David Manspeizer, a member of Morrison & Foerster’s Intellectual Property Litigation Group, was quoted regarding brand-name drug company lawsuits in the article, “Patent Lawyers See a Surge in Brand-Name Drug Company Lawsuits,” published by Corporate Counsel on December 13, 2016.
While it's not unheard of for brand-name drug companies to go to court to resolve patent disputes, the frequency at which it's happening is relatively new, says Mr. Manspeizer. "There's always been brand-on-brand litigation like this, but historically it seemed like there was one every couple of years," he says. "What we seem to be seeing now is a lot more of it."
"If you weren't successful in getting it (a drug) to market, you might look at your patent portfolio to see if there's a way to get a return on that through patent litigation," Mr. Manspeizer says.
A drug company that's succeeding in the marketplace may also have reasons to go to court, Mr. Manspeizer says. "Because the large players are fighting over the same areas, companies that are successful in getting a molecule onto the market want to protect it, so you are going to think about asserting your patents," he says.
Increased M&A activity may also play a role in the brand vs. brand trend. "You're seeing a lot of deals where smaller companies are bought by larger companies," Mr. Manspeizer says. "In those cases where the R&D asset you purchased wasn't ultimately successful, then you're going to have to perhaps monetize that asset some other way, and one way to do that would be through patent litigation."
Mr. Manspeizer says that there's a lot of pressure that comes with handling one of these litigations. "The physical and health consequences on the in-house law departments can't be understated," he says. "With one of these litigations where there's billions of dollars at stake and hundreds or thousands of jobs on the line, the biggest impact is it creates a tremendous amount of pressure."
And this trend may mean rethinking who's involved in litigation, Mr. Manspeizer adds. In your traditional litigation between a brand-name drug company and generic rival—so-called Hatch-Waxman Act cases—the facts are put to a judge, rather than a jury, and the focus is on patent validity, not damages. Lawsuits between competitors are a completely different animal, Mr. Manspeizer says, and legal departments need to prepare accordingly. "You might think about retaining jury consultants. And you might also have to think about who the outside firms are because you may have good Hatch-Waxman lawyers, but not good lawyers for juries," he says. Legal departments "may also need to think about damages, which have historically been kind of an afterthought in pharma cases," he adds.