The court documents read like something out of a Coen brothers film. Employees of the Chinese agricultural company Dabeinong Technology Group Co. (DBN) and a subsidiary sneaked through midwestern cornfields, U.S. prosecutors allege, stealthily gathering patented corn that they attempted to smuggle out of the United States in microwave popcorn boxes. Over a span of years, the associates allegedly came up with various ways of stealing coveted seed lines developed by agricultural giants DuPont Pioneer, Monsanto, and LG Seeds—a feat that, had it succeeded, would have sidestepped years of research.
The case is remarkable in its scope. Experts on Chinese agriculture say that it also reflects real obstacles to innovation within China.
The U.S.-based defendants roamed rural Illinois, Indiana, and Iowa in rental cars, digging up corn seedlings, stealing ears of corn, and stealing or illegally obtaining packaged seed, according to court documents. In 2011, a DuPont Pioneer field manager spotted one alleged thief on his knees digging in a field, as a collaborator waited in a nearby parked car. The defendants stored hundreds of ears of corn in a storage locker, where a manager warned them that their stash might attract rodents. They eventually purchased 13 hectares of Iowa farmland in an apparent attempt to conceal their activities.
FBI agents tracked the group for about a year, according to court documents, eventually indicting the alleged ringleader, Mo Hailong, and five partners this past December. Last week, U.S. prosecutors arrested and charged another suspect in the case. Mo Yun, a researcher with a “PhD in an animal science field,” according to court records, heads up DBN’s research and technology division in Beijing. All seven defendants have been charged with being part of a conspiracy to steal trade secrets.
Mo Yun is the wife of DBN Chair Shao Genhuo and the sister of alleged ringleader Mo Hailong. Her arrest suggests that agents have traced the operation back to the scientists in China who would have handled any seed lines obtained from the United States. Mo Yun, who oversaw DBN’s seed breeding efforts in China, was “in charge of the specifics from the home country side,” DBN’s chief operating officer wrote in an instant message to Mo Hailong that was intercepted by FBI agents.
The germplasm, or genetic makeup, of corn lines is a valuable form of intellectual property and is carefully guarded by seed companies. Through extensive research, breeders develop inbred seed lines that have particular traits. They can then be crossbred with other inbred lines to create hybrid lines that are sold to farmers.
In China, Mo Yun and her colleagues operated in an atmosphere that works against the homegrown development of such seed lines, say observers of China’s agricultural research programs. China’s plant breeding research is mainly conducted in the public sector, and researchers are not always in close contact with the companies that sell and trade seeds. Less money is available for the private sector, says Huang Jikun, director of the Chinese Academy of Sciences’ Center for Chinese Agricultural Policy in Beijing. “The current institutional setting and incentive system” is a barrier to innovation, he notes.
Plant breeding research elsewhere in the world has benefited from advances in genomics and molecular markers, but plant breeding scientists in China do not work closely with researchers in those areas, says Carl Pray, an agriculture, food, and resource economics expert at Rutgers University in New Brunswick, New Jersey, who has worked in China. “Only a few private Chinese companies have developed major biotech and plant breeding research capacities,” he adds. Rather than labor in an atmosphere stymied by poor investment, fragmented research groups, and weak intellectual property protection, the defendants may have seen obtaining patented seed lines as a shortcut. The United States has a climate and crop growing conditions that are similar to China’s, making it a “natural place to look,” Pray says.
In 2012, a court document alleges, Mo Hailong and two other defendants “attempted to ship approximately 250 pounds of corn seed, packaged in 42, 5-gallon zip-lock bags contained in 5 separate boxes,” from Illinois to a logistics company in Hong Kong. Another defendant is said to have stashed “374 small manila envelopes each containing small quantities of corn seed within two boxes of Pop Weaver brand microwave popcorn,” which he stowed in his checked luggage on a flight to Beijing.
Mo Yun, who would have overseen efforts to ascertain the germplasm of any stolen seed lines in Beijing, allegedly participated from behind the scenes. Agents intercepted instant messaging chats in which she and her brother discussed which seeds to collect.
Later, she told her brother that some of the seeds he had sent were performing well. She added that a DBN scientist had been asked to test the DNA of the seed lines deemed most promising, according to court documents.
DuPont Pioneer has developed a popular corn line in China in partnership with a Chinese company. But because of the Chinese government’s concern about foreign control of China’s seed industry, Pray says, officials have allowed the company to commercialize only one hybrid cultivar. Those tight controls mean that little of the company’s intellectual property finds its way into China. Pray says “it could be that if the Chinese government was not so effective at keeping out U.S. companies and U.S. maize lines, [Mo Yun] and her brother could have taken these lines from DuPont in China rather than violating U.S. law and taking U.S. trade secrets from the U.S.”
Mo Hailong and several other defendants have entered not guilty pleas. Attorneys for the accused could not be reached for comment.