Hep C Drug Patent Verdict Faces Probe for Perjury

     SAN JOSE, Calif. (CN) — A federal judge will allow additional evidence as she decides whether to throw out a jury’s verdict in a hepatitis C drug patent case over possible perjury by someone from the winning side.
     U.S. District Judge Beth Labson Freeman granted pharmaceutical company Gilead’s request to provide more evidence as to why a $200 million verdict in favor of giant drugmaker Merck shouldn’t stand.
     The two companies have been embroiled in a patent fight over the development of a revolutionary treatment for hepatitis C, a potentially fatal virus that attacks the liver.
     In March, a jury awarded Merck $200 million, finding Gilead had infringed upon two of Merck’s patents as it developed sofosbuvir.
     The jury found that Merck’s discovery of a batch of nucleotides which eventually led to the creation of Gilead’s medication meant Merck was entitled to a portion of Gilead’s sales from December 2013 through the end of 2015.
     The hepatitis C cure, marketed by Gilead under the brand names Solvadi and Harvoni, earned the company about $19 billion in sales last year.
     However, since the jury’s verdict Gilead has exploited the “unclean hands” defense to assert Merck is not entitled to the $200 million after all. Specifically, Gilead claims that one of Merck’s patent lawyers, Phil Durette, lied under oath regarding how he obtained proprietary information that led to the prosecution of one of the patents at issue.
     Gilead says Durette was on a crucial 2004 phone call with scientists at Pharmasset, the small company that developed sofosbuvir. Gilead subsequently bought Pharmasset for $11 billion in 2011.
     Durette misrepresented his position on the phone call and also agreed to confidentiality provisions, which he subsequently violated when he prosecuted one of the patents at issue only after he realized Pharmasset was close to developing a cure for hepatitis C, Gilead claims.
     In his pretrial deposition, Durette told lawyers he was not on the phone call — an assertion he contradicted at trial.
     Gilead argues these bad-faith actions by Durette disqualify Merck from obtaining the royalties it seeks.
     Merck attorney Bruce Grenderson told Freeman the additional evidence should not be admitted, saying that Durette did not lie but instead forgot he was on a phone call and then later conceded he was on the call when offered evidence.
     “Mr. Durette stated quite clearly that he didn’t have a recollection,” Grenderson told Freeman during a hearing Friday afternoon in San Jose.
     Freeman — as she has maintained all along — said she was not buying it, noting that Durette’s several specific reasons as to why he couldn’t have been on the phone call means it wasn’t a simple matter of failing to recall.
     “I am outraged by what I consider to be untrue testimony,” Freeman said.
     However, she cautioned Gilead’s lawyers that even if Durette lied does not mean she will side with them on their “unclean hands” defense.
     “I might be with you all the way and you may prove every fact but it still doesn’t lead up to unclean hands,” Freeman said.
     In fact, Grenderson said that case law related to unclean hands shows that the actions of those who forfeited their ability to collect damages due to ethical violations were typically much more egregious than in the present case.
     “In all of these cases these people ended up in jail,” Grenderson said. “This is not a close case.”
     However, Gilead attorney Jonathan Singer said the fact that Durette was an attorney made the perjury particularly distasteful.
     “It’s an extraordinary remedy for extraordinary misconduct,” Singer said. “Durette was a member of the bar and an attorney. This is about the public’s confidence in the bar and in attorneys. That is what is at stake here.”
     Freeman once again noted her outrage at what she believed to be perjured testimony by a lawyer in the case.
     “What makes this case is the truthfulness of an attorney and that is serious,” Freeman said.
     However, noted holes in Gilead’s case, indicating that even if she did find unclean hands it would only relate to one of the two patents that Merck held.
     “I’m not sure it matters much,” she said during the hearing.
     Freeman said she will issue a written ruling as soon as she reviews the newly submitted evidence and the case law relating to unclean hands.
     Sofosbuvir has proven enormously effective at curing hepatitis C, an often fatal virus that attacks cells in the liver causing cancer, cirrhosis or liver failure.
     The drug is a nucleotide, or chemical compound, which essentially prevents the virus from replicating itself during the liver’s cell division process.
     Merck says it took out two patents that cover a group of nucleotides, which the company hypothesized would be effective after extensive research.
     “In its decision, the jury recognized that patent protections are essential to the development of new medical treatments,” Merck said. “The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection, and achieving these advancements required many years of research and significant investment by Merck and its partners.”
     Gilead says the patents are too general and have nothing to do with the specific scientific breakthroughs made at Pharmasset that led to the development of the cure for hepatitis C.

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