UPDATED: Opening Statements, In Potential $3 Billion Patent Case: Merck v. Gilead, Via Bloomberg

MRK-GIL-3B-2016 First off — let’s be clear: the damages here (if any there be) are (as I’ve long intoned) not likely to be anything near what Kenilworth is hoping for — i.e., not remotely near a 10 per cent running-royalty on all Gilead sales of Harvoni®/ Solvaldi® — those pricey but wonderful Hep C cures.

Nope, I’d bet they will be a fraction of that, even if Merck ultimately prevails on its patent claims here.

But it will make for good bluster, in the federal District trial court room, in the mean time. In fact, Bloomberg is already covering it, blow-by-blow. So it seems Judge Freeman apparently decided that Gilead would go first, since it is a declaratory judgement case, brought by Gilead in the first instance in California’s federal courts.

The two sides each promise to pummel one another — (in Merck’s arguments) over the fact that Gilead paid over $11 billion to acquire the company that claimed to hold the rights to the drug candidate. And in Gilead’s argument, the lawyers will seek to paint Merck as a real life Jabba-the-Hutt, strong-arming poor Gilead, when it is already sitting in a powerful, lucrative position, in the Hep C space. More specifically, Gilead may later argue that Merck filed its patent applications only after learning some of the art, by talking confidentially to the same company Gilead bought — when Merck was considering a purchase of that same company. Fascinating. Here’s a bit from Bloomberg, just now — but I told you this would be entertaining:

. . . .Gilead plans to show jurors that scientists were working on the foundation for its medicine at least as early as 2001, a year before Merck got the patent rights that it’s seeking to enforce in the case, Juanita Brooks, a lawyer for the world’s largest biotechnology firm, said Monday during opening arguments at a trial in federal court in San Jose, California. She said Gilead owes the success of its drug not to Merck but to laboratory research done 15 years ago by Pharmasset Inc., which Gilead acquired in 2011 for $11 billion.

“It’s clear whose invention this is,” Brooks told the jury. “It’s clear this is Pharmasset’s invention and Gilead’s acquisition. So why are we here?”

Merck’s lawyer countered that the key invention at issue derived from work by his Kenilworth, New Jersey-based client “before it was ever even a figment of the imagination at Pharmasset.” Merck alleges that immediately after the company published its patent in 2002, Pharmasset used it to develop what would later become the compound sofosbuvir.

“Gilead wants you to think Merck’s patents are based on Pharmasset’s inventions, but that’s just not true,” attorney Bruce Genderson said in his opening statement. “They were based on Merck’s own work over years. . . .”

Stay tuned — this promises to be some reasonably good theater, as each side hammers the other about whether multiple billions of dollars amount to a large — or small — chunk of change. Onward, with a smile. . .

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