At the height of the pandemic, companies and governments around the world scrambled to develop and distribute COVID-19 vaccines. One such relationship involving HDT Bio, a Seattle-based biotechnology company, and Emcure, one of India’s largest manufacturers and distributors of generic drugs, has resulted in a fight over ownership of the life-changing formula. According to HDT Bio, in early 2020, the head of an Emcure subsidiary, Gennova Biopharmaceuticals Ltd. (“Gennova”), visited the HDT Bio headquarters to discuss bringing HDT Bio’s then-incipient COVID-19 vaccine to market in India. The parties formalized this relationship with an exclusive license agreement, and Gennova received a limited license to use HDT Bio’s COVID-19 vaccine and delivery platform, while HDT Bio received payments and royalties along with data from Gennova’s distribution to enable the development and sale of vaccines around the world.
Over the next year, the companies worked together to source the materials and study the safety and effectiveness of the vaccine through clinical trials. The parties initially collaborated and shared credit for the vaccine development. But, by the summer of 2021, the relationship had deteriorated. Gennova stopped sharing clinical data with HDT Bio, and Gennova and Emcure filed two Indian patent applications and a prospectus for an initial public offering. In November 2021, the “final nail [in] the coffin,” Emcure informed HDT Bio that it intended to sell the mRNA vaccine in India, “free and clear of HDT Bio’s intellectual property rights.”
HDT Bio filed suit against Emcure, alleging misappropriation of trade secrets in violation of the Defend Against Trade Secret Act (DTSA). Emcure moved to dismiss the case, arguing that the court lacks personal jurisdiction, that HDT Bio failed to state a claim, and that dismissal is warranted under the doctrine of forum non conveniens. Emcure then moved the court to stay discovery until its motion to dismiss was decided. The court denied the motion to stay, finding, on a “preliminary peek” of the motion to dismiss issues, that it will most likely have personal jurisdiction over Emcure and Emcure will lose on the forum non conveniens argument. Importantly, the court noted serious concerns over whether HDT Bio could seek relief in India on its misappropriation claim as “companies continue to face uncertainty due to insufficient legal means to protect trade secrets in India.” The case will, therefore, likely continue in the U.S. District Court for the Western District of Washington.
As the dust settles on the initial rush to disperse and administer COVID-19 vaccines to a critical mass of the global population, it is likely that similar suits will arise as companies seek to protect their transformative trade secrets, but it remains to be seen where those cases will be filed and, in turn, the prospects for protecting those trade secrets.
The case is: HDT Bio Corp. v. Emcure Pharmaceuticals, 2022 WL 2106160 (W.D. Wash. June 10, 2022).