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Biosynexus, a biopharmaceutical company that has developed a technology that appears to prevent staph infections, has successfully moved to enjoin its joint-venture partner from transferring its interests in the staph-infection project to one of Biosynexus’ competitors. “Biosynexus is likely to succeed in proving that [GlaxoSmithKline, the joint-venture partner] breached its fiduciary duty by assigning its interest in the … technology and development program and that such an assignment was in violation of the anti-assignment provision of” their agreement, Manhattan Supreme Court Justice Bernard J. Fried held in Biosynexus, Inc. v. Glaxo Group Limited, 604485/05. “Based on the papers before me, GSK assigned to MedImmune substantially all of its interest in the [monoclonal anti-body] patent rights and development program, and that assignment would constitute a breach of the fiduciary duty owed by GSK to its joint-venturer, Biosynexus,” he wrote. Biosynexus created a way to prevent Staphylococcus aureus — better known as staph — infections. The bacteria, a scourge of hospitals that causes everything from pimples to pneumonia, afflicts an estimated 500,000 Americans a year. The bacteria is easily contracted, through such means as direct contact with an infected person or even through the person’s towels, sheets or clothing. Biosynexus entered into an agreement with defendant Glaxo Group Limited (a subsidiary of GlaxoSmithKline, or GSK) to develop and use the technology. However, the Glaxo Group struggled to produce usable quantities of an essential monoclonal anti-body. Those struggles, according to Biosynexus, resulted in the Glaxo Group entering into an agreement with Biosynexus-rival MedImmune to produce the anti-bodies. That agreement was at the center of the present decision. “Biosynexus claims that MedImmune is a competitor and moves for a preliminary injunction preventing GSK from (i) transferring confidential information to MedImmune, (ii) from failing to exploit the intellectual property, and (iii) from further implementing the GSK/Med agreement,” Fried wrote. Biosynexus alleged that the Glaxo Group breached its fiduciary duty as a joint-venture partner by, among other things, assigning its interest without consent and breaching contractual duties. The decision turned on whether defendant Glaxo Group’s agreement with co-defendant MedImmune constitutes a permissible license or an assignment, which would be disallowed by the underlying agreement. “When determining whether an agreement qualifies as an assignment or license, the legal effect of the agreement must govern,” Fried ruled. “If the agreement transfers ‘all substantial rights’ to a patent, then it qualifies as an assignment.” Here, Fried ruled, all substantial rights were transferred. “GSK granted to MedImmune the full right to use the patents, including the rights to make, use, and sell the technology for the development and sale of [monoclonal anti-body] products,” Fried noted. “Furthermore, the terms of the agreement tend to show that GSK intended to divest itself of substantially all control over the technology and its development.” He added, “In some circumstances, GSK must seek authorization or instruction from MedImmune before engaging in certain development activity.” The agreement therefore constituted an assignment in violation of the original agreement and the court therefore granted the preliminary injunction. The injunction halts the contested assignment, among other things. Barry R. Ostrager, Robert A. Bourque and Noah M. Leibowitz of Simpson Thacher & Bartlett represented Biosynexus. The decision marks the “vindication of a relatively small biotech company’s rights as against pharmaceutical giant” Glaxo Group Ltd., Ostrager said. “The judge did a very detailed and sophisticated [analysis and] relied on well-settled principles of joint venture law.” Kenneth Plevan of Skadden, Arps, Slate, Meagher & Flom represented Glaxo Group. He did not return a call for comment. Harvey Kurzweil and Henry J. Ricardo of Dewey Ballantine represented MedImmune. Kurzweil did not return a call for comment.

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