By Alex Liu

Hong Kong, 23 February 2026: In a significant High Court judgment, a Hong Kong biotech company has won its claim that former employees and close associates misappropriated confidential and proprietary information – in other words, trade secrets – to set up a rival business. In upholding the plaintiff’s action, the ruling highlighted several tell-tale examples of copying and, crucially, the defendants’ lack of research documentation.

The case revolved around the biotech company’s development of a molecular screening process that allowed for a non-invasive prenatal test (described in court as the “Y-Test”) to predict gender in babies. The process was also used for detection of the genetic disorders alpha-thalassemia (“Alpha-Test”) and beta-thalassemia (“Beta-Test”).

When it was launched in 2007, the Y-Test was the first and only non-invasive prenatal test in the world that could claim 92-98% accuracy, according to the plaintiff. The court acknowledged that the breakthrough achieved “great business success”, accounting for more than 90% of the plaintiff’s income over the next four years. Market demand was high and the Y-Test needed little promotion.

In 2012, several key employees left the firm to join a number of newly formed and interlinked companies which, taken together, constituted a rival business. Within two months, they launched their own version of the test, claiming it achieved 99% accuracy. The plaintiff then sued five of the former employees, two associates and four newly formed companies – making 11 defendants in total – for breach of confidence, claiming it was impossible for them to have independently developed and validated such a complex test so quickly.

The subject matter at the heart of the dispute was highly technical and involved biochemical substances cited in the screening process such as Y‑markers, primers and probes. While acknowledging the complexity of the evidence, the court said the issue was simple: while the defendants could have had access to the confidential information about the plaintiff’s Y-Test, did they use it for cultivating their rival test or, as they claimed, did they develop it themselves?

In upholding the plaintiff’s claim against nine of the defendants, the court cited various factors: several signs of copying, including an instance where one of the defendants’ genetic markers for their test was identical to the plaintiff’s; confusion over the identity of the purported developer of the defendants’ rival test; and the lack of contemporaneous documentation to support the defendants’ assertion of independent development. On this latter point, the court rejected defence claims that research data was lost due to a computer malfunction and could not be retrieved as “incredible”.

The court also ruled on a separate claim by the plaintiff alleging negligence by one of the defendants, a former senior laboratory technician. It found she had failed to spot a clear error in a draft Alpha-Test report, resulting in a foetus being wrongly cleared of alpha-thalassemia. The court rejected a further claim of negligence against the same defendant concerning a disputed Beta-Test.

It should be noted that the trial was purely to assess liability, so there will be a separate hearing to consider damages. As for costs, the court took a “broad brush” approach, ordering all but one of the defendants to pay 75% of the plaintiff’s costs.

In closing, it is worth highlighting that some six weeks before the hearing, there was a “technical briefing” in which both sides’ expert witnesses assisted the court in understanding the issues to be aired. While the briefing was treated as part of the trial and counsel were present, only the judge could ask questions. The ruling acknowledged that the briefing was “very useful” and shortened the time of the substantive trial.

Further to this and on a broader scale, with Hong Kong seeking to become a world-class centre for biosciences and related technology, the hearing can be considered a marker in showcasing our legal system’s capability to handle such complex litigation.

Alex Liu is Managing Partner of BC&C. His key areas of practice include commercial and corporate litigation, investigations by governmental bodies such as the SFC, ICAC and Commercial Crime Bureau, insolvency and debt restructuring, intellectual property and employment matters. He can be contacted at alex@boasecohencollins.com.