A WilmerHale legal team co-led by partners Ronald Machen and David Bassett won a landmark victory for Gilead Sciences on May 9, 2023 when a federal jury sided with the pharmaceutical company against the US government in a precedent-setting patent-infringement trial.
The extraordinary case, the first-ever US government lawsuit against a pharmaceutical company for patent infringement, centered on HIV-prevention drugs and was closely watched by the pharmaceutical industry.
The industry’s concern was that a Gilead loss could harm future collaborations between drug companies and the government that are so important to successful drug development. Gilead’s win lifted the cloud of uncertainty over the entire pharmaceutical industry’s working relationship with the Centers for Disease Control, the industry’s long-time government partner in necessary pre-clinical and clinical trials.
The victory, in which WilmerHale partners Mark Fleming, Vinita Ferrera, Tim Cook, and George Varghese also played significant roles as part of the legal team’s core group, was the second time in recent months that WilmerHale helped Gilead prevail in a federal court against the US government. In November 2022, Gilead won a breach of contract bench trial in Washington DC against the Department of Health and Human Services in a dispute related to the HIV drugs.
At issue in the complex patent infringement jury trial in US District Court in Delaware before the Honorable Maryellen Noreika was the federal government’s allegation that Gilead violated the government’s intellectual property rights connected to two HIV-prevention drugs: Gilead’s ground-breaking drug Truvada and the company’s Descovy medication, which came later.
The US Department of Justice argued that CDC researchers had developed the idea of using the drugs in pre-exposure prophylaxis, a regimen known as PrEP. Further, it said that by marketing the drugs and generating billions of dollars of revenue, Gilead had violated the government’s patents. For that, the government sought a $1 billion judgment against Gilead. The government filed its lawsuit in 2019 during the Trump Administration with the support of HIV-AIDS activists seeking lower prices for the drugs.
Gilead argued the invalidity of the patents, pointing to copious evidence demonstrating that the idea of using the drugs to prevent HIV infection predated by many years the government’s claim to have invented the approach.
After a five-day jury trial and just a little over two hours of deliberation, the jury decided completely for Gilead. The jury found the government’s patents to be invalid due to the underlying ideas being both obvious and anticipated so there could be no infringement by Gilead.
The patent-trial victory was reported widely by numerous news outlets, including the New York Times which quoted from Bassett’s closing argument. “‘The government has acted like an adversary, a sharp-elbowed competitor that wants to claim for itself the right to use Gilead’s own drugs for PrEP,’ he said,” the Times reported. The Wall Street Journal opined in an editorial: “If the government had prevailed, you can bet it would seek patents and hefty royalties for research it helped fund on other treatments. The feds might also use patents as a cudgel to force companies to lower prices.”
Beginning in 2004, the CDC sought free drugs from Gilead for several PrEP research studies. Gilead provided them under three material transfer agreements (MTAs) referenced above. The MTAs required the government to give prompt notification if the government discovered an invention while using Gilead’s drugs and also provide Gilead an opportunity to license them.
The CDC’s clinical researchers also asked for millions of dollars of free drugs for PrEP clinical trials in the US and Botswana. Gilead gave these drugs to CDC as well information about how to prescribe these drugs successfully under clinical trial agreements (CTAs) that required CDC “to put the results of the [trials], patentable or otherwise, in the public domain for all to use without obligation or compensation to CDC” and “not to seek patent protection in connection with any inventions that derive from the use of the [drugs] in the [trials].”
A group of CDC scientists subsequently filed a patent application broadly claiming the use of drugs like Truvada® for PrEP in 2006. But contrary to the MTAs, CDC did not promptly notify Gilead of the application—it did not notify Gilead until at least 8 years later in 2016.
In addition, despite its promise not to patent the trials’ results, CDC obtained patent protection on the use of Gilead’s drug Truvada® for PrEP. While the patent application was pending and the clinical trials were underway, the CDC and FDA aggressively pressured Gilead to seek FDA approval to sell Truvada® for PrEP, thereby inflating any potential damages that could be attributable to an induced infringement finding, without ever notifying Gilead it had sought patent protection on the use of Truvada for PrEP. Based on this pressure, Gilead sought and received approval to sell Truvada® for PrEP in 2012.
The Patent Office issued CDC’s patent application in 2015—nine years after it was filed—and issued three more related patents after that. In 2019, following congressional hearings about the cost of Gilead’s drugs, the government sued Gilead in federal court in Delaware for allegedly infringing these patents. Gilead, in turn, sued the government for breach of contract.
In the breach-of-contract case, WilmerHale conducted a seven-day trial before Court of Federal Claims Judge Charles Lettow in June 2022. Closings were October 26, 2022, and Judge Lettow issued a decision overwhelmingly in Gilead’s favor less than a month later. Although the court reserved a decision on the government’s liability under the CTAs until after the Delaware trial, it found for Gilead across the board on breach of the MTAs, made several helpful preliminary findings on breach of the CTAs. The court did not find for the government on any issue or even any disputed fact.
David Bassett said:
“To meet the challenges of this unique case, we were able to meld together successfully a seamless team from across the firm’s various practice strengths, including government litigation, patent prosecution, and patent litigation. Together, we achieved a terrific and well-deserved result for our valued client, Gilead.”
Ron Machen, WilmerHale’s Litigation and Controversy Chair said:
“This case brought together two of WilmerHale’s preeminent practice areas—patent litigation and litigating complex business disputes against the government – that we do as well as anyone in the country. The verdict was especially gratifying because Gilead trusted the CDC scientists and honestly believed they were in a collaborative partnership to end the fight against HIV. Gilead never dreamed that trust would be violated by these scientists filing for patent protection on Gilead’s crown jewel drug, Truvada, behind their back. There was a lot of emotion from our client in that courtroom after that verdict was finally read aloud. It was the closest I have felt to being in the US Attorney’s Office, representing victims, since I returned to private practice. I was ecstatic our firm was able to bring a fair and just result for Gilead, which has worked incredibly hard to end the HIV epidemic for over three decades now.”
Besides the aforementioned attorneys, others on the WilmerHale legal team were: Stephanie Lin, Isley Gostin, Ben Conery, Charlie Cox, Julius Jefferson, Gillian Farrell, Christina Luo, Sanaz Payandeh, Renna Ayyash, Stan Maderich, Leighton Crawford, MacLean Kirk, Jose Romero, Dale Broaddus, former colleague Elizabeth Trujillo, Emily Whelan, Deric Geng, Jonathan Cox, David Mlaver, Kevin Yurkerwich, Scott Greene, Wenli Gu, Jen Graber, Patrick Nyman, Fatou Amar, Liz McMahon, Rob Lemons, Lornie Martinez, Colleen McCullough, Sarah Yun, Victoria Moreno, Peter Merritt, Angela D’Andrea and Cheryl LoMaglio-Puleio.