A
U.S. judge on Monday found a pattern of misconduct by Merck & Co
including lying under oath and other unethical practices, freeing Gilead
Sciences Inc from paying any damages for infringing Merck's patents
with its lucrative treatments for hepatitis C, Sovaldi and Harvoni.
The
dramatic ruling comes after a federal jury in San Jose, California, on
March 24 ordered Gilead to pay $200 million in damages, based on
findings that Merck's patents were valid.
U.S.
District Judge Beth Labson Freeman said Gilead proved that in the
process of applying for its patents, Merck deceptively used confidential
information from Pharmasset, Inc, a company Gilead bought in 2011.
Freeman
also said Merck cannot enforce the patents because Merck's own lawyer
gave inconsistent and untruthful testimony during the trial. "Merck's
acts are even more egregious because the main perpetrator of its
misconduct was its attorney," she said.
In
a statement, Merck spokeswoman Lainie Keller said Gilead's allegations
against the patents are without merit and the company would appeal. "The
judge's ruling does not reflect the facts of this case."
Gilead feels "vindicated" by the decision, spokeswoman Michele Rest said.
Gilead
had also been facing a demand from Merck for an ongoing royalty of at
least 12 percent of all future sales of the drugs, according to court
papers. Gilead made $23 billion on the two pills in the U.S. alone over
the last two years.
Pharmaceutical
firms such as Merck, which recently launched its own hepatitis C drug,
Zepatier, are trying to chip away at Gilead's dominant position in the
market for a new generation of drugs, which cure the liver disease in
well over 90 percent of patients.
Some
policy makers and insurers have criticized their costs. Harvoni, for
instance, lists at $1,125 per pill before discounts and $94,000 for a
12-week regimen.
The
case dates back to 2013 when Gilead and Merck sued each other, claiming
ownership of laboratory work underlying sofosbuvir, the active
ingredient in Gilead's drugs.
After
the jury verdict, Freeman separately dealt with Foster City,
California-based Gilead's accusations of Merck's unethical conduct in
obtaining the patents.
Merck, based in Kenilworth, New Jersey, countered that it had already known of the technology Gilead claimed was Pharmasset's.
Merck's
partner in the suit and co-owner of the patents, Ionis Pharmaceuticals
Inc, stood to receive 20 percent of any damages awarded Merck.
The
case is Gilead Sciences, Inc v Merck & Co, Inc, in the U.S.
District Court for the Northern District of California, No. 13-cv-4057.
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