Gilead Won’t Have to Pay Idenix Extra Damages in Hep C Case

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By Greg Langlois and Dana A. Elfin

Gilead Sciences Inc. won’t have to fork over additional damages in a patent case over the blockbuster hepatitis C drugs Sovaldi and Harvoni ( Idenix Pharmaceuticals LLC v. Gilead Sciences, Inc. , D. Del., No. 14-846-LPS, 9/22/17 ).

Following a December 2016 jury verdict assessing a record $2.54 billion in damages against Gilead, the drugs’ maker, for infringing a patent held by Merck & Co. subsidiary Idenix Pharmaceuticals LLC, Idenix asked the court to at least double the award because the jury found Gilead’s infringement was willful.

But in a Sept. 22 decision, Judge Leonard P. Stark of the U.S. District Court for the District of Delaware rebuffed Idenix’s request, finding Gilead’s infringement wasn’t egregious enough to warrant increasing the damages. The ruling illustrates patentholders may not always be able to win enhanced damages in infringement cases, even after the Supreme Court made the standards for awarding enhanced damages more flexible in a 2016 decision.

Gilead’s hepatitic C drugs generated $14.8 billion in sales in 2016, down from $19.1 billion in 2015, according to a February company press release. The declines stemmed from lower sales of Sovaldi and Harvoni, which were offset by sales of Epclusa, which the company launched in 2016.

Egregious Behavior Required

In Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923, 195 L. Ed. 2d 278, 118 U.S.P.Q.2d 1761, 84 U.S.L.W. 4386 (2016), the high court said courts may award enhanced damages in egregious patent infringement cases, where the patent holder can show the infringing party’s behavior is “willful,” “wanton,” “malicious,” “flagrant,” or even “characteristic of a pirate.”

The Halo decision only requires patent holders to show this by a “preponderance of the evidence,” as opposed to the more stringent “clear and convincing evidence” standard.

The parties in this case were battling over U.S. Patent No. 7,608,597, which covers methods and compositions for treating hepatitis C virus.

No Attorneys’ Fees

Idenix, based in Little Rock, Ark., also wasn’t entitled to attorneys’ fees, the court held, because the case wasn’t “exceptional” under the patent statute’s attorneys’ fees provision. Each side’s case had merit, and the parties didn’t act unreasonably during the course of the litigation, the court said.

The ’597 patent was assigned to Idenix and Universita Degli Studi di Cagliari, an Italian university that also was a co-plaintiff in the case.

A spokeswoman for Merck, based in Kenilworth, N.J., said the company is reviewing the decision and considering its options.

“Strong patent protection is essential to innovation,” Merck spokeswoman Claire Gillespie told Bloomberg BNA in a Sept. 25 email. “Given that it guarantees a period of return on investment, patent protection provides the research-based pharmaceutical and biotechnology industries with an incentive to invest in research and development.”

Gilead, based in Foster City, Calif., declined to comment.

Jones Day and Ashby & Geddes represented Idenix and Universita Degli Studi di Cagliari.

Fish & Richardson P.C. represented Gilead.

To contact the reporters on this story: Greg Langlois in Washington at glanglois@bna.com and Dana A. Elfin in Washington at delfin@bna.com

To contact the editor responsible for this story: Randy Kubetin at RKubetin@bna.com

For More Information

The redacted opinion is available at http://src.bna.com/sOJ.

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