Federal Judge Beth Labson Freeman of San Jose has found that that Merck & Co. lied to both a business partner and to the court itself. Throwing out a patent infringement judgement that the major pharmaceutical company had previously won against Gilead Sciences, Judge Freeman also overturned a $200 million jury award granted to Merck in the case.
The case involved Gilead’s treatment for the hepatitis C virus known as Sovaldi, one of the most profitable drugs on the pharmaceutical market. The patents-in-suit, according to Law360, were U.S. Patent Nos. 7,105,499 and 8,481,712.
Why Gilead may not have to pay rival Merck $200M after all https://t.co/Kc8No44vtY
— Fortune (@FortuneMagazine) June 7, 2016
Judge Freeman ruled that Merck’s dishonest conduct included misusing confidential information and lying under oath at deposition and trial.
Merck had won a jury award in March, after the company’s representatives accused Gilead of patent infringement regarding Sovaldi. More recently though, Gilead accused Merck of misconduct, disagreeing with the earlier jury award.
Freeman said she found that Merck committed “numerous unconscionable acts.” The misconduct involved interactions with the company that invented Sovaldi, Pharmasset. Pharmasset was later acquired by Gilead for $11 billion.
“Merck’s misconduct includes lying to Pharmasset, misusing Pharmasset’s confidential information, breaching confidentiality and firewall agreements, and lying under oath at deposition and trial,” Freeman announced.
Freeman ruled that Merck’s behavior was “systematic and outrageous deception in conjunction with unethical business practices and litigation misconduct.”
Retired Merck patent attorney Phillippe Durette, according to Freeman, repeatedly lied in a deposition. Once his deposition was shown false, Durette blamed his deposition’s inconsistency with the truth on a faulty memory, according to L.A. Times.
“It is overwhelmingly clear…,” Freeman ruled, “that Dr. Durette sought at every turn to create the false impression that Merck’s conduct was aboveboard.”
— Los Angeles Times (@latimes) June 8, 2016
Freeman said that it was her judgement that Merck “sponsored and encouraged” Durette’s misconduct. The L.A. Times declared that Merck’s “reputation for integrity will carry a value of less than zero.”
Merck’s reputation was at least partially tarnished prior to Freeman’s judgement though, some say.
Merck & Co. Inc. was accused in a court filing of refusing to respond to a discovery request asking for the efficacy of the mumps vaccine as a percentage. Two of Merck’s former scientists, turned whistleblowers, stated that Merck deliberately falsified tests in order to make the mumps component of its MMRII vaccine appear more effective. The whistleblowers’ lawsuit had been originally filed in 2010 and asserted that Merck deliberately skewed the efficacy tests of the MMRII by actually adding animal antibodies to the blood samples that were to be tested, according to the whistleblowers. The scientists said that the false efficacy has allowed Merck to prevent competition in the MMR market. It all led to an antitrust class action against Merck by some of the purchasers of the mumps vaccine.
Of course, this year, Merck also finally came to an agreement in a multi-district class action lawsuit that had been pending in New Jersey federal court, without any admission of liability or wrongdoing. Merck reached a settlement with persons who purchased Merck securities and persons who aimed to recover damages under the federal securities laws statements pertaining to Vioxx. The drug Vioxx was blamed for more than 3,400 deaths, and over time, Merck reportedly has paid billions to settle lawsuits and cover legal costs pertaining to Vioxx.
According to Drugwatch, Merck employs almost 70,000 people and operates both a pharmaceutical division and an animal health division. Drugwatch says Merck is also involved in lawsuits pertaining to other products, including Fosamax, Januvia, NuvaRing, and Propecia.