Dr. Chi-Huey Wong’s Final Rebuttal in the “OBI Case”

Dr. Wong presented the following rebuttal against the Prosecutors’ allegations in the “OBI case” in the session of closing arguments on August 28, 2018.

First Allegation:  Dr. Wong abused his position of the President of Academia Sinica (“AS”) by intervening in the process of technology transfer in order to facilitate an outcome favorable to OBI Pharma (“OBI”) by (i) directing the AS staff to prepare an MOU against the interest of AS, (ii) permitting OBI employees to study the technology and obtain the material without payment to the AS and (iii) directing the AS staff to complete documentation for the Licensed Technology

Rebuttal :  Dr. Wong had no involvement at all in the process of technology transfer to OBI, as President or otherwise, except for providing an expert view (as an inventor) as required by the Rules and Regulations of the AS. Since 2003, the Office of the President of the AS has played no role in technology transfers, whether in negotiation, review, approval or otherwise. In fact, technology transfers at the AS are executed along the following protocol:

  • Initiation by the Department of Intellectual Property and Technology Transfer (DIPTT)
  • Negotiation with the proposed licensee by DIPTT
  • Review, approval and signing by a Vice President

Dr. Wong confirmed, as corroborated by AS records, AS’ official response to the Prosecutors Office’s inquiries (the “Official Response”) and witness testimonies, that he had not negotiated, reviewed, approved or signed a single technology transfer agreement during his tenure as President.

Inexplicably, the Prosecutors proceeded with the Indictment before receiving the Official Response, a key item of evidence. Furthermore, the version of the MOU referenced in the Indictment did not materialize. On the contrary, the signed version of the MOU (and henceforth the Licensing Agreement) provided OBI with the right to obtain material for testing and to send its employees to learn the technology at the AS while imposing payment obligations on OBI. The AS received four million NT dollars from OBI pursuant to the Licensing Agreement.

The Prosecutors had misunderstood and mischaracterized the nature, the timing, the sequence, the relevance and the relationship of the cited events as well as both the spirit and the substance of regulations governing technology transfers and industry-academia cooperation. The Prosecutors also had misread and misunderstood numerous email messages composed in English, leading them to a version of the account that deviated significantly from reality.

Second Allegation:  Upon receiving initial positive data in September 2011, Dr. Michael Chang sought to license the enzymatic synthesis of Globo-H from the AS and induced Dr. Wong’s influence in facilitating such licensing, including supplying OBI with 2.23 grams of the material prior to agreement, by offering 1.5 million shares of OBI as consideration

Rebuttal: The Prosecutors had fashioned this dubious allegation on the basis of juxtaposing unrelated and irrelevant events while omitting key facts. The facts are:

  • OBI did not seek to license the Globo-H synthesis technology; it already owned it. Optimer Pharmaceuticals (“Optimer”), OBI’s parent company, had owned both the chemical and enzymatic syntheses of oligosaccharides, including Globo-H and Allyl Globo-H as invented by Dr. Wong in the US before his tenure at the AS. The Globo-H synthesis technology was not developed by the AS or by Dr. Wong while at the AS
  • The technology sought by OBI, namely the “new generation of enzymatic synthesis of oligosaccharides” (the “Licensed Technology”), was licensed by the AS in 2014, years after and hence completely unrelated to the alleged event
  • The AS supplied 2.23 grams of Allyl Globo-H to OBI in December 2012 in accordance with the terms of an industry-academia cooperation project between these two parties initiated in February 2011 (the “Cooperation Project”); production of such material did not involve the Licensed Technology. According to AS regulations governing such industry-academia cooperation, OBI had the first right of refusal on the products developed from the Cooperation Project, including both the material and the technology

The 1.5 million OBI shares at issue were at best the Prosecutors’ phantom notions. First, Dr. Wong was completely unaware of any intention or plan involving the said 1.5 million OBI shares at the time. Secondly, as corroborated by witness testimonies, Dr. Chang contemplated offering the said OBI shares to Dr. Wong out of appreciation for Dr. Wong’s past contribution to OBI, primarily the invention of “the enzymatic method,” which OBI acquired from Optimer in 2002 and was completely unrelated to the AS or Dr. Wong’s work at the AS. In any event, the plan of issuing such shares was rejected at the March 2012 OBI board meeting (as evidenced by the said meeting minutes), i.e., five months before the initiation of licensing discussions between the AS and OBI and nine months before the supply of Allyl Globo-H material.

