Sage Journals: Discover world-class research

Abstract

Due diligence is a necessary component of any transaction. One way or another — before the deal or during litigation involving the circumstances of the deal — a company involved in a transaction is going to have to do its due diligence. The objectives of due diligence are: (1) to identify risk to an appropriate level of detail in a due diligence report by understanding the assets of the target, issues relating to the target and how those issues may affect its ability to continue to operate its business and (2) to ensure informed drafting of the transaction documents so that they both shield the parties from liability and ensure the worth/value of a proposed transaction. Risk is identified by recognising hidden or unexpected liabilities and/or major regulatory obstacles to the acquisition. Intellectual property (IP) due diligence is a key component of technology-driven deals. Its purpose is to assess the scope, validity and enforceability of the target company's IP. A due diligence investigation involving generic medicines has specialised requirements. This paper will serve as a guide on how to make the most of IP due diligence in such deals.

Keywords

due diligence reporting transaction risk IP assets litigation exposure regulatory obstacles

Get full access to this article

View all access options for this article.

References

This paper is based on a presentation given by the author during the Eighth Annual Generic Drugs Summit in Washington, DC, 17th–19th September, 2007.

Jack

Bowe

(2007). Mylan in €4.9 bn generics deal. Financial Times, 14 May, p. 19.

Taro Investor Relations News Release, http://phx.corporate-ir.net/phoenix.zhtml?c=114698&p=irol-newsArticle&ID=1004501&ch. accessed 3rd December, 2007.

Chisum, Donald, CHISUM ON PATENTS, Vol. 8, Section 22.03(3) (2003).

Ibid..

U.S. v Dubilier Condenser Corp. 289 U.S. 178, 188 (1933).

Arachnid, Inc. v Merit Indus., Inc., 939 F.2d 1575, 1577 n. 2 (Fed. Cir. 1991).

10.

Merck & Co., Inc. v Hi-Tech Pharmacal Co., Inc., 482 F3d 1317 (Fed. Cir. 2007).

11.

Medimmune, Inc. v Genentech, Inc., 127 S. Ct. 764 (2007).

12.

Eolas Technologies, Inc. v Microsoft Corp., 457 F.3d 1279 (Fed. Cir. 2006).

13.

NTP Inc. v Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005).

14.

Eolas Technologies, Inc. v Microsoft Corp., 457 F.3d 1279 (Fed. Cir. 2006).

15.

NTP Inc. v Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005).

16.

Medimmune, Inc. v Genentech, Inc., 127 S. Ct. 764 (2007).

17.

Senate Bill No. S1145, The Patent Reform Act of 2007.

18.

21 U.S.C. §355(b)(2).

19.

CDER, Guidance for Industry: Applications Covered by Section 505(b)(2) (Draft, October 1999); http://www.fda.gov/cder/guidance/2853dft.htm, accessed 4th December, 2007.

20.

Letter from Janet Woodcock, MD, Director, Center for Drug Evaluation and Research, Food and Drug Administration, to Katherine M. Sanzo, Esq., et al., Docket Nos. 2001P-0323/CP1 & C5, 2002P-0447/CP1, and 2003P-0408/CP1 (14th October, 2003), www.fda.gov/ohrms/dockets/dockets/04p0231/04p-0231-c000001-toc.htm; Exhibit 29. accessed 11th February, 2008.

21.

Pfizer, Inc. v Food & Drug Administration et al., Docket 1:03-cv-02346-RCL (filed 13th November, 2003), Dismissed 30th September, 2005 (Docket documents 19 and 20). In its complaint (document 1, filed 13th November, 2003), Pfizer alleged that the FDA's final agency action in approving Dr Reddy's NDA for amlodipine maleate, which relied on non-public proprietary data in Pfizer's NDA for Norvasc®, was a violation of the FDCA, the Administrative Procedure Act, 5 U.S.C.§ 706(2)(A), and the Trade Secrets Act, 18 U.S.C.§ 1905, because the FDA improperly referenced and relied on Pfizer's proprietary, trade-secret data to support the approval.

22.

21 U.S.C. §360aa- §360ee.

23.

21 C.F.R. § 314.50(j); 59 Fed. Reg. 50388 (1994).

24.

21 U.S.C. §355(j)(5)(F)(ii).

25.

Beers

D. O.

(2004). Generic and Innovator Drugs, 6th edn, Aspen Publishers, New York, NY. §4.02[F].

26.

21 U.S.C. § 355(j)(5)(F)(ii).

27.

21 U.S.C. § 355(j)(5)(F)(iii).

28.

21 CFR 314.108(a); 21 C.F.R. 314.50(j)(4)(i).

29.

21 CFR 314.108(a).

30.

21 C.F.R. 314.50(j)(4)(iii).

31.

21 CFR 314.108(a).

32.

21 C.F.R. 314.50(j)(4)(ii).

33.

21 U.S.C. § 355(a)(b) and (c).

34.

FDA press release, http://www.fda.gov/oc/initiatives/advance/fdaaa.html, accessed 4th December, 2007.

35.

21 U.S.C. § 360bb(a)(2)(B).

36.

21 U.S.C. § 360cc(a).

37.

Sandoz press release, www.us.sandoz.com/site/en/company/news/pool/20060531_omnitrope_media_release.pdf, accessed 11th February, 2008.

38.

EMEA Guideline on Similar Biological Medicinal Products, www.emea.europa.eu/pdfs/human/biosimilar/043704en.pdf, accessed 3rd December, 2007.

39.

Medicare Modernization Act of 2003 (Public Law No.108–73), enacted 8th December, 2003.

40.

21 U.S.C. § 355(j)(5)((iv)(II)(cc).

41.

21 U.S.C. § 355(j)(5)((iv)(II)(bb).

42.

21 U.S.C. § 355(j)(5)((iv)(I).

43.

21 U.S.C. § 355(j)(5)(D).

How to Make the Most of IP Due Diligence in Deals Involving Generics

Abstract

Keywords

Get full access to this article

References