Gilead Vs. Merck — How An Able Federal District Court Judge Encourages Settlement, In Close Cases, Near The End

On this nearly-silent, lazily drifting snow-flaked Saturday morning — with some hot coffee and OJ, I’ll elaborate a bit, on why I think we may yet see a settlement — and one perhaps well-below the $200 million jury award in this Hep C cures patent battle royalé. [Older prior backgrounder here.]

The federal trial court judge hearing this matter is using a well-worn tactic, where neither side is an absolute hands down winner — in a high stakes dispute. We mentioned mid-week that the parties spent six and one half hours with the Magistrate in San Jose, trying to settle the case, but no final deal was reached. Both sides are open to future talks, according to the order.

While the source of reporting isn’t particularly well-written, I’ll say I think the Courthouse News feed has likely captured an accurate quote from the able Judge Labson-Freeman, on the record. Do go read it all for context, but she is sending a clear message to Kenilworth with this remark — suggesting that Merck is in some substantial peril of losing the entire damages award, due to what appears to her to be deceptive (or at least wildly-inconsistent) testimony, from an internal Merck patent counsel. I’ve quoted it below — and the Judge uttered it, from the bench essentially right before the magistrate’s settlement conference. Here it is:

. . . .”I have taken great offense at the lies made by an attorney in this case,” [US District Court Judge] Freeman told Merck. “It’s not the death knell. You have bad facts, but that doesn’t mean I have decided you lose on this issue. . . .”

[Judge] Freeman asked both lawyers to file briefs that explore previous case law related to unclean hands and [other] equitable defense[s]. . . .

The central idea here is that the judge is broadly-hinting Merck ought to accept at least some of its winnings, by agreement with Gilead — or risk losing it all.

Of course, Gilead should recognize that “buying peace” now will save it quite a bit in legal bills, on two coasts — if endless appeals and post-trial proceedings ensue. As ever, we will keep you informed, though it may be a few months yet before a decision on the unclean hands portion of this battle is entered. I’m betting on a settlement prior to that. A smallish one, as I’ve long suggested. Onward, now — out into the snows, to get a work-out, and then visit a much older friend who’s under the weather. . . smile.

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