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Pfizer Loses $38 Million Trade Secret Jury Verdict in California - Punitive Damages Phase Still to Come

A Santa Clara County jury has ordered drugmaker Pfizer to pay $38 million in compensatory damages to a leading medical research nonprofit for stealing trade secrets to develop a pain relief drug.

The Superior Court jury reached the verdict Monday in a 2004 lawsuit filed against Pfizer by the San Bruno nonprofit Ischemia Research and Education Foundation. The jury's foreman said after the trial that evidence showed Pfizer had conspired with a former employee of the foundation to acquire data that otherwise would have cost tens of millions of dollars.

The lawsuit said Pfizer in 2002 wanted to use the foundation's database for clinical trials on Bextra, a drug to treat acute pain chiefly caused by arthritis. The drug was eventually taken off the market over concerns it posed a heart risk.

After the New York drugmaker and the foundation could not agree on terms for use of the database, the lawsuit alleged Pfizer arranged a side deal with Ping Hsu, a lead statistician at the foundation. Hsu provided the data without approval, according to the suit.
Pfizer said it plans to appeal.

"The company stands by the belief that its conduct was proper," Pfizer said in a written statement Tuesday. "Pfizer continues to believe that it was unjustly caught in a crossfire between (the foundation) and one of its former employees."

The lawsuit also claims that Pfizer and Hsu destroyed evidence when confronted about the data theft, said Mark Geragos, one of the foundation's lawyers.

"They hired Hsu on the pretext of his expertise, but it was all bull," Geragos said. "They just wanted access to (the foundation's) database. That database is like the Holy Grail."

Geragos said the company and Hsu could also face punitive damages that could increase the verdict to more than $120 million. Attorneys in the case are expected to appear for post-trial motions Jan. 16 before Judge Gregory Ward, who will decide whether to assess more damages.

The foundation's head, Dr. Dennis Mangano, said Monday that spending $15 million in legal fees instead of accepting a financial settlement was worth it.

"It's very risky going against a big company like Pfizer," Mangano said. "The right thing has been done . . . . This verdict was extremely satisfying to me, because I had felt that Pfizer had stolen the information we had gathered in order to manipulate it to keep their drug Bextra on the market. They were willing to profit at the expense of patient safety, something I have fought against my whole life."

Full post as published by Womble Trade Secrets Blog on December 24, 2008 (boomark / email).