Jury Orders Lilly to Pay $90M for Breaching License Implied Covenant
A Northern District of California jury reportedly found Eli Lilly breached the implied covenant of good faith and fair dealing under its 2017 Nektar license, awarding $90M after defeating a separate claim.
According to a single practitioner source (Goodwin Procter, via JD Supra), a jury in the U.S. District Court for the Northern District of California returned a verdict on September 24, 2026 after roughly five days of deliberation, finding that Eli Lilly & Co. breached the implied covenant of good faith and fair dealing under its 2017 license agreement with Nektar Therapeutics and awarding $90 million. The source indicates Lilly defeated a related claim, though the available material does not describe the counts tried or the theories behind the defeated claim; those details should be confirmed against the docket and judgment forms.
For life-sciences and IP licensing counsel, the significance is the doctrine rather than the dollar figure. An implied-covenant holding tied to conduct around a patent or technology license offers licensors a damages route that does not require proving invalidity, non-infringement, or unpaid royalties, and shows licensees how collaboration conduct, development expectations, or governance and step-in rights can be characterized as breach. It adds drafting pressure around milestones, diligence obligations, and express covenant language that could displace or narrow the implied promise.
Watch for post-trial motions, any appeal, entry of judgment, and whether the verdict is settled. Clients holding long-term inbound or outbound licenses should audit agreements for express implied-covenant disclaimers.