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Merck Gilead Patent Trial 3/31/16
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Gilead Says Atty’s Lie Kills Merck IP Behind $200M Jury Win
Mar 31, 2016 | Law360
By Erin Coe
Two patents behind Merck’s $200 million jury trial victory last week are unenforceable, rival Gilead told a California federal judge at a follow-on bench trial Wednesday, saying an attorney who prosecuted one of Merck’s hepatitis C drug patents lied in the process, tainting both patents. -
Gilead Says Unclean Hands Taint Jury Verdict for Merck
Mar 31, 2016 | Courthouse News Service
By Matthew Renda
SAN JOSE, Calif. (CN) - A federal judge on Wednesday asked two pharmaceutical heavyweights for more information as she considers whether potentially unethical attorney conduct warrants reversing a jury's verdict in their trademark fight. -
Gilead loses to Merck in hepatitis C drug dispute
Mar 31, 2016 | Royal Society of Chemistry
By Emma Stoye
Gilead Sciences has been ordered to pay $200 million (£139 million) in damages to Merck & Co after a US court ruled that its hepatitis drugs Sovaldi (sofosbuvir) and Harvoni (ledipasvir and sofosbuvir) were developed using patents held by Merck.
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Gilead Says Atty’s Lie Kills Merck IP Behind $200M Jury Win
Mar 31, 2016 | Law360
By Erin Coe
Two patents behind Merck’s $200 million jury trial victory last week are unenforceable, rival Gilead told a California federal judge at a follow-on bench trial Wednesday, saying an attorney who prosecuted one of Merck’s hepatitis C drug patents lied in the process, tainting both patents.
Gilead Sciences Inc. lawyer Jonathan Singer of Fish & Richardson PC told U.S. District Court Judge Beth Labson Freeman that Merck engaged in improper behavior to obtain the patents, as its patent prosecutor participated in a 2004 call on licensing discussions with the developers of what later would become Gilead’s top-selling hepatitis C drugs Sovaldi and Harvoni under false pretenses.
Patent prosecutor Philippe Durrette used information from the call to help Merck secure patents that blocked competitors in the hepatitis C virus drug space, according to Singer.
In the call, Pharmasset Inc. purportedly disclosed the structure of its lead nucleoside compound as part of a potential licensing deal with Merck under the impression that participants from Merck were firewalled, meaning they had no involvement with Merck’s HCV program. Pharmasset has since been acquired by Gilead, and the structure at issue is a central part of Gilead’s drugs.
“Pharmasset had a right in its dealings with Merck to not have Durette on that call,” Singer told the court. “There was a firewall in place between the companies to make sure the people on the call were not involved in [the HCV program], but Durette was intricately involved.”
Singer argued that Durette misled Pharmasset into revealing its key structure by lying about being firewalled, and then used that information to narrow Merck’s patent claims pending before the patent office to precisely target what Pharmasset was doing. Singer also claimed that Merck’s patent prosecutor was not truthful during his deposition because he claimed he did not recall receiving the structure on that call.
The company’s argument was considered during a bench trial, which came on the heels of the jury’s findings last week that Merck’s patents – U.S. Patent Nos. 7,105,499 and 8,481,712 – were valid and that Gilead owed Merck $200 million in damages.
Merck attorney Jessamyn Berniker of Williams & Connolly LLP said that, perhaps in hindsight, Durette shouldn’t have joined the 2004 call, but while such might have been negligent, it did not rise to the level of unclean hands.
“Going into the call, Durette had no reason to think Pharmasset would fall squarely within the patent [Merck has],” she said. “If he went into the call thinking compounds to be disclosed wouldn’t be related to the work he was doing, that’s not a basis for a finding of unclean hands.”
Berniker also told the judge that by the time of the 2004 call, Pharmasset already knew that its structure fell within Merck’s patent, and when Durette mentioned in the call that he might have a conflict, Pharmasset didn’t have him elaborate and disclosed its structure anyway.
“[Pharmasset] always knew this compound was claimed by Merck,” she said. “In the years after this, it never suggested Durette did anything improper — for years and years until this litigation started.”
She also noted that Merck had already begun narrowing its patent claims before the 2004 call and that after the call, Durette didn’t do anything with the information and only modified Merck’s patent claims after Pharmasset’s patent application had been published.
Berniker contended that Gilead’s unclean hands defense was foreclosed by the jury verdict. Gilead’s defense was based on the proposition that Merck derived the invention claimed in the patents from Pharmasset’s confidential disclosure, but the jury found that Merck’s inventors were in possession of the claimed subject matter by January 2002.
Gilead attorney Gregory Booker of Fish & Richardson also argued that Merck waived its right to enforce the patents, saying that although Merck claimed to have invented the class of compounds covering Pharmasset’s structures, it made a number of attempts to license the compounds and at one point even offered to acquire Pharmasset for $1.4 billion, an offer Pharmasset rejected.
He said during potential licensing or acquisition discussions with Pharmasset, Merck never mentioned its patent or that Pharmasset may have to pay Merck a royalty, and that its assertion of its patent rights was unreasonably delayed.
“That conduct is inconsistent with its intent to enforce patent rights,” he said. “That silence speaks volumes.”
Merck’s attorney contended that it didn’t waive any of its patent rights and instead put Pharmasset on notice that Pharmasset didn’t have freedom to commercialize the key ingredient in the drugs without a license from Merck.
The patents-in-suit are U.S. Patent Nos. 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.
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Gilead Says Unclean Hands Taint Jury Verdict for Merck
Mar 31, 2016 | Courthouse News Service
By Matthew Renda
SAN JOSE, Calif. (CN) - A federal judge on Wednesday asked two pharmaceutical heavyweights for more information as she considers whether potentially unethical attorney conduct warrants reversing a jury's verdict in their trademark fight.
