Justia Drugs & Biotech Opinion Summaries

Articles Posted in California Courts of Appeal
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Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary judgment. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code section 16600. In 1996, Biosite Inc. (Biosite; Quidel is the successor in interest to Biosite) licensed patent rights and know-how related to a B-type natriuretic peptide (BNP), which can be measured in a person's blood. The semi-exclusive licensing agreement allowed Biosite to develop an immunoassay to determine the level of BNP in a person's blood sample, to help diagnose congestive heart failure. After acquiring the intellectual property rights and know-how, Biosite developed and created a BNP assay for use with its point-of-care analyzer device, and it obtained regulatory approval. By 2003, Beckman had developed a laboratory analyzer, but it did not have a license for a BNP assay compatible with its analyzer. Around this same time, other companies were also pursuing BNP assays for use with their larger analyzers, which could run multiple, different immunoassays at higher volumes than the point-of-care analyzer Biosite had. Collaborating would mean Biosite could expand its customer base to those who wanted to use the larger capacity laboratory analyzers and Beckman could include the BNP assay in its menu of immunoassay offerings. Biosite and Beckman negotiated the Agreement over several months, and they exchanged numerous drafts before executing it. The Agreement prohibited Biosite from engaging other manufacturers to provide the BNP assay for their competing lab analyzers. The term of the Agreement was negotiated to coincide with the term of a related licensing agreement Biosite had with another company, Scios. Section 5.2.3 of the Agreement prohibited Beckman from researching or developing an assay that detected the presence or absence of the BNP or NT-proBNP proteins or markers for use in diagnosing cardiac disease until two years before the Agreement's expiration. Beckman sued Quidel for declaratory relief for violation of section 16600 and violation of the Cartwright Act, asking the Court to declare section 5.2.3 of the Agreement was void and unenforceable and to issue a permanent injunction preventing the enforcement of section 5.2.3 of the Agreement. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to section 5.2.3 of the Agreement. The Court of Appeal determined the trial court's per se application of section 16600 to section 5.2.3 of the Agreement between Quidel and Beckman was not correct, granted Quidel’s petition and issued a writ instructing the trial court to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law

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Bayer AG, maker and marketer of One A Day brand vitamins, was sued in California Superior Court for alleged violations of California’s Consumer Legal Remedies Act, Unfair Competition Law and express warranty law. Plaintiff William Brady’s theory was that Bayer’s packaging of its “Vitacraves Adult Multivitamin” line of gummies was misleading. Brady argued that despite the One A Day brand name, these particular vitamins require a daily dosage of two gummies to get the recommended daily values. Thus buyers end up receiving only half the daily vitamin coverage they think they are getting. The initial complaint was filed as a class action in March 2016, followed by an amended complaint in April, followed by a demurrer in May. The trial court, relying on the unpublished Howard v. Bayer Corp., E. D. Ark. July 22, 2011 (2011 U. S. Dist. LEXIS 161583) involving the supposedly misleading packaging of Bayer’s One A Day gummies, sustained Bayer’s demurrer without leave to amend. The Court of Appeal concluded Bayer failed to appreciate the degree to which their trade name One a Day has inspired reliance in consumers, and held an action alleging they violated California’s Consumer Legal Remedies Act, Unfair Competition Law and express warranty law should have survived demurrer. View "Brady v. Bayer Corp." on Justia Law

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To seek redress for an opioid epidemic, characterized by the Court of Appeal as having placed a financial strain on state and local governments dealing with the epidemic’s health and safety consequences, two California counties sued (the California Action) various pharmaceutical manufacturers and distributors, including the appellants in this matter, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, “Watson”). The California Action alleged Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain - a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations. The issue presented by this appeal was whether there was insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, the issue was whether the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul) owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson. Travelers denied Watson’s demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured’s products and for warranties and representations made about those products. The California Court of Appeal concluded Travelers had no duty to defend Watson under the policies and affirmed. View "The Traveler's Property Casualty Company of America v. Actavis, Inc." on Justia Law

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Plaintiff filed a products liability suit against McNeil and its corporate parent, Johnson & Johnson, after he suffered a severe reaction after taking Motrin. The Court of Appeal held that the jury's verdict finding McNeil liable for negligent failure to warn must be reversed because it was fatally inconsistent with the verdict finding McNeil not liable for strict liability failure to warn; the negligent failure to warn special verdict was also defective because of the failure to include the necessary question whether a reasonable manufacturer under the same or similar circumstances would have warned of the danger; the verdicts against McNeil for negligent and strict liability design defect, as well as against Johnson & Johnson for strict liability design defect, must be reversed, because the design defect claims were based on a theory—failure to sell dexibuprofen—that was impliedly preempted; the strict liability design defect verdicts must also be reversed because the jury found McNeil and Johnson & Johnson liable solely under the consumer expectation test, but that test did not apply when, as here, the question of design defect involved complex questions of feasibility, practicality, risk, and benefit beyond the common knowledge of jurors; and none of plaintiffs' design defect claims could be retried. View "Trejo v. Johnson & Johnson" on Justia Law