After a seven-year battle between two biotechnology companies for fees involving the lease of antibody technology, lessor Bioquest received a $2.5 million judgment recently from a Los Angeles jury.

The award, handed down in April in Bioquest Venture Leasing v. VivoRx Autoimmune, will ultimately come out of the pockets of one of the nation's richest. Patrick Soon-Shiong is ranked 116th on Forbes' list of the country's 400 richest people, showing a net worth of $2.2 billion.

His companies, VivoRx Autoimmune Inc. and its parent company Abraxis BioScience Inc., were found to have breached the license agreement between them and Bioquest.

The latest ruling in the case found that Abraxis could be held liable for VivoRx's actions under alter-ego liability.

According to Bioquest's attorney, Matthew A. Taylor of Duane Morris, Soon-Shiong's companies leased from Bioquest the use of antibody technology that could be used in DNA testing as well as other applications.

VivoRx was created as a wholly owned subsidiary of Abraxis for the purpose of licensing the antibody technology, Taylor said. The subsidiary, Taylor said, stopped making payments for the use of the technology, and Bioquest eventually initiated suit in 2005.

VivoRx had argued that Bioquest abandoned the technology and was no longer owed payment, he said.

"We thought they would abandon their abandonment theory," Taylor said.

What VivoRx and Abraxis did abandon was its right to put on a case-in-chief. Taylor said the defense rested after Bioquest concluded its case.

"We were surprised," he said.

In their opening statement, attorneys for VivoRx had said that Bioquest was never a direct party to the leasing agreements, but instead other companies had entered into agreements, including MedClone and Aberlyn, according to transcripts of the statements.

Taylor said VivoRx "pursued so many defenses to the bitter end," particularly one that suggested Bioquest abandoned the technology.

Taylor said the 12-member jury was very attentive and interested in the technology surrounding the case. After nine days of trial, the jury deliberated for less than an hour and came back with a unanimous verdict for Bioquest, Taylor said.

There were 10 questions on the verdict sheet, and one asked whether Aberlyn had assigned its rights to Bioquest. The jury agreed that it had. Ultimately, the jury found that VivoRx had failed to do something required by the contract and Bioquest was harmed by that failure.

The jury awarded Bioquest $2,575,448, according to the verdict sheet, finding for Bioquest on both its breach of contract and unjust enrichment actions.

Taylor said Bioquest was always willing to entertain settlement discussions, but nothing really came of that. The court intervened about two weeks before trial for settlement discussions. Taylor said he was looking for $3 million, and VivoRx's offer was below $500,000.

Because VivoRx was created to handle the contract that leased the antibody technology, its sole employee and owner was Soon-Shiong, Taylor said. It was a victory for Duane Morris and Bioquest to have Abraxis and its purse strings attached to the verdict.

In May, Los Angeles County Superior Court Judge Terry B. Friedman heard oral arguments on Bioquest's efforts to attach Abraxis and Soon-Shiong to the judgment. According to court documents, the judge found that Abraxis, but not Soon-Shiong individually, was liable under the alter-ego theory of liability.

"It was huge," Taylor said, adding that VivoRx "would have cried poor" if Abraxis was not attached to the judgment.

"The subsidiary was just a shell," he said.

Abraxis and VivoRx have filed post-trial motions and will most likely appeal, Taylor said. He is in the process of filing "a significant fee application," which he said he would do when and if the post-trial motions were denied.

He wouldn't give a number, adding that it would be the subject of litigation.

"It's significant because this is really a stonewall defense," he said, adding later, "We had to fight and claw for everything we've got."

VivoRx's attorney could not immediately be reached for comment.

Reprinted with permission from The Legal Intelligencer, © ALM Media Properties LLC. All rights reserved.