US lawsuit may not impact India launch of Gennova's mRNA vaccine

The vaccine is now under review by the regulator, and if approved, it may be ready for launch in the Indian market and will be the first mRNA Covid vaccine to be available here.

The lawsuit in a Seattle court by a US start-up may not immediately impact the launch of Pune-based Gennova Biopharmaceuticals’ mRNA vaccine HGCO19 once it receives the Indian regulator’s nod, feel legal experts.

The long-term prospects of the vaccine may depend on how the case progresses. Gennova already submitted phase 2/3 clinical trial data with the Drugs Controller General of India (DCGI) this month.

The vaccine is now under review by the regulator, and if approved, it may be ready for launch in the Indian market. It will be the first mRNA Covid vaccine to be available here.

Meanwhile, US firm HDT Bio Corp has filed a lawsuit in a Seattle federal court against Gennova’s parent company Emcure Pharmaceuticals. HDT has accused Emcure of ‘stealing’ and misappropriation of HDT’s billion-dollar trade secrets and sought $950 million in damages. The US firm has alleged that Emcure ‘willfully and maliciously’ violated the Defend Trade Secrets Act and Washington’s laws against trade secret theft.

An Emcure spokesperson told Business Standard that “Emcure Pharma has no connection whatsoever with the matter. Emcure has been legally advised that no suit lies against it; and it has been wrongly joined as a party. The company is initiating steps to have the claims dismissed.” Sources said that HDT filed a lawsuit against Emcure, while it had a licence agreement with Gennova.

“The Licence agreement was terminated sometime back. Moreover, it had a clause that in case of any disagreement, the matter needs to be resolved through arbitration,” the source said.

Legal experts feel that the reliefs requested by HDT are primarily monetary in nature and not aimed at inducing any form of injunctions. Sidharrth Shankar, partner, J Sagar Associates, said, “As we see, the complaint at hand has been filed by HDT against the majority shareholder of Gennova, that is, Emcure Pharmaceuticals, at the US District Court. The reliefs requested for by HDT are primarily monetary in nature and not aimed at inducing any form of injunctions. Considering these two points, HDT’s lawsuit in itself will not mar the prospects of the launch of the vaccine.” Shankar, however, pointed out that the licence agreement between HDT Bio and Gennova provides for arbitration at the LCIA tribunal. “The delay, if any, will be because of such arbitration — in case injunctions sought for are granted,” he added.

He, therefore, said, “We may see a delay in launch; however, cancellation of launch will attract negative attention to HDT. It will simultaneously cause HDT to lose its prospective gains associated with the successful launch of a vaccine in a territory like India”.

The 34-page lawsuit by HDT Bio, reviewed by Business Standard, said that HDT and Gennova entered into various contracts in 2020. This led to an exclusive licence agreement, giving the Pune-based company a limited licence to use HDT’s technology to develop and sell a Covid vaccine in India. HDT, in return, would receive royalties and payments.

It would also have an unrestricted licence to use Gennova’s data to develop and sell the vaccine elsewhere. In the lawsuit, HDT has claimed that by late 2021, Emcure, the parent company of Gennova, which is also going for an initial public offering (IPO) in the Indian bourses, started proclaiming HDT-301 and LION technology as its own. Legal experts, however, also pointed out that the US has strong trade secrets law unlike India. Thus, one needs to closely monitor how the case progresses in the US.

Aparna Gaur, leader, IP Practice, Nishith Desai Associates, pointed out, “While there is no trade secrets law in India, in the US it is pretty strong. Anyone who misappropriated trade secrets can be proceeded against.”

She added that in the lawsuit, HDT has alleged that Gennova was working on behalf of Emcure and that Emcure was choreographing the entire act. It’s now up to the Seattle court to decide and one needs to see how each party pleads their case, she said. “If a judgment is passed by the US court against Emcure and Emcure decides not to comply with the order, HDT may need to approach Indian courts to enforce the order which may take some time,” Gaur added.