Key Facts
- •Exelogen Inc (Claimant) sued the University of Birmingham (Defendant) for breach of contract, breach of confidence (abandoned), unjust enrichment (abandoned), and vicarious liability (abandoned).
- •The contract concerned commercializing research on Exenatide for treating idiopathic intracranial hypertension (IIH).
- •The Defendant admitted breach of contract but disputed causation and quantum.
- •The Claimant had an exclusive option to negotiate a license until June 30, 2019 (extendable to June 30, 2020).
- •The Defendant breached the contract in November 2018 by negotiating with another entity.
- •The Claimant argued it had a substantial chance of securing funding and a license, citing potential investment from Electrocore and personal investment from its directors.
- •The Defendant argued the Claimant had no realistic prospect of securing funding, and a license would not have been granted without sufficient funding and a viable commercialization plan.
- •The Claimant failed to secure any significant funding before the breach.
- •Electrocore did not commit to investment, and the JP Morgan conference offered little prospect of securing the required funds.
- •The alleged US$7.5 million Electrocore valuation was based on a false premise (exclusive license, not option to negotiate).
- •The Defendant assigned its patent rights to Invex Therapeutics Pty Limited in March 2019.
Legal Principles
Lost opportunity claims require proof of a real or substantial chance, not a speculative one.
Allied Maples v. Simmons and Simmons [1995] 1 WLR 1602
Unjust enrichment is generally only available where there is no valid contract or the contract implies payment for services.
Benedetti v Sawiris [2013] UKSC 50; Marks and Spencer Plc v. BNP Paribas Securities Services Trust Co (Jersey) Limited [2015] UKSC 72
Damages for breach of contract are assessed at the date of breach, unless injustice would result.
Chitty on Contract, 34th Ed. Vol 1 paragraph 29-105
Outcomes
Claim dismissed.
The Claimant failed to establish that the breach of contract deprived it of anything more than a speculative chance of obtaining a license. The Claimant did not have a realistic prospect of securing the necessary funding to bring the product to market.
Damages assessed (obiter) at US$771,000.
This figure represents a 20% probability of the claimant obtaining a license, applied to the estimated net profits (US$3.85 million) after adjustments for risks and costs.