Judge cites misconduct of in-house lawyer in tossing $200M patent verdict
A federal judge in San Jose, California, is citing the rarely successful legal doctrine of unclean hands in tossing a $200 million infringement verdict obtained by Merck & Co. against Gilead Sciences in a patent dispute over a hepatitis C drug.
U.S. District Judge Beth Labson Freeman attributed much of the misconduct to an in-house Merck patent prosecution lawyer who is also a scientist, report Law.com, Bloomberg News and Reuters.
Freeman said the lawyer, Philippe Durette, “lied repeatedly at his deposition and at trial” and used confidential information to pursue patent claims. Though Durette no longer works at Merck, the company relied on his testimony at trial and his conduct can be imputed to the company, Freeman said.
Durette had said in his deposition that he didn’t take part in a 2004 conference call with Pharmasset Inc. that discussed the structure of the compound later used in the hepatitis C drug. Merck was exploring the possibility of collaboration with Pharmasset during the call and had agreed to a nondisclosure agreement that allowed Merck to test Pharmasset’s drug compound but not to disclose its chemical structure to others in Merck’s hepatitis C program.
Gilead acquired the compound when it purchased Pharmasset for $11 billion in 2011.
At trial, Durette experienced “sudden moments of purported clarity,” Freeman wrote. Durette said he had reviewed deposition exhibits and concluded he did play a role in the call. Durette’s participation in the call was a conflict because any information he learned about the compound’s structure would overlap with his patent prosecution docket for Merck, Freeman said.
Instead of withdrawing from patent prosecution because of the conflict, Durette continued to write new hepatitis C patent applications and to write new claims that targeted Pharmasett’s work, according to Freeman. He also falsely told Pharmasett during the call that he was within a firewall that would keep the information confidential.
Freeman concluded that Durette used the confidential information to amend patent claims filed by Merck 18 days after Pharmasett recorded its patent claim for the compound at issue. Durette waited until Pharmasset published the structure of its compound to give the appearance he learned it from a public source, Freeman said.
“Merck’s misconduct includes lying to Pharmasset, misusing Pharmasset’s confidential information, breaching confidentiality and firewall agreements, and lying under oath at deposition and trial,” Freeman wrote. “Merck’s acts are even more egregious because the main perpetuator of its misconduct was its attorney.”
Freeman also noted that Merck’s outside law firm failed to alert the court before trial that Durette would be changing his testimony and would no longer deny that he participated in the call. “Opening statement was not the preferred time for such a disclosure,” she wrote. Williams & Connolly represented Merck at trial, Law.com reports.
Merck said the ruling “does not reflect the facts of the case” and it plans to appeal, according to Law.com. A Williams & Connolly spokesperson told the ABA Journal it had no comment on the judge’s decision.
Updated at 12:50 p.m. to state that Williams & Connolly declined comment.
