Judge Allows More Evidence in Patent Dispute After Gilead Says Merck Attorney Lied -- Update

By Peter Loftus 

A federal judge has allowed Gilead Sciences Inc. to submit additional evidence in a drug-patent dispute with Merck & Co., after Gilead claimed a former Merck patent attorney lied under oath in the case.

In March, a federal jury in San Jose, Calif., ordered Gilead to pay Merck $200 million after finding that two U.S. patents held by Merck and its partner, Ionis Pharmaceuticals Inc., were valid and infringed by Gilead's multibillion-dollar hepatitis C drugs, Sovaldi and Harvoni. The trial arose from Gilead's 2013 lawsuit seeking a judgment that the Merck patents were invalid.

The patents cover a range of compounds treating hepatitis C. Merck recently began selling its own hepatitis C drug, Zepatier.

After the jury verdict and award in March, U.S. District Judge Beth Labson Freeman presided over a bench trial in which Gilead argued it shouldn't have to pay Merck because Merck was dishonest in obtaining its patents. Gilead said that in 2004, Merck patent attorney Philippe Durette had a conference call with employees of Pharmasset Inc., in which he learned the chemical structure of an experimental hepatitis C drug that Pharmasset was developing, code-named PSI-6130. Gilead later spent more than $11 billion to acquire Pharmasset and its hepatitis C drugs.

Gilead said Mr. Durette misused what he learned on the call to subsequently change claims in pending Merck patent applications in a way that would cover Pharmasset's technology.

A Merck spokeswoman said the jury reached the correct verdict, and Merck believes the court will uphold it. Merck said Gilead's arguments about Merck's conduct in obtaining its patents are without merit.

Judge Freeman's final decision in the bench trial is pending. On April 22, Gilead asked the judge to reopen the record for the bench trial to allow it to submit additional information, claiming Mr. Durette "lied on a critical issue in this case." At a hearing Friday, the judge granted Gilead's request.

The 2004 call was part of confidential negotiations over a potential deal for Merck to license PSI-6130 from Pharmasset, a deal that never materialized, Gilead said.

In a deposition last year, Mr. Durette said he wasn't involved in any such call, according to a Gilead court document.

But at the March trial, he changed his story and testified he now remembered he was present for the call and learned the structure of the compound, according to Gilead. He said he had earlier forgotten about the call, according to Gilead.

Gilead wants to submit to the court additional excerpts of Mr. Durette's deposition to give the judge a more complete record on which to assess his conduct and candor.

Merck said in a court document that Mr. Durette initially didn't remember being on the 2004 conference call, and that he acted properly because he waited to change Merck's patent applications until after Pharmasset published the structure of PSI-6130.

Mr. Durette couldn't immediately be reached to comment Monday.

Write to Peter Loftus at [e-mail]

(END) Dow Jones Newswires

May 02, 2016 19:42 ET (23:42 GMT)

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