BREAKING: Merck Will Recover Nothing From Gilead Hep C Patent Fight. And It Has Paid Perhaps Dozens Of Millions In Legal Fees.

More shortly -- but as we long ago intoned/predicted -- it would probably have been wise for Kenilworth to settle for a fraction of the jury award.

Now it has nothing but legal bills -- and nothing to show for the jury's $200 million nominal award. From the very able Judge Labson-Freeman's full 65 page opinion (a PDF file, just released):

. . . .The record, however, reflects a pervasive pattern of misconduct by Merck and its agents constituting unclean hands, which renders Merck’s ’499 and ’712 Patents unenforceable against Gilead. . . .

In sum, the Court concludes that Dr. Durette knowingly misled Pharmasset regarding his status as being within the firewall at the March 17, 2004, due diligence call. Merck approved this misconduct both before and after the March 17, 2004, call by initially assigning its HCV patent attorney to handle the Pharmasset due diligence work and thereafter, when Dr. Durette ceased his due diligence work on Pharmasset’s compound, directing him to remain active in prosecuting Merck’s overlapping HCV patent docket after Dr. Durette obtained the highly confidential Pharmasset PSI-6130 disclosure. Moreover, the Court concludes that Dr. Durette intentionally fabricated testimony in this case and that Merck supported that bad faith conduct. . . .

Candor and honesty define the contours of the legal system. When a company allows and supports its own attorney to violate these principles, it shares the consequences of those actions.

Here, Merck’s patent attorney, responsible for prosecuting the patents-in-suit, was dishonest and duplicitous in his actions with Pharmasset, with Gilead and with this Court, thus crossing the line to egregious misconduct. Merck is guilty of unclean hands and forfeits its right to prosecute this action against Gilead. . . .

Of course, there is still the possibility of verdicts in Merck's favor outside the US -- but this likely takes any US damages off the table. We may yet see a nominal settlement, in return for Merck waiving all rights of appeal. Or Merck may fight on -- and appeal -- but that would be largely a fools' errand, in my estimation. I would also imagine that the involved lawyer will face disciplinary proceedings -- or at least the record will be referred to a bar panel, by the able judge -- for an investigation.

Onward, on a busy Monday evening, for national news. We are on the cusp of another historic Presidential electoral race first -- the first time a woman will lead the ticket of a major party. . . . Smiling widely. . . .