U.S. must face Gilead breach of contract claims in patent dispute
12/31/20 REUTERS LEGAL 21:47:06
Copyright (c) 2020 Thomson Reuters
Brendan Pierson
REUTERS LEGAL
December 31, 2020
FILE PHOTO: Gilead Sciences Inc pharmaceutical company is seen after they announced a Phase 3 Trial of the investigational antiviral drug Remdesivir in patients with severe coronavirus disease (COVID-19), during the outbreak of the coronavirus disease (COVID-19), in Oceanside, California, U.S., April 29, 2020. REUTERS/Mike Blake/File Photo
(Reuters) - The U.S. government must face claims by Gilead Sciences Inc that it breached contracts with the drugmaker by obtaining and asserting patents related to the company's HIV preventive drug Truvada, a federal judge has ruled.
Senior Judge Charles Lettow of the U.S. Court of Federal Claims ruled on Wednesday that Gilead's claims were not barred by a statute of limitations or by their overlap with issues in a pending patent lawsuit that the government filed against Gilead.
The U.S. Department of Justice and Ronald Machen of Wilmer Cutler Pickering Hale and Dorr, a lawyer for Gilead, did not immediately respond to requests for comment.
Gilead filed the action in the Court of Federal Claims, which hears claims for money damages by companies that contract with the government, in April, about five months after the government sued Gilead for patent infringement in the District of Delaware.
In that lawsuit, the government said that Centers for Disease Control researchers in the mid-2000s discovered that Truvada's active ingredients could be used to prevent HIV infection. The lawsuit also encompasses a newer version of Truvada, branded as Descovy, which received regulatory approval this year and shares Truvada's list price.
In its Court of Federal Claims lawsuit, Gilead said the government had breached five contracts by obtaining patents related to Truvada and suing Gilead over them.
Four of those contracts were so-called material transfer agreements, spanning from 2004 to 2014, in which Gilead agreed to provide the CDC with drugs for research, according to court filings. The fifth was an agreement in which Gilead provided the CDC with Truvada for a clinical trial in Botswana.
As part of those contracts, Gilead said, the government had agreed to give "serious and reasonable consideration" to requests by Gilead for licenses to intellectual property stemming from the material transfer agreements. It also agreed not to seek intellectual property protection for any inventions arising from the Truvada trial, the company said.
Gilead claimed that the government's initial patent application in 2006 used information from the clinical trial. It also said it obtained its patents secretly, without giving Gilead opportunity to seek a license.
As a result, Gilead said, it had suffered damages, both in the form of reputational harm and because it would likely receive less favorable license terms.
The government moved to dismiss the case, arguing that it was barred by a six-year limitation period that began running with the 2006 patent application. It also said federal law denies the Court of Federal Claims jurisdiction over claims that are already pending in another court, and that Gilead's claims were the same as a defense of unclean hands it asserted in the Delaware case.
Lettow rejected both arguments, finding that Gilead's injury happened, at the earliest, in 2015, when the government's patent was issued. He also said that breach of contract claims were distinct from an unclean hands defense.
"While the Delaware suit and the pending case have similar factual backgrounds, the mere presence of overlapping facts is insufficient," he wrote.
The case is Gilead Sciences Inc v. USA, U.S. Court of Federal Claims, No. 1:20-cv-00499.
For Gilead: Ronald Machen of Wilmer Cutler Pickering Hale and Dorr
For the government: Walter Brown of the U.S. Department of Justice, Commercial Litigation Branch
End of Document© 2024 Thomson Reuters. No claim to original U.S. Government Works.