Re: IGEN:
On the surface those look to me like pretty favorable instructions for IGEN.
Peter,
I entirely agree. Much of it is fairly standard stuff, but some is quite favorable to IGEN, IMO, especially in the context of the evidence at trial. The language on punitives, and on termination of the 1993 license agreement, seems very helpful.
You are also to decide if any of these breaches, or any other breaches that you might find Roche committed, are material breaches such that Igen can terminate the License Agreement. Materiality means an issue of substance, it goes to the very essence of the agreement, and to the fundamental purpose of the contract. Not every breach of an agreement is material, but a number of non-material breaches may together amount to a material breach that justifies termination of a contract.
It seems very likely to me that the jury will rule for IGEN on the termination issue, in addition to substantial damages. Roche now has an exclusive license to the technology, and risks having no license when the jury comes back.
I still don't understand the issue of whether any of the compensatory damages are subject to tripling.
I'm hoping that Lawfighter will explain it this evening. He asked to hold questions on it until after his report on the summations.
To spell out the issue a little more: Damages awarded by the jury under Count XIV of the amended complaint (under a Maryland unfair competition/antitrust statue that generally tracks the Federal antitrust laws) will be automatically trebled. (This is separate from the issue of punitive damages)
The mystery Peter asks about is how much of the $700M+ in compensatory damages are awardable under Count XIV, as distinguished from the other counts based on breach of contract. (The jury can award the same damages under multiple counts -- multiple legal theories -- but IGEN will not receive multiple recoveries of the same damages. Awards under the different legal theories would have different consequences, including trebling and attorney fees under Count XIV, termination of the license under some counts, etc. The jury verdict sheet is pretty complicated is this case.)
Lawfighter quotes the judge on this issue:
"In Count 14, Igen has claimed that Roche engaged in unfair competition by continuing the Serono patent litigation even after Roche bought the patent from Serono. All persons in business may compete with one another using common honesty and fairness. In general, unfair competition is characterized by fraud, trickery or unfair practices. A mere breach of contract is not unfair competition. Here, Igen has alleged that Roche tried to exclude Igen from the market or damage Igen unfairly. While it is only the continuation of the Serono suit that may constitute unfair competition, you may also consider other evidence, such as Igen’s claim that Roche tried to depress Igen’s share price, as evidence of Roche’s motive if you decide to award punitive damages."
The amended complaint alleges in Count XIV:
205. Roche’s acts, as described above, were taken to exclude IGEN and its other actual and potential licensees from the market place or to damage IGEN and its other actual and potential licensees as competitors. This constitutes unfair competition.
206. For example, Roche engaged in unfair competition by, inter alia:
• underpaying royalties in an effort to eliminate IGEN as a competitor;
• selling outside of its licensed field;
• failing to exploit the DNA probe license while precluding others from doing so;
• failing to exploit the blood bank license to preclude IGEN from exploiting ECL in the blood bank market or licensing others to do so;
• failing to share Improvements and otherwise hindering IGEN in its development, manufacturing, and marketing of ECL-based products for its own use; and
• prosecuting IGEN for infringement of the ‘610 patent that Roche acquired from Serono, despite Roche’s long-held position that the licensed technology did not infringe the ‘610 patent and despite IGEN’s Improvement rights under that patent.
The judge's language in bold may represent a ruling that only the Serono litigation misconduct, and not the other things alleged in the complaint, are cognizable under Count XIV; if this is what he's ruled, then the damages subject to trebling will be a small portion of the total damages alleged. On the other hand, Lawfighter's brief summary of 78 pages of jury instructions may not have given us the full picture. I assume we'll have a better picture of this after Lawfighter posts this evening.
One other item of explanation. The jury was given Roche Diagnostics' financial position (net worth abt. $6.5B), in connection with the punitive damages claim, and was charged, in effect, you may punish but you may not bankrupt:
"As for punitive damages, if you find by clear and convincing evidence that Roche acted with actual malice toward Igen, with ill will, fraud or an intent to injure, you should award punitive damages in an amount that will punish and deter Roche and others from committing similar actions. You must determine that amount which must be proportionate to Roche’s conduct and to the ability of the Roche Diagnostics Division to pay such an award.
IGEN had wanted to show the parent Roche Holdings' net worth ($30B+, including a majority holding in Genentech), but was limited to Roche Diagnostic's finances, largely because only the sub is a named defendant in the lawsuit, even though the predatory actions taken against IGEN were a Roche-group-wide effort.
This leaves plenty of room for substantial punitive damages, if the jury is offended enough by Roche's conduct. I posted on this earlier today: messages.yahoo.com , responding to texasperry's post: messages.yahoo.com
I'm still amazed that Roche is letting this go to the jury.
I think they're absolutely barking loony to take the risk of letting a Maryland jury rewrite their business plan for them; or maybe they're just having trouble believing how much trouble a big company can get into before a jury in an American courthouse.
Or maybe the case is not settlable, because IGEN can't imagine continuing a relationship under the license agreement with Roche, in which it's been cheated left and right; while Roche really can't do without the license to IGEN's ORIGEN technology because Roche sells $500M annually (and growing) in diagnostic machines, reagents, etc. based on that technology, and is very reluctant to settle for a nonexclusive license (I'm sure IGEN is offering no better than a nonexclusive license in settlement).
The jury of suburban Baltimoreans gets the case tomorrow, and will deliberate daily (excluding weekends, I assume) until they reach a verdict. My office-pool entry is next Tuesday; in any event, it's almost unheard of for a jury to deliberate in a civil case for more than a week or so.
It won't be boring.
--RCM |
