Sovaldi patent case hits the UK courts – decision expected Q4 2014

November 2014 | EXPERT BRIEFING | INTELLECTUAL PROPERTY

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Sovaldi is Gilead Sciences’ blockbuster oral drug treatment for hepatitis C virus (HCV) infection. It accounts for approximately half of Gilead’s current revenues. It has been hitting the news headlines recently, both for the hefty sums being required of payers to gain access to the drug and its projected global sales of $6bn, for this year alone. In addition, Gilead has recently had an indication of approval of a new product from Europe’s drug regulator, the European Medicines Agency, that contains a combination of the active molecule in Solvaldi, sofosbuvir, and another compound, ledipasvir.

Sofosbuvir was initially developed in the labs of an American company called Pharmasset. Pharmasset was bought by Gilead Sciences Inc. in 2012 for $11.1bn, despite a rather complex patent landscape and contractual claims over the rights to the sofosbuvir molecule from Roche, deriving from a deal between Roche and Pharmasset in the early stages of drug discovery. Gilead announced on 14 August 2014 that it had prevailed in an arbitration with Roche over the exclusive rights to sofosbuvir. This was an important outcome for Gilead, since it removes a direct challenge to Gilead’s rights to the product and its revenues. However, further legal battles are now being played out globally between another company, Idenix Pharmaceuticals, Inc. and Gilead.

Last year, Idenix commenced a program of asserting its patent rights against Gilead, with infringement lawsuits filed in the US, then in France, Germany and the UK. The UK courts are well known as a venue for the speedy resolution of disputes. In particular, the English Patents Court will sometimes hear claims in relation to a granted patent well ahead of the courts of other countries, not least because an early decision can sometimes promote settlement between the litigating parties.

Idenix’s patent infringement claim in the UK court against Gilead started in early October, with the trial likely to last about three weeks and a decision likely to be made public in November 2014, or possibly in early December. A win by Idenix on the issue of patent infringement would entitle it to claim a significant chunk of royalties from the UK sales of Sovaldi, but such a win would be contingent upon Idenix’s patent surviving a validity challenge from Gilead, which is being aggressively pursued. This is a common tactic in patent litigation, for those accused of patent infringement. If the validity of the patent can be successfully challenged, i.e., if a challenger can prove that the patent monopoly should not have been granted, it may escape the consequences of a finding of infringement.

This part of the case involves a complex fight between Gilead and Idenix about who can lay claim to the earliest written disclosure in a patent document of the sofosbuvir molecule. The original inventors of the relevant Pharmasset patent application were two individuals employed by Pharmasset Inc. (a company domiciled in the state of Georgia, US). The relevant contracts of employment made provision for inventions to be assigned to their employer, Pharmasset Inc. However, the subsequent patent application was made in the name of Pharmasset Ltd., of Barbados, i.e., a different Pharmasset company. In simple terms, Idenix contends that Gilead cannot show the requisite chain of contracts going back to the inventors that would allow Gilead/Pharmasset to establish the earliest date. Even though this aspect of the dispute between Idenix and Gilead has already been made public (in the records at the European Patent Office), there has not yet been a definitive ruling on this issue and so it is possible that the English Patents Court may be the first, with at least some likely impact on the cases that follow in other countries. In the UK, however, the appeal process would then play out, possibly adding another 2-3 years to the timeline before a final decision. In the meantime, Gilead would presumably carry on selling Sovaldi to the UK National Health Service, the drug having had a preliminary sign-off by drug price regulator (NICE) in August 2014.

Hepatitis C is thought to affect around 2.5 percent of the world’s population. The overall market for hepatitis C drugs is set to grow annually at a rate of over 18 percent per year until 2022 and Solvaldi is expected to take a major chunk of this expanding pie. Small wonder then that Merck & Co. announced earlier this year that it was buying Idenix. By doing so, Merck will not only gain access to Idenix’s hepatitis C drug development portfolio, but also the chance to acquire a slice of the revenues from Sovaldi, provided that at least some of the pending patent infringement claims against Gilead are resolved in favour of Idenix.

Dr Duncan Curley is a patent specialist at Innovate Legal. He can be contacted on +44 (0)20 7936 9280 or by email: duncancurley@innovatelegal.co.uk.

Dr Duncan Curley

Innovate Legal