Preview Newsletter
Merck Gilead Patent Trial 3/29/16
-
Gilead says Merck 'deceitful' in hepatitis C drug patent fight
Mar 29, 2016 | Reuters Westlaw
By Andrew Chung
Gilead Sciences Inc on Wednesday will attempt to wipe out $200 million in damages for infringing two Merck & Co patents with its blockbuster hepatitis C treatments by claiming that Merck was dishonest in obtaining the patents, an argument that attorneys say could be difficult to prove. -
Merck Aims at Bigger Piece of Gilead Revenues Read more: http://www.therecorder.com/id=1202753498614/Merck-Aims-at-Bigger-Piece-of-Gilead-Revenues#ixzz44KL52tn9
Mar 28, 2016 | The Recorder
By Scott Graham
Gilead Sciences Inc. appeared to dodge a bullet last week when a San Jose jury found that its blockbuster hepatitis C drug infringes Merck & Co.'s patents, but awarded only $200 million—far less than the $2 billion Merck was seeking. -
Merck Seeks To Boost $200M Award In Gilead Drug IP Case
Mar 28, 2016 | Law360
By Ryan Davis
On the heels of last week's jury verdict that Gilead Sciences Inc. must pay Merck & Co. Inc. $200 million in a patent case over hepatitis C drugs, Merck asked a judge Monday to award it millions more in supplemental damages and prejudgment interest.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Online Sources
Full Text of Stories Below
-
Gilead says Merck 'deceitful' in hepatitis C drug patent fight
Mar 29, 2016 | Reuters Westlaw
By Andrew Chung
Gilead Sciences Inc on Wednesday will attempt to wipe out $200 million in damages for infringing two Merck & Co patents with its blockbuster hepatitis C treatments by claiming that Merck was dishonest in obtaining the patents, an argument that attorneys say could be difficult to prove.
A bench trial on Wednesday will pit Gilead's Fish & Richardson attorneys against Merck's lawyers from Williams & Connolly,on Gilead's claim that Merck has "unclean hands" because it used Gilead's technology in its own patent applications and soshould be precluded from enforcing its patents. Merck says the jury has already found that its patents are valid, foreclosing any unclean hands defense.
On Mar. 22, a federal jury found that Merck's patents were valid, and a couple of days later it ordered Gilead to pay $200 million for infringing them, about one-tenth of what Merck had been demanding. Gilead on Monday repeated its vow to appeal the case.
On Tuesday, the companies will argue over Merck's demand for a royalty on Gilead's sales going forward at a mandatory settlement conference on Tuesday. But both sides have said they are far apart on the issue.
The case has attracted widespread attention as Gilead, Merck, and other companies race to grab market share for a new generation of lucrative hepatitis C drugs, which can cure the liver disease in well over 90 percent of patients. Gilead is the dominant player, and its main treatment, Harvoni, lists at $1,125 per pill before discounts.
The case dates back to 2013 when both companies sued each other claiming ownership of laboratory work underlying sofosbuvir, the active ingredient in Gilead's drugs.
Wednesday's bench trial will give Foster City, California-based Gilead, the world's largest biotechnology company, another chance to escape liability. It will try to prove Merck obtained its patents by deceitfully using information from Pharmasset, Inc, the company that developed sofosbuvir, which Gilead acquired in 2011.
Merck had a expressed an interest in licensing a precursor compound to sofosbuvir from Pharmasset. According to Gilead, thechemical structure was supposed to be disclosed at a 2004 meeting only to "firewalled" Merck employees who were obligated under a confidentiality agreement not to share it with anyone in Merck's internal hepatitis C program.
However, Gilead alleged, that Merck sent Philippe Durette, its patent prosecutor who was involved with Merck's hepatitis C-related patent applications, to the meeting. Durette then changed the applications using Pharmasset's information, Gilead claimed.
"(T)his is deceitful conduct," Gilead said in court papers.
In a statement on Monday, Merck said, "Gilead's equitable defenses are without merit" and emphasized the years of research and investment Merck and its partners put into new treatments for hepatitis C.
The Kenilworth, New Jersey-based company said in court papers that its 2002 patent application already covered the Pharmasset chemical structure, well before the alleged disclosure by Pharmasset. Merck said the jury has already said as much in finding the patents were valid, which is "fatal to Gilead's unclean hands defense."
If Gilead does prevail, Merck would get no damages even though it won the case, said Bas de Blank, a partner in the Silicon Valley office of Orrick, Herrington & Sutcliffe.
But Gilead faces an uphill battle, he said. Unclean hands is difficult to prove because the judge has to be convinced that "even though you should have won this case, I'm going to make you lose it because I think you've acted really unfairly in getting to this point," he said.
"It's rare and challenging to prove this."
The case is Gilead Sciences, Inc v. Merck & Co et al, in the U.S. District Court for the Northern District of California, No.13-cv-4057.
For Gilead: John Farrell and Juanita Brooks of Fish & Richardson
For Merck: Bruce Genderson of Williams & Connolly and Stephen Rabinowitz of Hughes Hubbard & Reed
-
Mar 28, 2016 | The Recorder
By Scott Graham
Gilead Sciences Inc. appeared to dodge a bullet last week when a San Jose jury found that its blockbuster hepatitis C drug infringes Merck & Co.'s patents, but awarded only $200 million—far less than the $2 billion Merck was seeking.
But Merck is already shooting for hundreds of million more in supplemental damages. And the company is also accusing Gilead of playing dirty pool during the damages phase of the trial, hinting that it may demand a do-over or a much higher license rate for future sales.
That is, if the companies don't settle the case. U.S. District Judge Beth Labson Freeman of the Northern District of California ordered a settlement conference Tuesday before U.S. Magistrate Judge Paul Grewal.
