News Summary
A legal conflict has arisen between Lupin Inc. and Transpire over allegations of trade secret misappropriation related to generic inhalers. The case, set for trial in Florida, centers on former Lupin executive Xian-Ming Zeng, who is accused of stealing sensitive files before founding Transpire. Both companies are vying for a share in the lucrative generic inhaler market, with stakes heightened by claims linked to the popular medication Ellipta and their respective drug development efforts.
Baltimore – A legal battle has erupted between pharmaceutical giant Lupin Inc. and startup Transpire over allegations of misappropriation of trade secrets, particularly related to the lucrative market of generic inhalers. The case is set to go to trial in federal court in Florida.
Lupin, which is headquartered in Baltimore but is an Indian pharmaceutical company, claims that Xian-Ming Zeng, a former top research executive who resigned in August 2021, improperly accessed and copied 128 critical company files on his last day. Zeng, who had been head of research and development in Lupin’s inhaled pharmaceutical division since 2013, stated he was leaving to care for his aging parents in China but allegedly left with sensitive company information. He signed a non-solicitation and confidentiality agreement upon joining Lupin.
The controversy intensified when Zeng founded Transpire in 2022. Transpire retaliated by filing its own lawsuit against Lupin in August 2023, claiming that Lupin unlawfully utilized their trade secrets for drug development. Both legal actions are centered around the development of generic inhalers used to treat asthma and chronic conditions. The market for these inhalers exceeded $9 billion last year, making the outcome of this case particularly critical.
Central to the lawsuits is the generic version of Ellipta, an established medication for asthma and chronic obstructive pulmonary disease (COPD). Ellipta products reached sales of over $9 billion in the U.S. in the previous year, further heightening the stakes for both companies involved. Both lawsuits assert that improper handling of proprietary information could impact their respective market positions significantly.
Transpire’s CEO, Zeng, has touted progress towards securing FDA approval for their generic version of Breo Ellipta, positioning it as a necessary advancement for improving medication affordability and accessibility for patients. Their lawsuit seeks not only an injunction against Lupin and Ali Nokhodchi, a former Lupin scientist now associated with Transpire but also damages for the lost market share due to Lupin’s alleged overreach.
The backdrop of this legal conflict includes Zeng’s previous role in Lupin, from which he departed, reportedly triggering a 24% turnover rate within Lupin’s inhaled product team, thereby disrupting their operations. Zeng was not the only former Lupin employee who transitioned to Transpire; the startup also hired Ali Nokhodchi, who had taken confidential data before leaving Lupin for health reasons. Nokhodchi later returned to Lupin in a more senior role.
The rising frequency of legal disputes like this one highlights growing concerns regarding corporate espionage in the pharmaceutical industry. As companies increasingly rely on advanced technologies and proprietary information, safeguarding trade secrets has become a paramount issue. The results of this case could set a precedent for how companies in the sector handle trade secret disputes and employee transitions.
As the trial approaches, both Lupin and Transpire are preparing to present their cases in what promises to be a landmark legal conflict in the highly competitive field of pharmaceutical development.
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Additional Resources
- Baltimore Sun: Drug Maker and Pharma Startup Trade Secret Theft
- Google Search: Pharmaceutical Corporate Espionage
- Law360: Pharma Co. Trade Secrets Case
- Wikipedia: Trade Secret
- Ogletree: Unfair Competition and Trade Secrets
- Encyclopedia Britannica: Intellectual Property
- Womble Bond Dickinson: Litigation Bench Expansion
- Google News: Generic Drug Market
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