Moderna Loses Bid To Shift Liability In COVID-19 Vaccine Patent Case
In May of last year, Moderna urged the court to dismiss the lawsuit. It claimed that because the company produced its vaccine for the government's widespread vaccination campaign, the United States was the proper target of the claims.
Despite having the support of the US government, Moderna Inc. (MRNA.O) was unable to convince a federal judge on Friday that the US should have been sued over its COVID-19 vaccine rather than Moderna Inc. For the second time, U.S. District Judge Mitchell Goldberg decided that Moderna had failed to establish that Arbutus Biopharma Corp. (ABUS.O) and Genevant Sciences GmbH’s case against the government was appropriate.
A Genevant representative declined to offer any insight into the choice. Requests for comment on Friday were not immediately answered by representatives of Moderna, the US Food and Drug Administration, or the US Department of Health and Human Services. Last year, Cambridge, Massachusetts-based Moderna was sued for patent infringement by Warminster Township, Arbutus, and Genevant, a partnership between Arbutus and Roivant Sciences Ltd. (ROIV), which is situated in Pennsylvania. O), demanding royalties on Moderna’s multi billion-dollar COVID vaccines.
In May of last year, Moderna urged the court to dismiss the lawsuit. It claimed that because the company produced its vaccine for the government’s widespread vaccination campaign, the United States was the proper target of the claims. It cited a law that had previously been used to prevent patent disputes from obstructing the supply of war materials during World War I.
Goldberg rejected Moderna in his initial ruling, which was published in November. In his opinion, Moderna has not yet shown that the photographs were produced “for the government,” and he speculated that it may have been an “incidental beneficiary” instead.
The U.S Justice Department claimed in a court statement released last month that it agrees with Moderna’s argument and maintains that the company shouldn’t be held liable for bullets supplied under its contract with the government as part of Operation Warp Speed. According to Goldberg’s Friday decision, Moderna’s plea was still premature since further details about the scope of the company’s government contracts were still being gathered.
Pharmaceutical companies and the US government disagree over how to handle claims of patent infringement against Moderna’s COVID-19 vaccine.
The United States submitted a brief letter in response to Judge Goldberg’s request for a briefing on the government’s statement of interest to provide more evidence for its claim that one of two government contracts at issue in Arbutus and Genevant’s lawsuit should hold the U.S government, not Moderna, accountable for infringement damages.
The U.S. government contends that the contract’s express authorization and consent to use and produce any patented invention included in Moderna’s vaccine nullifies any requirement under Section 1498 to demonstrate that Moderna was directly under the control of the government, which would be necessary if the government’s authorization and consent were only criteria.
The federal government argued that where there is an express grant of authorization and consent, the question of whether a procurement contract is for the benefit of the government is a truncated enquiry, according to the Federal Circuit’s 2007 ruling in Sevenson Environmental Services, Inc. v. Shaw Environmental.
The letter concludes by stating that even though the court should decide the government’s arguments for authorization and consent, section 1498 and the authoritative case law interpreting it make it clear that the Government’s express grant of authorization and consent should typically be the deciding factor.
Moderna: Contract Redaction Problems Are Solved by the Government’s Declaration of Interest
Defendant Moderna asserted that the government’s statement of interest answered the concerns that had prevented Judge Goldberg from granting Moderna’s Rule 12(b)(6) petition to dismiss Arbutus and Genevant’s patent In its response to the government’s declaration of interest, the company makes infringement accusations. Moderna contends that the government’s indication of interest indicates a “unequivocal affirmation that it accepted any duty for any vaccine procured” following the signing of the first of two contracts with the government.
Although the government’s declaration of interest is not conclusive, Moderna said that courts have frequently accepted official claims that a certain commodity is given “for the Government” as proof of the government’s authority and approval without the need for additional discovery.
Moderna cited Advanced Software Design Corp. v. Federal Reserve Bank of St. Louis (Federal Circuit, 2009). The government’s expression of interest has been accepted by courts as sufficient “after-the-fact” authority and consent for Section 1498, according to several examples cited by Moderna.
Additionally, Moderna claimed that the district court wouldn’t need to conduct any additional discovery before making a decision on its Rule 12(b)(6) motion to dismiss Arbutus and Genevant’s claims based on the government contract, including the extensive Federal Acquisition Regulation (FAR) procurement contract provisions now supported by the government’s statement of
Courts in at least the Central District of California have determined that Section 1498 transferred infringement responsibility from private defendants to the federal government, regardless of whether the contract could be fulfilled using non-infringing materials. This is because the same FAR laws provide complete, express power and permission.
Moderna argued that the U.S. Court of Federal Claims should be the only venue for resolving infringement claims arising under the government contract, including the FAR provisions at issue, and that the District of Delaware court should not conduct fact and expert discovery into vaccine batches produced under that specific contract.
For the Section 1498 Government Prong Investigation
The plaintiffs note that other politicians, including Senator Elizabeth Warren (D-MA), have promoted the government’s incorrect interpretation of Stevenson by urging the federal government to use Section 1498 to pursue drug price reduction plans by acquiring generic medications under a government use licence. The plaintiffs assert that the attempt by the federal government to exclude the “for the Government” element from the probe is “as clear as it is baseless” in this situation.
According to Larson, the federal government does not get the necessary advantage from a government’s general interest in the provision of medical services, even if the government pays for or reimburses such services, for Section 1498’s responsibility shifting provisions to be applicable.
The full underacted terms of the contracts Moderna and the government entered into, the negotiations that preceded those contracts, and any discussions of the plaintiffs’ patents in connection with attempts to avoid the effects of inter parts review (IPR) estoppel by shifting liability under Section 1498, according to Arbutus and Genevant, are all matters that are relevant to the Section 1498(a) investigation.
The plaintiffs contend that bringing their claims before the Court of Federal Claims, where there is no right to a jury trial under the Seventh Amendment, would prejudice them.This argument is made in addition to the fact that applying Section 1498 later in the case would allow for duplicate proceedings on infringement and validity arguments.
edited and proofread by nikita sharma