Gilead sued Merck and its collaboration partner, Ionis Pharmaceuticals Inc. in 2013 for a judgment of invalidity after Merck demanded a 10 percent royalty on sales of sofosbuvir, the key ingredient in Gilead's blockbuster hepatitis C medications, Solvaldi and Harvoni.
The two drugs have rung up U.S. sales of $20 billion through Dec. 31, so Merck and Ionis were seeking nearly $2 billion at trial. Jurors found Merck's two patents valid and awarded a 4 percent license, but pegged the royalty base at $5 billion, rather than $20 billion.
Merck's lawyers said in a brief filed Monday that Gilead didn't dispute the $20 billion figure during trial, but asked jurors during closing argument to subtract Gilead's $15 billion investment in acquiring sofosbuvir and commercializing the drug before applying the royalty.
"The argument is factually and legally baseless, not to mention highly prejudicial," the company argued in a motion for prejudgment interest and supplemental damages signed by Williams & Connolly associate Jennifer Bodger Rydstrom. For one thing, jurors were never told that Gilead made billions in additional international sales that would have further offset its investment in sofosbuvir, Rydstrom wrote.
The jury's decision to subtract the $15 billion was "contrary to the court's instructions, and will be the subject of a post-trial motion by Merck," Rydstrom wrote.
In the meantime, Merck is trying to position itself for hundreds of millions in supplemental damages for sales after Dec. 31, which remain ongoing. Merck is proposing a 4 percent royalty on nearly 100 percent of U.S. sales of Sovaldi and Harvoni, now that the $15 billion has been recouped.
Gilead reported sales of $2.37 billion on Sovaldi and Harvoni during the last quarter of 2015. If that rate has held steady in 2016, Merck would be seeking more than $80 million for the first quarter of 2016. Merck further proposes that Freeman raise the royalty rate following the March 22 verdict, arguing that Gilead's infringement is now willful. The company cites a decision from U.S. District Judge Jon Tigar last fall that multiplied a royalty by 1.75 percent following trial due to willfulness. If Freeman agreed, that would put Merck in line to reap closer to $140 million during the next quarter, assuming a constant sales rate.
Gilead hasn't reported Sovaldi and Harvoni sales in 2016. It's possible sales have fallen since Merck entered the market with its own new drug, Zepatier, in January.
Gilead, which is represented by Fish & Richardson, has vowed to appeal the finding that it infringed Merck's patents, saying Merck contributed none of the innovation that led to the creation of sofosbuvir. Gilead is arguing in a bench trial before Freeman this week that the entire verdict should be thrown out because Merck's patent prosecutor improperly used information learned from licensing discussions with the developers of sofosbuvir.
-
Merck Seeks To Boost $200M Award In Gilead Drug IP Case
Mar 28, 2016 | Law360
By Ryan Davis
On the heels of last week's jury verdict that Gilead Sciences Inc. must pay Merck & Co. Inc. $200 million in a patent case over hepatitis C drugs, Merck asked a judge Monday to award it millions more in supplemental damages and prejudgment interest.
Merck said in its motion that because the jury’s Thursday verdict only considered sales of Gilead’s blockbuster hepatitis C drugs Sovaldi and Harvoni through the end of last year, an award of supplemental damages is appropriate to cover later sales of the allegedly infringing products.
“In this case, the jury’s damages award was clearly restricted to compensation for Gilead’s infringing sales through December 31, 2015,” the company said. “Merck is therefore entitled to supplemental damages for infringing sales of Sovaldi and Harvoni after that date.”
Merck said that the supplemental damages should be awarded at the same rate of 4 percent of Gilead’s sales used to arrive at the $200 million damages verdict. It asked the court to order Gilead to produce documents about its sales for the first three months of the year so that supplemental damages can be calculated.
Merck also said it should be awarded $4.8 million in prejudgment interest, saying that figure “is entirely appropriate in this case [and] anything less would fail to adequately compensate Merck for the use of its money during the infringement period.”
Merck is also seeking an ongoing royalty for post-judgment infringing sales, which will be addressed by the court in a separate proceeding.
Merck sought around $2 billion in damages from Gilead, or get 10 percent of the $20 billion combined sales of Sovaldi and Harvoni. However, the jury awarded only about one-tenth of that amount, ordering Gilead to pay 4 percent of its sales, excluding $15 billion Gilead said it had invested in the drugs.
A judge found in February that Gilead infringed Merck's patents, since Gilead did not contest that point. The question for the jury in the Northern District of California was thus only whether the patents were valid, and it concluded that they were.
Merck co-developed the patents with Ionis Pharmaceuticals, which will receive 20 percent of the $200 million damages award.
Representatives of the company could not immediately be reached for comment Monday.
The patents-in-suit are U.S. Patent Numbers 7,105,499 and 8,481,712.
Gilead is represented by Juanita R. Brooks, Jonathan E. Singer, Douglas E. McCann and Michael E. Florey of Fish & Richardson PC.
Merck is represented by Bruce Genderson, Jessamyn Berniker, Stanley E. Fisher, Sanjiv Laud and Jessica Palmer Ryen of Williams & Connolly LLP, Stephen S. Rabinowitz, David E. Lansky, Mitchell Epner and Patrice P. Jean of Hughes Hubbard & Reed LLP and Joshua H. Lerner and Laura E. Miller of Durie Tangri LLP.
The case is Gilead Sciences Inc. v. Merck & Co. Inc. et al., case number 5:13-cv-04057, in the U.S. District Court for the Northern District of California.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Online Sources
Full Text of Stories Below
Add recipients
Suggested