WSU sued over trade secrets

SPOKANE – The research into a new genetic test for beef tenderness may have been stolen by Washington State University, according to Selah-based Tenet Beef.

A federal lawsuit was filed against WSU and professor Zhihua Jiang by Tenet Beef in the U.S. District Court of Eastern Washington on April 2. They are asking for injunctive relief and a jury trial to determine if WSU violated federal law to protect companies’ trade secrets and the state’s Public Records Act.

An amount of money for damages was not specified, but the company is seeking it and their attorney fees.

Tenet Beef claims WSU tried to usurp control over research to create improved genetic testing to determine the tenderness of beef before slaughter. It is an advancement of their Tenet Test.

“Beef tenderness is strongly correlated to consumer satisfaction and demand. Accordingly, cattle known to produce more tender beef can be sold at a premium,” according to the plaintiff’s attorneys Witherspoon and Kelley, a Spokane law firm.

The beef industry is a $66 billion a year industry, according to the U.S. Department of Agriculture. It’s in all 50 states with 727,906 beef ranches, according to the National Cattlemen’s Beef Association.

“Beef tenderness is not correlated to fat or marbling. Tenderness is an inherited trait and can be a naturally selected goal,” according to the plaintiffs.

After more than a decade of research and testing, William F. Hendrix and Callipyge Genetics transferred all intellectual property and resources to a new company, Tenet Beef, in 2020. The new company brought in investors.

Hendrix and Callipyge Genetics are known for their discovery of the Callipyge Gene, which is linked to abnormal musculature in Polled Dorset Sheep. The work began before 1989 when Hendrix began working for the Yakima County WSU Extension office. He retired in December 2020.

Hendrix used the knowledge and applied it to cattle.

“Callipyge Genetics and Hendrix worked to identify genetic markers and develop a proprietary process by which it could identify tender beef through genetic testing. Such a process would allow those in the beef industry to test cattle for tenderness prior to slaughter, which would allow for better informed and more profitable breeding,” according to the plaintiffs.

Callipyge Genetics and Hendrix created a blood test to determine tenderness using three categories while cattle are alive. A rancher uses 3-4 drops of blood placed on a card and it was sent to Callipyge Genetics for testing and certification.

In 2019 Callipyge Genetics sought new genetic markers to improve the testing and contacted WSU’s Jiang. The plaintiffs claim it was made clear that it was a private company development, not part of his WSU duties, and paid for by Hendrix.

“Hendrix represented to Jiang that this testing would remain confidential and proprietary but stated that a formal agreement was not necessary under WSU’s policies and procedures for Jiang’s lab to be of service,” claim the plaintiffs.

Jiang allegedly agreed to do the testing for $5,000 and later asked for an additional $5,000 before he would start. He reportedly asked them to pay a service account of Agriculture Health Lab through WSU.

Callipyge Genetics provided 96 Tenet tenderness verified samples for testing, which cost the company more than $1 million to develop, the plaintiffs claim.

Hendrix asked to be part of the testing team and that the fees be $1 per sample.

When testing of the samples was completed, “Jiang realized what Hendrix and Callipyge Genetics had been testing for and saw the potential value of the (intellectual property) on the market,” claim the plaintiffs

A year after testing started Jiang allegedly asked for $2 per sample and informed them the results belonged to WSU three times in emails with Hendrix.

Hendrix and Callipyge Genetics wrote they refused to sign a service agreement with WSU, since they hired Jiang as a private provider for DNA testing. They asked for their samples to be returned.

“Jiang responded that he did not know where they are,” claim the plaintiffs.

The plaintiffs wrote they pursued a resolution following WSU policies but did not receive an answer and sought help from the U.S. Attorney General’s office.

Tenet Beef is suing WSU for alleged violations of the Defend Trade Secrets Act, a federal law safeguarding companies’ proprietary technologies. They are seeking injunctive relief to prevent WSU from using the information and a jury trial to settle the dispute.

“Defendants Jiang and WSU misappropriated the trade secrets through improper means, including theft, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means,” accuse the plaintiffs.

They are also suing WSU for failing to meet the state’s Public Records Act by not promptly providing public records and inappropriately redacting ones that were provided.

Tenet Beef filed a claim for damages on Jan. 13, 2021, and filed a lawsuit 60 days later on March 14, 2021.