District Court for the Eastern District of Pennsylvania this week. Before jumping ship to Pharming, Chiao served as medical director for CSL Behring. The lawsuit accuses Chiao of taking 25 gigabytes of CSL’s internal data to Pharming. First reported by The Australian Financial Review, CSL said Chiao emailed files to his personal account as well as downloading data regarding therapy outcomes, product development and business strategies on a thumb drive. CSL accused Chiao of planning to use that at Pharming. According to the Sydney Morning Herald, that massive quantity of data amounted to more than 1 million pages of company information.

CSL has asked the courts to block Pharming and Chiao of using any information and is also seeking compensatory and punitive damages, the Herald reported.

CSL already won a small legal victory, the AFR reported, by obtaining a preliminary injunction that limited Chiao’s work at Pharming until the matter is settled. During a meeting with shareholders, CSL Chief Executive Officer Paul Perreault said the loss of the intellectual property was discovered by the company’s cybersecurity team.

CSL Behring develops treatments for coagulation disorders, immune deficiencies, hereditary angioedema (HAE) and other medical problems. When working with CSL Behring, Chiao, a specialist in rare blood disease, headed up the company’s HAE research. Pharming also has a focus on HAE. The company markets a product called Ruconest for acute HAE attacks.

CSL began looking into Chiao following his sudden resignation from CSL on Sept 23, the Herald reported. The company’s investigation uncovered that Chiao had been in secret talks to join Pharming for months ahead of his departure. CSL also said that Chiao offered to take information from his computer to Pharming when he jumped ship, the Herald reported.

In addition to HAE-related data, Chiao is also accused of taking other data related to CSL’s coagulation products, according to the report.

Pharming said it is cooperating with CSL in the cyber-interrogation of all of its internal systems and with U.S. judiciary authorities to “demonstrate its innocence of any wrongdoing.” In accordance with the injunction, Chiao has been suspended pending the outcome of the court hearing, Pharming said.

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