covenent of good faith and fair dealing

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.