Judge Carpenter Presides over Multi-Day Jury Trial in which the Jury Finds in Favor of the Plaintiff

October 31, 2018

Publication

Following a trial that took place from September 10, 2018 to September 18, 2018, a jury in DRIT LP v. Glaxo Group Ltd., C.A. No. N16C-07-218 WCC CCLD, returned with a unanimous verdict in favor of the plaintiff on an implied covenant of good faith and fair dealing claim. The trial was based on a complaint filed by plaintiff DRIT LP against defendants Glaxo Group Limited and Human Genome Sciences, Inc. (collectively, “GSK”) on July 28, 2016, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. Although the breach of contract claim was resolved before trial, DRIT pursued its claim that GSK breached the implied covenant of good faith and fair dealing by improperly disclaiming U.S. Patent No. 8,071,092 for the purpose of avoiding royalty payments to DRIT.

The jury delivered a unanimous verdict, finding GSK liable for breaching the implied covenant of good faith and fair dealing by statutorily disclaiming the patent at issue. The Court will determine the damages to be awarded to DRIT post-trial.

Analysis: This case involved a large and complex dispute over certain rights contained in intellectual property contracts. Although the implied covenant of good faith and fair dealing is traditionally thought of as a “gap filler,” it also applies where “the party asserting the implied covenant proves that the other party has acted arbitrarily or unreasonably, thereby frustrating the fruits of the bargain that the asserting party reasonably expected.” See Dieckman v. Regency GP LP, 155 A.3d 358, 367 (Del. 2017); Nemec v. Shrader, 991 A.2d 1120, 1134 (Del. 2010) (noting the exercise of the defendant’s express contractual rights under the circumstances of that case “was arbitrary and in breach” of the covenant even though no improper motive existed) (citing Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 444 (Del. 2005)).