Context: In July 2021, Kyoto-based drugmaker Nippon Shinyaku Co., Ltd. sued Sarepta Therapeutics, Inc., a U.S. biotechnology company, in the United States District Court for the District of Delaware, alleging it had breached an ongoing contract by filing petitions for Inter Partes Review with the Patent Trial and Appeal Board at the USPTO. The petitions sought to invalidate seven patents related to a drug used to treat Duchenne Muscular Dystrophy (DMD) – a genetic disorder that causes people to progressively lose muscle function – it alleged. The plaintiff also filed invalidation claims against three DMD-related patents and alleged that Sarepta’s own DMD drug infringed seven of Nippon Shinyaku’s patents. In January 2022, Sarepta filed counterclaims against Nippon Shinyaku, enforcing three patents it was licensing from the University of Western Australia. The District of Delaware in May entered summary judgment, finding Nippon Shinyaku had infringed two of those patents. A bifurcated jury trial was then held from December 16 to 20, 2024 to decide on the remainder of the dispute. In two jury verdicts handed down last week, the remaining Sarepta patent was found valid and Nippon Shinyaku was ordered to pay $115.2 million in damages. The jury also held that all seven of the patents Nippon Shinyaku had enforced are invalid.
What’s new: In a statement today, Nippon Shinyaku has said it “does not agree” with the jury verdict and will consider “all options”. The company has said it will even consider post-jury motions and appeals (December 23, 2024 Nippon Shinyaku press release).
Direct impact and wider ramifications: Nippon Shinyaku is evidently not going to give up without a fight. The case could get interesting if it asks the judge to overrule the jury or ask for a retrial – and this is granted. While judges often accept the jury verdict, this doesn’t always happen – and the Japanese drugmaker still has the option to lodge an appeal with the Federal Circuit.
Nippon Shinyaku and Sarepta both manufacture drugs for the treatment of DMD – a severe X chromosome-linked genetic disorder that predominantly affects young boys and causes progressive muscle function loss. Sarepta earned more than $130 million from sales of its DMD drug Vyondys 53 in 2023, while Nippon Shinyaku raked in more than $84 million from its U.S. Viltepso sales. In 2013 and 2015, the University of Western Australia obtained two patents directed towards antisense oligonucleotide-based therapies for the treatment of DMD – US Patents No. 8,455,636 and 9,024,007. Each of these patents’ claims encompasses Sarepta’s Vyondys 53 but fails to encompass Nippon Shinyaku’s Viltepso.
These are the patents Nippon Shinyaku asserted (all bear the same title, “antisense nucleic acids”):
- US Patent No. 9,708,361
- US Patent No. 10,385,092
- US Patent No. 10,407,461
- US Patent No. 10,487,106
- US Patent No. 10,647,741
- US Patent No. 10,662,217
- US Patent No. 10,683,322
It claimed that the following University of Western Australia patents (each of them on “Antisense oligonucleotides for inducing exon skipping and methods of use thereof”) were invalid:
In its counterclaims, Sarepta alleged that Nippon Shinyaku had infringed the above three patents, while the patents that had originally been enforced were all invalid.
This is the first jury verdict:
This is the second jury verdict:
The verdicts stipulated that Nippon Shinyaku must pay Sarepta and the University of Western Australia $115.2 million for patent infringement. The damages were calculated based on the lost profits for U.S. sales of Viltepso that infringe Patent No. 9,994,851, which Sarepta has exclusively licensed from the University of Western Australia for DMD treatment. They also rejected Nippon Shinyaku’s invalidation claims against Sarepta.
Background on the case
In June 2021, Sarepta filed seven PTAB petitions against Nippon Shinyaku patents relating to its DMD drug Viltepso. Those petitions were terminated a year later. Meanwhile, however, the Japanese drugmaker claimed that these petitions breached an ongoing contract they had signed in 2020, in which they had agreed that any such patent challenges in the District of Delaware. The company initially “sought to resolve this dispute amicably and without judicial intervention”, by sending it a letter.
In July 2021, Nippon Shinyaku sought a preliminary injunction (PI) requiring that Sarepta immediately withdraw its petitions. Alongside the request for a PI, the company claimed that Sarepta’s Vyondys 53 drug infringed seven of its patents and that three of the University of Western Australia’s patents were invalid. “Upon information and belief, Sarepta is the exclusive licensee with assertion rights for the UWA Patents,” it stated at the time. The company demanded a trial by jury.
Soon, however, the case became a two-way street.
In January 2022, Sarepta responded to Nippon Shinyaku’s allegations, admitting that it had filed IPR petitions with the PTAB in June 2021 challenging the patentability of all of the claims in the patents-in-suit. It denied most of its rival’s remaining claims.
Sarepta’s defences included that it had not breached any of its contractual obligations, that the University of Western Australia’s patents were not invalid or unenforceable, that it had not infringed any of the patents Nippon Shinyaku was enforcing, and that its Japanese rival had incurred no damages as a result of the alleged patent infringement or breach of contract.
The U.S. biotechnology company also argued that Nippon Shinyaku’s breach of contract claim should be barred under principles of equity, including “unclean hands”. Nippon Shinyaku’s original patent infringement action included confidential information that materially breached that same contractual agreement, Sarepta stated. In December 2021, the District of Delaware ruled that Nippon Shinyaku had violated the confidentiality provisions of the contract and struck said information from the complaint.
It added:
“In view of Nippon Shinyaku’s knowing and repeated bad-faith breaches of the [contract], Nippon Shinyaku has unclean hands precluding it from enforcing the [contract] and depriving it of any entitlement to injunctive or other equitable relief for any alleged breach of the [contract] by Sarepta.”
The U.S. biotechnology manufacturer also filed three counterclaims, challenging the validity of Nippon Shinyaku’s patents and alleging it had also infringed DMD-related patents and breached their contract.
In a rare move in May, a District of Delaware judge entered summary judgment, ruling that Nippon Shinyaku had infringed US Patents No. 9,994,851 and 10,277,590. The questions relating to whether those patents were valid, whether the third patent-in-suit was infringed and how much Nippon Shinyaku should be ordered to be pay still remained. Those questions were all answered in the verdicts last week.
Nippon Shinyaku and NS Pharma are being represented by Amy M. Dudash, Amanda S. Williamson, Christopher J. Betti, Krista Vink Venegas, Maria E. Doukas, Michael T. Sikora, Zachary D. Miller and Jitsuro Morishita at Morgan Lewis & Bokcius LLP. Sarepta and the University of Western Australia are being represented by Charles E. Lipsey, J. Derek McCorquindale, Ryan P. O’Quinn, L. Scott Burwell at Finnegan Henderson Farabow Garrett & Dunner, and Jack B. Blumenfeld and Megan E. Dellinger at Morris Nichols Arsht & Tunnell LLP.