As companies outsource drug and device development overseas, reducing development time and research and development costs, additional legal concerns are raised.  Last month a Shanghai court sentenced a researcher, employed by a leading Chinese pharmaceutical research firm, with 18 months’ probation, and ordered the employee to pay restitution for stealing and selling two patented compounds, owned by Merck.

The compounds were developed at the research firm, on behalf of Merck.  Apparently the employee gained access to the compounds and sold them illegally.  This case raises two important issues for manufacturers who outsource.  First, can the outsourcing agreements with research firms adequately protect intellectual property rights and data from this type of misappropriation?  Secondly, do patent portfolio strategies need to take into consideration these types of risks?  To learn more about the case see the article attached….

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