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| Medytox's botulinum toxin product, Meditoxin |
By Nam Hyun-woo
A few weeks after the United States International Trade Commission (USITC) decided to delay its final determination in a trade secrets case involving LG Chem and SK Innovation, it also delayed its final assessment in another trade dispute issue involving Medytox and Daewoong Pharmaceuticals.
New determination for the Medytox-Daewoong case has been set for Dec. 16 this year. On Friday, the latest USITC decision could be viewed as a pressure from the quasi-judicial agency to urge disputing parties to come to an agreement for the sake of U.S. public interest.
Some industry officials said the delay indicates that the USITC is facing difficulties finalizing its decision on the case, considering the estimated impact it may bring to industrial issues in the United States possibly including the job market.
Initially, the agency was scheduled to hand down its ruling on Nov. 6 but delayed it to Nov. 19 and did so again to the new date. The USITC did not specify reasons for the delays.
The two drug makers have been involved in litigations over the origin of their respective botulinum toxin (BTX) products, with Medytox claiming Daewoong has stolen trade secrets related to its Meditoxin BTX product.
Medytox filed a complaint to the USITC in January last year, and a USITC administrative judge in July recommended a 10-year ban of Daewoong's export of its BTX product, Jeuveau, in the U.S. As Daewoong appealed, the USITC has been reviewing the case.
Since Medytox is partnered with the U.S. pharmaceutical Allergan and Daewoong is paired with Evolus, the dispute was seen by many as a clash between U.S. companies too, and the final determination was anticipated to pose a significant impact on the U.S. BTX market.
Each firm interpreted the latest U.S. decision as being to their advantage. Medytox played down any underlying meaning, saying it is only a "delay in schedule" and the company is confident that "the final determination in December will uphold the initial determination."
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| Daewoong Pharmaceutical's Nabota, which is marketed as Jeuveau in the U.S. |
Daewoong, on the other hand, said the delay was intended for "an in-depth review on the errors seen in the initial determination" and it will do its utmost to "find the truth."
By comparison, the USITC ruled in favor of LG Chem in the trade dispute case in its preliminary ruling. However, the agency delayed its final decision on the case to Dec. 10 from Oct. 26 and asked SK Innovation to submit additional documents to back up its claim that SK Innovation didn't steal LG's trade secrets. SKI is backed by U.S. carmakers as SK is a key locally-manufactured battery supplier. SK Innovation is also building more battery plants in the state of Georgia.
Hidden implication
The spread of COVID-19 is cited as the reason for the consecutive delays. However, the hidden implication is that the USITC was appealing to the disputing companies to reach an agreement given the industrial impact of the two cases.
"The USITC said it takes into account public interest factors in determining whether to issue a remedy after finding a violation; this means the agency has to be extra cautious in making decisions on issues which may have serious impacts on the general public," an industry official said. "Given the impacts of the rulings, the agency appears to be giving time to the companies so they can settle their disputes."
According to sources, the USITC has delayed its final determination in 14 cases. Of them, two were delayed three times, one was delayed four times and two cases were postponed five times. Citing the record, they said there are chances of Medytox-Daewoong and LG Chem-SK Innovation experiencing extra delays for which the companies will incur hefty legal fees.
Reportedly, LG Chem and SK Innovation have spent more than 400 billion won for their legal battles including USITC and five other suits against each other. Should the case see additional delays, the costs will likely grow further.
"Though it is uncertain why the USITC is delaying its final rulings, the delays are taking a heavy toll on the disputing companies," another industry official said. "Given the potential impact, reaching an agreement before the rulings could be more beneficial for all of them."
