SAN FRANCISCO – An Alameda company alleges two former employees used trade secrets to start a competing company of their own.

AllCells LLC filed a complaint on Dec. 23 in the U.S. District Court for the Northern District of California against Jack Zhai, James Lee and Cepheus Biosciences Inc. alleging misappropriation of trade secrets and other counts.

According to the complaint, the plaintiff alleges that it has taken substantial measures to protect its confidential information and that Zhai and Lee were required to each sign and abide both the Employee Confidentiality Agreement and the Employee Handbook during their employment with the plaintiff. However upon their termination/resignation, the suit states they were discovered to have downloaded large amounts of plaintiff's data containing trade secrets and confidential information prior to their last day of employment. The plaintiff alleges Zhai and Lee utilized plaintiff's data to put up a company of their own, Cepheus Biosciences Inc., which directly competes with plaintiff.

The plaintiff holds Zhai, Lee and Cepheus Biosciences Inc. responsible because the defendants allegedly used and continues to use plaintiff's confidential information for their benefit, including soliciting plaintiff's customers, and breached their duty of loyalty by starting a new business to directly compete against plaintiff.

The plaintiff requests a trial by jury and seeks judgment in its favor, compensatory damages, exemplary damages, attorneys’ fees and costs, preliminary and permanent injunction, interest, and further relief as the court deems just. It is represented by Robert S. Shwarts, Michael D. Weil, Catherine Y. Lui and Johanna L. Jacob of Orrick, Herrington & Sutcliffe LLP in San Francisco.

U.S. District Court for the Northern District of California Case number 3:16-cv-07323

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U.S. District Court for the Northern District of California
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