A recent Law 360 story by Kelly Lienhard, “’Daiichi Awarded $46M Fees in Cancer Drug Patent Arbitration”, reports that Japanese drugmaker Daiichi Sankyo Ltd. has scored nearly $46 million in fees and costs in an arbitration initiated by rival Seagen in the companies' patent dispute over cancer drug technology after the arbitrator found that the U.S. biotech company did not file its infringement claims within the six-year statute of limitations.  According to documents filed in a federal court in Washington state, Daiichi was awarded $43.7 million in attorney fees, in addition to $1.9 million, plus ¥169,076 — or around $1,145 — in reasonable costs, for a total of just under $45.6 million.

Former Chief U.S. District Judge Garrett Brown Jr. served as an arbitrator in the dispute and sided primarily with Daiichi, with the exception of granting the company a full award for reasonable costs.  The final arbitration award made no changes to the August 2022 interim award, according to court documents, except to address Daiichi's request for attorney fees and costs.

In the interim award, Judge Brown rejected Seagen's arguments that it owned the patents in question since Daiichi had relied on Seagen's proprietary know-how to develop certain improved technology used in the drugs that the Japanese company had then sought to patent.  Judge Brown said in the final award that both Seagen's quiet title and breach of contract claims failed because they were outside the six-year statute of limitations.

According to Judge Brown, Washington state law requires Seagen to have filed its initial demand for arbitration before Oct. 11, 2018.  However, the biotech company didn't file until over a year later, on Nov. 12, 2019.  Judge Brown added that Seagen was unable to show that anything occurred in the case to merit an exception to the statute of limitations.  The judge said there was no evidence showing that Seagen had any procedures in place that would have flagged Daiichi's "improvement IP" and added that Seagen only began investigating Daiichi's new tech developments once it found out the company was likely to receive U.S. Food and Drug Administration approval.

"The arbitrator is not persuaded that those facts reasonably demonstrate diligence on Seagen's part. … Stated simply, the foregoing landscape does not support an exception to the six-year statute of limitations," Judge Brown said.  However, while Judge Brown found Daiichi to be the prevailing party in arbitration, he partially denied the company's request for reasonable costs.  Daiichi had requested a total award of around $58.1 million, plus ¥3.4 million, according to court documents, while Seagen argued that the award should be at most $10.2 million and ¥169,076.  Judge Brown said he found Daiichi's request reasonable, with the exception of its request to recover a total of $10.2 million and ¥3.3 million, about $22,163, in expenses related to arbitration.

According to the judge, Daiichi's expenses reimbursement request for items like airfare, lodging and meals does not match up with a reasonable understanding of arbitration costs.  Daiichi itself categorized arbitration costs in a March document as funds spent on invoices from the International Centre for Dispute Resolution, Judge Brown said.  Ultimately, Judge Brown ruled that Seagen had to pay Daiichi only $244,500 in arbitration costs.