🔒Federal jury awards Yale, Biohaven $4M in lawsuit over trade secrets

A federal jury last week awarded Yale University and New Haven-based Biohaven Therapeutics Ltd. a combined $4 million over claims that a Boston-based investment firm willfully and maliciously misappropriated a Yale-developed trade secret. The verdict, issued Friday and announced in a news release Monday by Biohaven, stems from a lawsuit filed in March 2023 in U.S. District Court in Delaware that claims confidential information related to a Yale protein degradation technology was improperly used to create a competing company. The lawsuit was filed against RA Capital Management GP LLC, Avilar Therapeutics and Avilar co-founder Milind Deshpande. It went to a jury trial on July 20 and the verdict was returned Friday, finding Avilar and RA Capital liable for trade secret misappropriation, according to court documents. Many of the case's documents remain confidential. On the same day the lawsuit was filed, U.S. District Judge Richard G. Andrews granted a motion filed by the plaintiffs to file the complaint and supporting exhibits under seal, while directing them to later submit redacted public versions. Biohaven provided Hartford Business Journal with copies of the redacted complaint and the jury verdict. The case centered on Yale's Molecular Degrader of Extracellular Proteins, or MODA, platform, developed by Yale researcher David Spiegel. Biohaven licensed the technology from Yale in January 2021 for commercialization. In the lawsuit, the plaintiffs claimed RA Capital Management, a bioscience investment firm that also has offices in New York and San Francisco, had signed a confidentiality agreement with Yale while evaluating the technology in 2019. Negotiations for a possible deal between the parties ended without an agreement but, the complaint claims, RA Capital later used confidential information to help launch Avilar Therapeutics in Waltham, Massachusetts, which then pursued a competing protein degradation platform. The jury was asked to consider whether the defendants breached their confidentiality agreement with Yale and two trade secrets claims, labelled A7, a “roadmap for designing more effective MODA molecules,” and B8, “a roadmap for developing an oral therapy using MODA molecules and MODA technology.” For each trade secret, the jury was required to answer multiple questions, creating nine substantive findings on the trade secret claims. The jury ruled that RA Capital did breach the confidentiality agreement, and awarded $2 million to Yale. It also ruled that Yale and Biohaven had proven that A7 was a trade secret, but had not proven the same for B8. It then awarded $1 million each to Yale and Biohaven for trade secret misappropriation. The jury also specifically ruled that RA Capital had “willfully and maliciously” misappropriated a Yale trade secret through disclosure and use. In an emailed statement, RA Capital General Counsel Craig Randall noted the jury had rejected the claim that B8 was a trade secret and characterized the $4 million verdict as modest. He added that both his firm and Avilar “continue to maintain there was no wrongdoing.” Biohaven issued a statement praising the verdict, stating that its “intellectual property was wrongfully taken,” adding the verdict “underscores the importance of protecting innovation developed through years of scientific research.” Karen Peart, Yale's associate vice president for communications, said in a statement that Spiegel's work was the result “of years of novel and rigorous research.” She added that Yale is committed to collaborating with industry partners, but that such relationships “depend on trust, integrity and respect” for the legal obligations.