Biotech Values

[tinkershaw]

To what extent could Watson be on the hook as well?

Watson is jointly and severally liable, which means is MNTA gets a verdict, MNTA is going after the deepest pockets, Watson. Watson's remedy is to then go after Amphastar who they have a contractual indemnification.

So Watson is as liable as Amphastar, but really, Watson has more to lose and less to gain, as Watson is certainly a company that such a judgment can be collected from, whereas with Amphastar, they do not have easy access to public markets to raise funds, and probably do not have the sort of finances to enable them to pay a more catastrophic judgment. Thereby, it is what is known in economics as a moral hazard: take a risk on someone else's dime.

Because of this, Watson will almost certainly (unless they are incompetent) be playing a large role in deciding whether to launch at risk or not as the interests of the parties are not aligned here, and MNTA's damages are in the hundreds of millions of dollars (not the usual patent damage case - as damages are catastrophic even without the threat (as small as it may seem sometimes) of treble damages.

But, legally, that is an interesting question, should Ampha/Watson be liable for the unique contractual damages that MNTA will suffer because of patent infringement? Always something to argue in a lawsuit, some niceties. But I am not going to argue this beyond that, as it is of no productive use. Just a potential future issue should MNTA be fortunate enough to be in the position to argue its damages.

Tinker