Hepatitis C Patent Falls for Non-Enablement, Wiping Out $2.5 Billion Infringement Verdict

from JDSupra:

In a hard-fought patent battle involving “groundbreaking” work by both parties, Chief Judge Stark of the U.S. District Court for the District of Delaware ruled that plaintiff Idenix’s patent for treating Hepatitis C virus (HCV) infection was invalid as a matter of law for lack of enablement.  The decision overturns a $2.5 billion award to Idenix, a Merck subsidiary.  The opinion provides valuable insight into the court’s thinking on enablement of method of treatment claims encompassing a large genus of therapeutic agents.

The lawsuit involved two blockbuster Gilead products for treating HCV infection, Sovaldi and Harvoni.  Prior to trial, Gilead stipulated that both products infringed the asserted claims of Idenix’s patent, U.S. Patent No. 7,608,597 (‘597 patent), which cover a method for the treatment of HCV infection by administering an effective amount of certain nucleosides.  After a two-week trial in December 2016, a jury found that Gilead failed to prove invalidity and awarded Idenix $2.5 billion in damages.

In a renewed motion for judgment as a matter of law (JMOL), Gilead urged the court to set aside the jury’s verdict on the basis of invalidity for lack of written description or non-enablement or in the alternative to reduce the jury’s damages award to $380 million lump sum payment.  In an opinion granting-in-part and denying-in-part Gilead’s motion for JMOL, the court addressed each of these requests, beginning with damages and then moving on to validity.

The court denied Gilead’s motion on damages.  The court found that the jury’s award of $2.5 billion based on a 10% royalty was supported by expert testimony relying on two Roche patent licenses, one with Merck (Idenix’s parent company) and the other with Pharmasset (which was acquired by Gilead).  Although the court found that Gilead “leveled powerful attacks” on Idenix’s expert’s analysis, and whether the Roche licenses were “comparable” to a hypothetical license between Gilead and Idenix, the court found “they are just that: factual attacks” that the jury implicitly rejected based on substantial evidence.  The court also rejected Gilead’s argument that Idenix’s expert improperly used Gilead’s entire products as a royalty base instead of a portion of those products, thereby failing to take account of Gilead’s substantial unclaimed contributions to the products.  The court disagreed, holding that substantial evidence supported the jury’s implicit finding that the asserted claims cover the active ingredient in Gilead’s products and that there is no unpatented or non-infringing feature in the accused products as a result.

The court then turned to invalidity. The court disposed of Gilead’s request for a judgment of invalidity for lack of written description, pointing to its denial of Gilead’s original and renewed motions for summary judgment on this ground.  As to enablement, the Court concluded that as a matter of law “no reasonable factfinder could find anything other than the ‘597 patent is not enabled.”

The court first identified structural limitations and functional limitations in the asserted claims, both of which had to be met by the nucleosides of the claims.  The court noted that, at Idenix’s urging, it construed the preamble of the claim, “a method for the treatment of a hepatitis C virus infection,” to be limiting and construed its “effective amount” to require an amount effective to treat HCV.  The court explained that the claims as construed therefore combine structural limitations with functional limitations.

The court found that it was undisputed that the structural limitations were literally met by an indeterminate number of compounds measured in billions and that a person of ordinary skill would be left with “likely, millions or at least many, many thousands” of compounds in attempting to practice the patent even if certain compounds were excluded based on experience and “common sense.”  It was undisputed that “far fewer” compounds would also satisfy the functional limitations of the claim of being effective to treat HCV infection…

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