Gilead Sciences is a bio-pharmaceutical research and development company that discovers, develops and commercializes innovative medicines in areas of unmet medical need.  Recently, Gilead lost a patent infringement case to Merck, another pharmaceuticals company, and was ordered to pay $200 million in royalties for a pair of hepatitis C drugs, Sovaldi and Harvoni.  The combined US sales of these two drugs reached $12.5 billion in 2015, with worldwide sales in excess of $19 billion.

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  • Possibility of Additional Damages Pending

 

According to documents presented during the trial, Merck patented several compounds in 2002, and in 2013 offered to license its patents to Gilead Sciences for 10% of US sales for all products containing the compound called sofosbuvir.

Sofosbuvir, which used some of the compounds patented by Merck, was itself developed by Pharmasset, a company subsequently acquired by Gilead for $11 billion.

Gilead called the 10% figure a “prohibitive demand,” and did not agree to the arrangement. In their own documents, they alleged that various claims on which Merck’s suit was reliant weren’t added to their patents until several years after the development of sofosbuvir. Prior to that time, Gilead argues, Pharmasset scientists submitted multiple patent applications of their own, as well as publishing additional research.

The $200 million in royalty damages was awarded by the California jury and was calculated based on a royalty rate of 4% applied to Gilead’s 2013-2015 US sales. This royalty rate was far below Merck’s request of 10%. In the next phase of the trial the jury will decide what royalty rate to apply to Gilead’s future sales.

Gilead Sciences is appealing the court’s decision.

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  • Never Gamble With Intellectual Property Rights

 

Cases like this are a prime example of how much money can be at stake when it comes to intellectual property rights. In many industries, the amounts involved can reach into the hundreds of millions of dollars.

The expertise of a seasoned patent damages expert is needed in order to work closely with the legal team to put forth a solid, well formulated damages analysis that specifically addresses the facts and circumstances of the case. Rogers DVS offers multiple areas of specialization relevant to such cases –  including financial damages analysis and intellectual asset consulting.

For further information on the services offered by Rogers DVS, read more about our firm here.

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