U.S. District Judge Beth Labson Freeman asked Gilead Sciences and Merck to provide further case law regarding the area of patent law known as the "unclean hands" defense.
Freeman will then decide whether the duplicity of one of Merck's patent lawyers is sufficient to disqualify it from receiving royalties from future sales of rival company Gilead Science's revolutionary treatment for hepatitis C.
In Round 1 of the fight, a jury found Gilead had infringed upon two of Merck's patents in its development of sofosbuvir, since Merck's discovery of a batch of nucleotides eventually led to the creation of Gilead's medication.
The jury awarded Merck $200 million in damages, derived from Gilead's sales beginning in December 2013 through the end of 2015. The hepatitis C cure, marketed by Gilead under the brand names Solvadi and Harvoni, earned the company about $19 billion in sales last year.
In court on Wednesday, Gilead argued it shouldn't have to pay Merck because the Merck engaged in unethical conduct during the process of bringing the drug to market and throughout the ensuing trademark infringement trial.
Specifically, Gilead alleges when one of Merck's patent lawyers, Phil Durette, lied under oath about how he obtained proprietary information that led to the prosecution of one of the patents at issue.
Durette was on a crucial 2004 phone call with scientists at Pharmasset, the small company that developed sofosbuvir. Gilead subsequently bought Pharmasset for $11 billion in 2011.
Gilead says Durette misrepresented his position on the phone call and also agreed to confidentiality provisions, which he subsequently violated when he prosecuted one of the patents at issue only after he realized Pharmasset was close to developing a cure for hepatitis C.
In his pretrial deposition, Durette told lawyers he was not on the phone call - an assertion he contradicted during the trial.
Gilead argues these bad-faith actions by Durette disqualify Merck from obtaining the royalties it seeks.
"We await the court's decision on our equitable defenses of unclean hands," Gilead said through a company spokesman. "We continue to believe the Merck patents are invalid."
For its part, Merck said that Durette did not lie during a deposition but simply forgot the facts, given that he was asked about events 11 years earlier during a deposition that took place five years after he left Merck.
"Gilead's equitable defenses are without merit," Merck said through a company spokesman.
However, Freeman did not buy Merck's line of defense.
The judge pointed out Durette was presented with documents that should have refreshed his memory during the deposition. Furthermore, he came up with specific alibis for why he was not on the phone call rather than simply citing a failure to recall - indicators of duplicity, Freeman said.
"I have taken great offense at the lies made by an attorney in this case," Freeman told Merck. "It's not the death knell. You have bad facts, but that doesn't mean I have decided you lose on this issue."
Freeman asked both lawyers to file briefs that explore previous case law related to unclean hands and equitable defense. In many of the cases cited, companies or individuals executed elaborate schemes, used bribes, behaved fraudulently or undertook other actions Freeman described as "odious."
Freeman said her decision would be predicated on whether Durette's actions meet the standard of unclean hands and constitute grounds for her to dismiss the jury's findings.
"I am standing on the shoulders of the jury," she said.
Should Freeman side with Merck and establish a royalties schedule, Gilead has vowed an appeal.
"Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages," the company said. "In the event the judge maintains the jury's verdict on the validity of the patents, we will appeal."
Sofosbuvir has proven enormously effective at curing hepatitis C, an often fatal virus that attacks cells in the liver causing cancer, cirrhosis or liver failure.
The drug is a nucleotide, or chemical compound, which essentially prevents the virus from replicating itself in the cell division process in the liver.
Merck maintains they took out two patents that cover a group of nucleotides, which the company hypothesized would be effective after extensive research.
"In its decision, the jury recognized that patent protections are essential to the development of new medical treatments," Merck said. "The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection, and achieving these advancements required many years of research and significant investment by Merck and its partners."
Gilead refutes that it infringed the patents, which it says are too general and have nothing to do with the specific scientific breakthroughs made at
Pharmasset that led to the development of the cure for hepatitis C.
Freeman gave both sides until April 22 to file their briefs.
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Gilead loses to Merck in hepatitis C drug dispute
Mar 31, 2016 | Royal Society of Chemistry
By Emma Stoye
Gilead Sciences has been ordered to pay $200 million (£139 million) in damages to Merck & Co after a US court ruled that its hepatitis drugs Sovaldi (sofosbuvir) and Harvoni (ledipasvir and sofosbuvir) were developed using patents held by Merck.
Both drugs have been incredibly lucrative for Gilead. Sovaldi has been one of the most commercially successful drugs ever, generating over $10 billion in sales in the first year after its launch at the end of 2013. Gilead gained access to sofosbuvir – an active compound in both drugs – in 2011 by acquiring US-based Pharmasset. Merck argued that Pharmasset developed sofosbuvir using two Merck patents and demanded compensation in 2013. Gilead contested this and sued Merck, asking for the patents to be declared invalid.
Last week, a federal court ruled in Merck’s favour and ordered Gilead to pay $200 million in damages, although this was less than Merck had initially sought. The company demanded that Gilead pay $2 billion, 10% of the $20 billion in sales generated by both drugs in 2014 and 2015.
Gilead has said it intends to appeal, meaning the conflict is likely to continue for years to come.
Separately, Merck are also seeking royalties of 10% on future sales of Sovaldi and Harvoni. A win would be significant for Merck, whose own hepatitis C treatment Zepatier (elbasvir and grazoprevir) was only recently approved, and has much lower projected sales as a result. That case will be argued in a separate trial.
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