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Seeds can become issue of intellectual property theft

By Bryan Richardson

Seeds aren’t very large, but when they cost millions to produce, stealing them is serious business.

Weiqiang Zhang of Manhattan and Wengui Yan of Stuttgart, Ark., were charged last week with conspiracy to steal trade secrets after allegedly providing stolen rice seed samples to a Chinese delegation visiting the U.S. this year.

The seeds were property of Ventria Bioscience, a company based in Fort Collins, Colo., that develops genetically modified rice to grow proteins for medical and pharmaceutical uses.

Dirk Maier, head of the K-State grain science and industry department, said Zhang and Yan are being accused of a crime in the same category as breaking into General Motors, Google or Apple and stealing an product being developed.

“It’s the same as corporate espionage,” he said. “People may not look at it that way, but indeed it is.”

Zhang, 47, worked as an agricultural seed breeder at a Ventria facility in Junction City, starting in 2008.

According to the criminal complaint, Ventria’s research investment to generate seeds has been between $3 million and $18 million, and its technology investment approximately $75 million.

Maier said these seeds are being developed for future sales.

“When you develop seed, whether you are a public university like we are or a private company, you are developing a product that’s intellectual property,” he said.

Daryl Stouts, president of the Kansas Wheat Alliance, said biotech companies tend to spend more on seed development.

“The investment is probably 10 times as much as a traditional (breeder), and it probably takes even longer,” he said. “Most of the time, there’s not enough value to justify the cost, which is why companies fail.”

Stouts said it costs between $1.2 million and $1.4 million to develop a new wheat variety through traditional breeding, and typically involves 10 years of development.

“You have $10 to $15 million wrapped up in something before you get it out,” he said.

Stouts said he hasn’t worked with Ventria, but the biotech companies he’s dealt with typically don’t have theft on their radar.

“Anything I’ve done with companies like that, they’re more concerned about pollen escaping,” he said. “Probably not real high on their list is people walking out with seeds in their pocket.”

“It probably happens more than people typically realize,” Maier said of theft.

Maier said the first several years of initial work takes place in labs and greenhouses, which limits the amount of people involved.

Maier said test plots occur in areas such as the agronomy department’s farm on Kimball Avenue, but it would take inside information to know what type of seeds are being used.

“Most of the time when you’re driving through a countryside, you don’t know what’s growing,” he said. “It’s pretty anonymous.”

Maier acknowledged that K-State has vulnerabilities to protect itself from this type of “illegal and unethical” action.

“In general, the fields are not surrounded by high security fences and there aren’t security guards wandering around campus protecting this stuff,” he said.

Stouts said it isn’t very difficult to take seeds.

“How easy is it to get seeds? Find them and put them in a cup full of dirt,” he said.

Security concerns are a reason for limiting the number of people with access and knowledge, particularly with private biotech companies.

According to the criminal complaint, Scott Deeter, Ventria president and CEO, told FBI agents that approximately six employees had magnetic card reader access to the temperature controlled environment where the master and development seeds were stored.

Deeter said they would have known the differences as well as the locations of particular seeds.

He said Zhang had this level of access but didn’t regularly work at the facility.

Stouts said federal government regulation of biotech companies includes testing permits that dictate where testing will take place.

He said the work of companies like Ventria require a higher level of security.

“The possibility of espionage and stealing is high,” he said. “Probably not so much in this country because everybody knows what everybody has.”

Stouts said the patents that companies have for their work usually make it easier for stolen material to be discovered.

In the Zhang case, an expert rice geneticist at the U.S. agriculture department examining pictures of the seed envelopes found with the delegation packets recognized words and initials on the labels as products of Ventria.

Ventria is the sole source of two particular types of seeds that were found.

Tests by a biological diagnostics laboratory in Wisconsin confirmed the source of the seeds.

Stouts said the Zhang case could be a sign of more theft attempts in the future.

“It’s pretty unusual, but it’s probably something we’re going to see more rather than less,” he said. “As people start to value genetics in seeds and plants, it’s certainly going to be more tempting.”

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