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DRIT LP v. Glaxo Group Ltd.

Superior Court of Delaware

October 17, 2019

DRIT LP, Plaintiff,
v.
GLAXO GROUP LIMITED and HUMAN GENOME SCIENCES, INC., Defendants.

          Submitted: June 14, 2019

         Defendants' Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial - DENIED

         Plaintiff's Motion for Determination of Damages and Entry of Partial Judgment - GRANTED

          Philip A. Rovner, Esquire; Jonathan A. Choa, Esquire; Potter Anderson & Corroon LLP, Attorneys for Defendants.

          Matthew M. Wolf, Esquire; John E. Nilsson, Esquire; Soumitra Deka, Esquire; Bridgette Boyd, Esquire; Arnold & Porter Kaye Scholer LLP, Attorneys for Defendants.

          Gregory P. Williams, Esquire; Chad M. Shandler, Esquire; Nicole Pedi, Esquire; Richards, Layton & Finger P.A., Attorneys for Plaintiff.

          Keith R. Hummel, Esquire; Karin A. DeMasi, Esquire; Cravath, Swaine & Moore LLP, Attorneys for Plaintiff.

          MEMORANDUM OPINION

          WILLIAM C. CARPENTER JR. JUDGE.

         Before the Court are Defendants Glaxo Group Limited ("GGL") and Human Genome Sciences, Inc.'s ("HGS") (collectively, "Defendants" or "GSK") Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial, and Plaintiff DRIT LP's ("Plaintiff or "DRIT") Motion for Determination of Damages and Entry of Judgment. For the reasons set forth below, Defendants' Motion is DENIED and Plaintiffs Motion is GRANTED.

         I. FACTUAL & PROCEDURAL BACKGROUND

         The Court has rehashed the factual background of this case several times in prior Opinions, and it will only provide a brief recitation of the facts most relevant to the pending post-trial Motions.

         This litigation stems from a Patent License and Settlement Agreement entered into on October 28, 2008, and subsequently amended on August 24, 2012 (the "Settlement Agreement").[1] The Settlement Agreement was originally between Defendants GGL, HGS, and non-party Biogen to resolve a patent ownership dispute over inventions relating to the use of antibodies for the treatment of lupus.[2] This Settlement Agreement, among other things, gave Defendants ownership of such inventions and obligated Defendants to pay royalties to Biogen for United States sales of the lupus drug Benlysta, including U.S. Patent No. 8, 071, 092 (the '"092 Patent").[3]

         On August 24, 2012, Plaintiff DRIT purchased Biogen's royalty rights under the Settlement Agreement. Defendants consented to this purchase and paid royalties to Plaintiff, as Biogen's assignee, for nearly three years. However, in April 2015, Defendants filed a request for a statutory disclaimer of the '092 Patent with the United States Patent and Trademark Office ("USPTO"). Defendants informed Plaintiff that the statutory disclaimer had the effect of eliminating any claim for royalties, and stopped making royalty payments to DRIT on United States sales of Benlysta from that point forward.

         Plaintiff filed this litigation on July 28, 2016, alleging breach of contract (Count I) and breach of the implied duty of good faith and fair dealing (Count II). This Court ultimately dismissed Count I for breach of contract prior to trial. On April 25, 2018, DRIT amended its Complaint to add a new claim for breach of contract (Count III), which the Court severed for later resolution.

         In September 2018, the parties went to trial solely with respect to liability on Count II for breach of the duty of good faith and fair dealing. On September 18, 2018, a jury found that Defendants breached the implied duty of good faith and fair dealing by statutorily disclaiming the '092 Patent. Defendants subsequently filed a Motion for Renewed Judgment as a Matter of Law or, in the Alternative, for a New Trial. Plaintiff filed a Motion for Determination of Damages and Entry of Partial Judgment on Counts I and II. This is the Court's decision on the post-trial Motions.

         II. DISCUSSION

         A. Defendants' Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial

         Pursuant to Superior Court Civil Rule 50(b):

Whenever a motion for a judgment as a matter of law made at the close of all the evidence is denied or for any reason is not granted, the Court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion... If a verdict was returned, the Court may ... allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as a matter of law.[4]

         Under Rule 50, this Court is required to view the evidence in a light most favorable to the nonmoving party.[5] In order to grant Defendants' Motion, this Court must find that '"there is no legally sufficient evidentiary basis for a reasonable jury to find for'" Plaintiff.[6] Thus, "the factual findings of a jury will not be disturbed if there is any competent evidence upon which the verdict could reasonably be based."[7]

         "A motion for a new trial under Rule 59 may be joined with a renewal of the motion for judgment as a matter of law, or a new trial may be requested in the alternative."[8] In considering a motion for a new trial, the Court should give the jury's verdict "enormous deference, "[9] and "should not set aside a verdict ... unless, on review of all the evidence, [it] preponderates so heavily against the jury verdict that a reasonable jury could not have reached the result."[10] "A new trial should be granted only when the great weight of the evidence is against the jury verdict."[11]

         Defendants first argue they are entitled to judgment as a matter of law because the "evidence at trial showed that GSK and Biogen expressly agreed that GSK's royalty obligation under the 2008 Agreement would cease if a royalty-bearing patent was disclaimed."[12] According to Defendants, there was also no evidence that GSK would have agreed to limit its "pre-existing right as a patent owner to disclaim its own patents."[13] Furthermore, GSK contends that "DRIT's evidence relating to industry norms failed to provide a legally sufficient evidentiary basis for a verdict that GSK breached the implied covenant by disclaiming the '092 Patent, and thereby terminating royalty obligations under the 2008 Agreement."[14]

         In response, Plaintiff contends that it presented ample evidence to support the jury's verdict.[15] DRIT also argues that testimony from its experts supported the conclusion that GSK's disclaimer was unreasonable.[16] Furthermore, Plaintiff claims that Defendants are not entitled to a new trial ...


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