EXCLUSIVE: Merck's Preferred Claim Construction Prevails, In Sovaldi® Patent Battles -- Potentially Materially Good News For Kenilworth

Merck has tonight won an important victory from Gilead, in the running patent battles about whether Gilead's Sovaldi^® infringes a Merck patent. [My last backgrounder here.]

Having said that, I must also note that even the very able US District Court judge who accepted Merck's construction of two phrases in the patent at issue sees a potential invalidity problem with Merck's preferred -- and now controlling -- construction. [See footnote 4 to her fine opinion, below.]

In sum, Merck's construction apparently claims such a broad invention that it may itself be invalid, as unpatentable. But that issue has been raised in other pleadings filed by Gilead -- and will be decided on another day. So for now, it would seem that Merck's claim to some level of patent royalty on sales of Sovaldi (a multi-billion dollar Hep C juggernaut) has been well-bolstered here. Whether it ever translates into dollars is entirely another matter, however, given that the Merck patent claims are now so broad that they may well end up being tossed, in total. We will keep you apprised. Here is the 11 page PDF order and opinion -- and a bit:

. . . .In sum, Gilead fails to show prosecution disclaimer, and the intrinsic record shows that Merck did not intend to limit claim 1 to include only those prodrugs expressly referenced. The Court rejects Gilead’s attempt to read the additional limitation "the phrase ‘prodrug of a compound’ means those prodrugs that are expressly claimed" into the definition of "administering" found in the ’499 Patent.

Accordingly, the Court adopts Merck’s construction of "administering" and construes the term to mean "providing a compound of the invention or a prodrug of a compound of the invention to the individual in need." As is clear from the Court’s analysis, this construction does not include the two limitations that Gilead sought in its proposed construction. . . .

While this piece of news, breaking after NYSE close today, Friday, may have the potential to move both companies' stock price, I will note that no specific legal advice is offered hereby. I am not a licensed patent lawyer. Truly, do consult your own patent expert(s) before trading on this news item. But I will take a bow, for having it first -- as a global exclusive here. Smile.