As I Long Predicted -- Gilead Was Never Likely To Pay Any $2.54 Billion Patent Infringement Verdict

The single largest patent verdict in the history of the US court system. . . was just struck down, overnight. [My now prescient 2016 prediction on that; and a September 2017 one as well, here.]

To be fair, Merck's NYSE trading price never reflected an expectation that $2.54 billion would be paid to it, by Gilead. So its stock should be unaffected on next week’s NYSE open -- but Gilead's may rise modestly, with this news, as most of the uncertainty -- over levels of profitability on Gilead's largest single franchise, Sovaldi^®/Harvoni^®. . . is clearing.

And now, the central question is whether and when Merck will have to pay the $15 million in legal fees it has been ordered -- at the trial level -- to pay to Gilead, in California, on these same patents.

The able judge back in Delaware has ruled that the prior in time Merck patent (via the Idenix acquisition) is invalid essentially for being too vague to teach a skilled scientist how to make the specific compound that became Gilead's (via the acquisition of Pharmasset). . . Harvoni^®/Sovaldi^®. Here is a pertinent bit -- but do go read it all (some 52 pages, if you are so inclined!):

. . . .Only in March 2005 -- two months after the publication of U.S. Patent Application No. 2005/0009737 (DX371), issued to Pharmasset[/Gilead's] Jeremy Clark (more on him below), had been distributed at Idenix[/Merck] -- did Idenix[/Merck] first succeed in making and testing 2'-methyl up 2'-fl-µoro down. (DX359; DX0274.0119, 0122; Wang Tr. at 1196, 1198-1200 (stating that in March 2005 Idenix[/Merck] first successfully synthesized "an unprotected 2'-methyl-2'-fluoro nucleoside" and recognized it had done so); Standring Tr. at 1831-33)

In short, the undisputed record shows that, between 2002 and 2005, Idenix[/Merck] tried and failed to make and test a 2'-methyl up 2'-fluoro down nucleoside, and only succeeded when [Idenix/Merck's] Dr. Griffon "us[ed] information from a published Pharmasset[/Gilead] patent application. . . ."

The only reasonable finding, based on the trial record, is that Gilead met its burden to prove non-enablement by clear and convincing evidence. The trial revealed that there are no genuinely disputed material facts with respect to enablement. Accordingly, Gilead is entitled to judgment as a matter of law that the asserted claims of the '597 patent are invalid due to lack of enablement. . . .

While Merck will appeal this loss to be certain, I think the most likely final outcome is that Merck pays Gilead's legal bills in California, and does not win any royalty on Gilead sales.

We shall see -- but likely so ends the largest patent infringement award in US history. Back to championship basketball, in the gym. . . .

नमस्ते