In an unprecedented PTAB decision involving Spectrum Solutions LLC and Longhorn Vaccines & Diagnostics, the Board found all five challenged patents invalid and imposed sanction against patent owner Longhorn for failure to meet the duty of candor and fair dealing. The board determined that Longhorn selectively disclosed testing results to

Life Sciences is an area ripe for trade secrets misappropriation litigation. In recent news, Merz Pharmaceuticals, LLC filed a lawsuit under the North Carolina Uniform Trade Secrets Act alleging that its former director of federal accounts, Andrew Thomas, stole trade secrets relating to Merz’s flagship botulinum toxin drug Xeomin®. Those secrets purportedly included drug pricing strategies, marketing plans, market share data, and potential customer lists, all of which were intended to grow Xeomin®’s presence in the government market sector — a key therapeutic sector for Merz’s drug, which is primarily known for its aesthetic effects.   

In the United States, the scale of trade secret theft is estimated to be between $180 billion and $450 billion annually. Among the targets of this theft are pharmaceutical companies, which are some of the most research-intensive institutions in the world. Pharmaceutical research generally requires extensive work and often generates proprietary data that is pivotal to shaping pharmaceutical development. Because that data may be very attractive to threat actors, pharmaceutical companies employ various measures to protect their proprietary information, these measures may sometimes fall short. A November 2021 trade secret misappropriation suit brought by Venn Therapeutics (“Venn”) against Corbus Pharmaceuticals (“Corbus”) in the District Court for the Middle District of Florida highlights the issues that can arise despite a company’s best efforts to protect its trade secrets.

The Federal Circuit’s recent ruling in MaxPower Semiconductor Inc. et al v. Rohm Semiconductor USA, LLC highlights the interplay between the liberal federal policy favoring arbitration agreements and the Patent Trial and Appeal Board’s (“PTAB”) authority as an agency tribunal having a broad role to protect the public interest in ensuring the quality of patents.

Challenging the validity of a patent through the inter partes review (IPR) process at the PTAB is a conventional alternative to litigating invalidity in federal court. MaxPower addressed the question of whether the PTAB will defer to an agreement to arbitrate that did not expressly preclude the parties from proceeding before the PTAB.

Pharmaceutical drug development is expensive. One recent study estimates that the median cost to develop a new drug is $985 million, while the average is $1.3 billion. And those figures appear to be on the low end of a broad range. Others have estimated the average cost at approximately $2.5 to $3 billion, with costs increasing annually at a post-inflation rate of approximately 8.5%.

In an opinion issued on March 3, 2021, the Supreme Court of Delaware, one of the top commercial courts in the country, overturned a jury verdict that Glaxo Group Limited and Human Genome Sciences, Inc. (collectively, “GSK”) breached the implied covenant of good faith and fair dealing when GSK disclaimed all the claims of a lupus treatment patent it had licensed from Biogen thereby extinguishing its obligation to pay ongoing royalties on sales of its lupus treatment drug. The court’s reasoning and the outcome raise important considerations for life sciences practitioners in the transactional, litigation, and patent disciplines.