Earlier this month, we hosted a group of clients and legal professionals at our New York headquarters for an evening exploring trends reshaping healthcare litigation today.
Madison Clark, Head of Law, opened the event before moderator Alixandre Azizi, VP of Law Business Development, led a discussion with three expert panelists:
- Frank Lichtenberg, PhD, Cain Brothers & Company Professor Emeritus of Healthcare Management at Columbia University and seasoned expert witness in healthcare cases
- Matthew J. Moffa, Partner and patent litigator at Perkins Coie
- Preston K. Ratliff II, Partner and New York Litigation Chair at Paul Hastings
The conversation covered topics from AI and patent eligibility to global litigation strategy and the growing role of third-party funding. Read on for the key themes that emerged.
The Rise of Brand-on-Brand and Collaborator Disputes
One of the most significant shifts is a move away from the classic brand-versus-generic litigation model toward disputes between former partners and collaborators. A decade of innovation through partnerships - between universities, biotechs, and large pharma companies - has produced a new wave of legal fallout.
Ratliff noted that many of these disputes are being resolved through arbitration rather than in the courts which carries risk when billions of dollars are at stake and appeal rights are limited. Moffa echoed this sentiment, stressing that companies must prioritize internal IP protection and contract terms from the moment they sign a collaboration agreement, not only when something goes wrong.
AI: Unsettled Law, High Stakes
Artificial intelligence was a central theme throughout the evening, surfacing issues that span patent eligibility, data rights, inventorship, and regulatory strategy.
Moffa highlighted two pressing concerns for clients developing AI-driven healthcare tools. First, data rights: many companies are using data licensed or collected years ago under terms that were written long before AI applications were imaginable. Auditing those licenses is now a critical first step. Second, AI-generated code often contains security vulnerabilities or open-source snippets with licensing implications that companies are only beginning to grapple with.
On the patent eligibility front, Ratliff pointed to a recent Federal Circuit ruling that found certain AI-enhanced processes weren't patentable. Courts have not yet developed a clear, stable test for AI-driven inventions, and inventorship questions are complicated when AI models play a role in the discovery or development process.
Moffa's practical advice: file broadly, diversify the patent portfolio, and protect multiple aspects of any AI-enabled innovation because the courts will take years to clarify which claims will hold.
A more nuanced concern emerged around FDA approval. Companies seeking to be first movers with AI-backed clinical tools must "lock down" their product to get through trials, but by the time approval is granted, a competitor can replicate the approach using a newer, better-performing model. The first-mover advantage that typically rewards regulatory investment may be significantly eroded in the AI era.
Modeling Market Harm and Competitive Dynamics
Lichtenberg offered a framework for understanding competitive harm in pharmaceutical markets that challenged some conventional assumptions. When a patent expires and generics enter the market, branded manufacturers often raise their prices, targeting the price-insensitive patients who remain loyal to the brand. More counterintuitively, when a new branded drug enters the market, it doesn't necessarily reduce the price of the existing branded competitor, but it does tend to lower the price of that competitor's generics.
Under cross-examination, the ability to defend economic analysis often comes down to presenting data in a way that is both technically rigorous and credible. Moffa and Ratliff noted that many cases hinge on the jury's perception of expert credibility, not just the quality of the underlying analysis.
The Importance of Narrative in Litigation Strategy
One of the more practical themes of the evening was the risk of leading with legal arguments before developing a clear business narrative. Ratliff observed that companies often want to immediately analyze their patents and map them to a product. But without a coherent story of how the innovation came to be, even strong claims can fail to resonate.
"The story that's more genuine and credible is ultimately where you should be spending your time," Ratliff said.
Third-Party Litigation Funding and Global Strategy
The panel addressed the expanding role of litigation funders - firms that invest in lawsuits as an asset class in exchange for a share of any recovery. Moffa noted that this has meaningfully increased the volume and diversity of plaintiffs. Companies with viable claims that once couldn't afford to litigate now can, while defendants face better-resourced opponents across more fronts.
For global disputes, both Moffa and Ratliff cautioned against treating all jurisdictions equally. Europe's Unified Patent Court allows injunctions across multiple countries from a single ruling, creating both opportunity and risk. In the U.S., recent changes at the Patent Trial and Appeal Board have significantly reduced the rate at which inter partes review petitions are being instituted.
Parting Advice
Each panelist closed with a takeaway for the room:
Ratliff: Think carefully about what happens with your IP if you succeed, not just if you fail. Partnership agreements are often excellent at addressing failure scenarios but leave success scenarios underspecified.
Lichtenberg: Beware of creative destruction. The greatest competitive threat facing life sciences companies often isn't a generic manufacturer but an entirely new technology entering your market from an unexpected direction.
Moffa: The friend you have today may be your adversary tomorrow. Maintain good partnerships but protect your IP and watch your back because that is where the most consequential litigation tends to come from.
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