April 23, 2008

California Supreme Court Will Decide City of Hope Punitive Damages Case Tomorrow

The California Supreme Court has issued a "notice of forthcoming filing" in City of Hope v. Genentech, which involves a $200 million punitive damages award. The issue presented in the case, per the court's news release is:

"When an inventor or researcher entrusts a new idea or discovery to another under an arrangement providing for the other party to develop, patent, and commercially exploit the idea or discovery in return for royalties to be paid to the inventor or researcher, does a fiduciary relationship arise between the two parties, a breach of which may support tort, and in an appropriate case punitive, damages, or should the arrangement be treated like an ordinary contractual agreement, a breach of which supports only contract and not punitive damages?"

As we noted in our blog post after the oral argument, the argument primarily focused on tort liability issues and not at all on the amount of the punitive damages award (although that issue was addressed in the briefing).

Full disclosure: as we've mentioned before, our firm is counsel of record in this case.