As the foregoing facts irrefutably demonstrate, the Prosecutors were able to frame this improbable allegation only through obfuscating the Licensed Technology with what OBI already owned and tenuously linking unrelated and temporally distant events of (i) technology licensing, (ii) an ongoing cooperation project and (iii) thoughts of appreciation, while omitting key facts of OBI’s prior ownership of the alleged technology and Dr. Wong’s complete unawareness of any plans of stock giving as well as ignoring the pivotal fact that such share transfer never took place.

Third Allegation: Dr. Wong accepted three million OBI shares owned by Dr. Chang as a bribe from Dr. Chang, and Dr. Wong’s ownership of OBI shares violated AS regulations governing conflicts of interests

Rebuttal: No bribery took place as Dr. Wong purchased from Optimer, not from Dr. Chang, the three million OBI shares with his family’s own funds at terms pari passu to other investors’ purchases with the intention of supporting OBI. Dr. Wong was a co-founder of Optimer. Immediately prior to OBI’s IPO, Dr. Chang proposed that each of the three Optimer co-founders purchase three million OBI shares, which were being sold by Optimer pursuant to IPO regulations, as a demonstration of support for OBI. Dr. Wong purchased three million shares under his daughter’s name at terms (including the share price) pari passu to the shares purchased by fellow co-founders and other investors. In this light, characterization of such purchase as receipt of bribery is groundless.

Due to insufficient cash at hand, Dr. Wong completed the purchase through a short-term financing, which he repaid three months later with proceeds from the sale of OBI shares his family owned prior to the said purchase. Dr. Chang helped Dr. Wong with securing and repaying the financing. As a close friend, Dr. Chang had helped Dr. Wong with managing personal financial matters for many years.

Dr. Wong’s family owned the three million OBI shares in full compliance with the relevant government and AS regulations governing conflicts of interests. AS and the Ministry of Science and Technology regulations on conflicts of interests relating to an inventor’s ownership of licensee company shares encourage and permit such equity ownership without a duty to disclosure, except where (i) the inventor is responsible for the administration of the related technology transfer process, (ii) the inventor serves as an SAB or board member of the licensee, (iii) the inventor owns more than 5% of the licensee’s outstanding shares or (iv) the inventor’s children serve as board members of the licensee. None of the foregoing caveats applied to Dr. Wong and his family’s ownership of the said OBI shares. Furthermore, neither Dr. Wong nor his family members had worked at OBI or received any compensation from OBI.

Dr. Chang lacked any motive of offering a bribe to Dr. Wong. Around the time of the alleged bribery, specifically from April 25, 2012 to February 27, 2013, Dr. Chang was neither an OBI employee nor a board member; he owned less than two percent of OBI. The Prosecutors’ claim that Dr. Chang sought to give away NT$90 million (the market value of three million OBI shares at the time) of his personal fortune in hope of influencing a favorable outcome for a company at which he assumed no formal role and owned less than two percent was a far-fetched presumption defying conventional logic.

In any event, OBI as an entity also lacked such motive as its right to the Licensed Technology already was secured. OBI had established and funded the Cooperation Project in February 2011, well before the alleged bribery. Under the terms of the Cooperation Project, OBI enjoyed the first right of refusal on the products developed therefrom, which covered the Licensed Technology. It should be noted that the agreed licensing fee was meaningfully higher than OBI’s initial offer.

Lamentably, the totality of such gross speculation, misunderstandings, misconceptions, misinterpretations and mischaracterization served to form the sole basis of a hastily prepared, wrongful and malicious Indictment, yielding grave consequences. Such groundless Indictment has ruined the hitherto untarnished reputation of Dr. Wong and the AS; it also has destroyed the framework of technology transfers built through much time and effort, thereby chilling the development of key technologies which is ever so vital to the future of Taiwan. We submit that such profound damage may be mitigated somewhat if, and only if, the Court sees through the Indictment for what it is and renders a fair and just verdict in favor of Dr. Wong without appeal

 

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