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DRIT Wins Patent Licensing Dispute

On September 18, 2018, a Delaware jury returned a unanimous verdict in favor of Cravath client DRIT LP (“DRIT”) in a patent licensing dispute with Glaxo Group Limited and Human Genome Sciences, Inc. (“GSK”). The jury found that GSK had breached the implied covenant of good faith and fair dealing when it statutorily disclaimed a U.S. patent covering GSK’s lupus drug, Benlysta® to cut off its obligation to pay royalties to DRIT on U.S. sales of Benlysta®. The case arose out of a 2008 agreement under which GSK agreed to pay Biogen Inc. royalties on sales of Benlysta® in exchange for Biogen’s rights to certain intellectual property covering the medication. In 2012, DRIT, an investment vehicle managed by Cravath client DRI Capital, purchased Biogen’s royalty stream. In April 2015, after making royalty payments to DRIT for three years, GSK voluntarily disclaimed the royalty‑bearing patent and ceased paying royalties to DRIT. The matter was tried for six days before a jury in the Delaware Superior Court.

The Cravath team included partners Keith R. Hummel, Karin A. DeMasi and associates Charles A. Munn, Adam I. Rich, Sharonmoyee Goswami, David Kumagai and Jeffrey Then. The case is DRIT LP. v. GGL, et al, No. N16C-07-218-WCC-CCLD (Del. Super.).