MASSACHUSETTS EYE AND EAR INFIRMARY V. QLT PHOTOTHERAPEUTICS, INC. 552 F.3d 47 (1st Cir. 2009) CASE BRIEF

MASSACHUSETTS EYE AND EAR INFIRMARY V. QLT PHOTOTHERAPEUTICS, INC.

552 F.3d 47 (1st Cir. 2009)

NATURE OF THE CASE: The jury awarded Massachusetts Eye (P) a royalty of 3.01% of net global Visudyne sales and QLT (D) appealed.

FACTS: Dr. Julia Levy learned by happenstance that her children's burn-like lesions resulted from contact with a photosensitizer chemical found in cow parsley that, when activated by light, literally burned them. Dr. Levy began to use photodynamic therapy ('PDT'), which uses light to activate photosensitizer compounds. Dr. Levy eventually helped develop a proprietary photosensitizer called benzoporphyrin derivative monoacid ('BPD'), which had a unique ability to deliver itself to new blood vessels immediately upon injection. Dr. Levy initially hoped to develop the drug as a cancer treatment. Dr. Levy made contact with researchers at Massachusetts General Hospital ('MGH'), and later, P. One of them brought the BPD compound to the attention of P. P investigated whether BPD could be used to treat AMD - an ocular disease that is the predominant cause of blindness in individuals over age fifty. D did not provide any funding for initial research. The BPD-based experiments proved successful. BPD was a promising photodynamic agent for the treatment of age-related macular degeneration. Most experiments were conducted. Energized by findings, D executed a preclinical agreement, in which it agreed to fund further investigations of BPD. Things were so promising the FDA gave permission to initiate clinical trials in humans. In the year 2000, after several years of clinical trials in relation to which P drafted the clinical protocols and served as principal investigator, the FDA approved the BPD-based process for treating age-related macular degeneration. This treatment is marketed as Visudyne. Long before final FDA approval, D approached CIBA Vision about a partnership for manufacturing and distributing what became Visudyne. D used P's confidential research to entice CIBA. This was a violation of the material transfer and confidentiality agreements between P and D, which permitted D access to P's research results. D made several other unauthorized disclosures. D eventually approached P and requested that she make such a presentation to CIBA. P was hesitant because P and D had not yet negotiated a licensing arrangement for her treatment, but D promised P that it would enter into a licensing agreement, which was confirmed in writing. On the way to the meeting P expressed concerns about a written licensing agreement but D verbally assured P that it would happen and would treat P fairly. Thing were going gangbuster and after further promises of a license and fair compensation, P acceded to CIBA Vision and D's requests for all the information. D once again promised a license and fair treatment. D eventually signed an agreement with CIBA.

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