Gilead Sciences, Inc. v. United States

CourtUnited States Court of Federal Claims
DecidedDecember 30, 2020
Docket20-499
StatusPublished

This text of Gilead Sciences, Inc. v. United States (Gilead Sciences, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gilead Sciences, Inc. v. United States, (uscfc 2020).

Opinion

In the United States Court of Federal Claims No. 20-499C

(Filed: December 30, 2020)

___________________________________ ) Suit based on alleged breach of GILEAD SCIENCES, INC. ) contracts; motion to dismiss in ) which government points to Plaintiff, ) defenses asserted by plaintiff in ) earlier action filed by government v. ) against plaintiff; 28 U.S.C. § 1500; ) pleading a claim UNITED STATES, ) ) Defendant. ) ___________________________________ )

Ronald C. Machen, Jr., Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C. for plaintiff Gilead Sciences, Inc. With him on briefs were David B. Bassett, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Vinita Ferrera, Emily R. Whelan, George P. Varghese, Timothy A. Cook, Stephanie Lin, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA.

Walter W. Brown, Senior Litigation Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. for the United States. With him on briefs were Jeffrey Bossert Clark, Acting Assistant Attorney General, Civil Division, Gary L. Hausken, Director, Philip Charles Sternhell, Assistant Director, Amanda K. Kelly, Trial Attorney, Patrick C. Holvey, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C.

OPINION AND ORDER

LETTOW, Senior Judge.

This case arises out of five contracts between plaintiff, Gilead Sciences, Inc. (“Gilead”), and the Centers for Disease Control and Prevention (“CDC”), acting on behalf of the federal government. 1 These contracts consist of four Material Transfer Agreements (“MTAs”) and one Clinical Trial Agreement (“CTA”). Gilead and the CDC entered into these agreements as part of an ongoing collaboration on research “relating to the use of antiretroviral agents for prevention of HIV-1.” Compl. ¶ 4. Gilead alleges that “the [g]overnment is asserting patents that it secretly obtained in violation of the collaboration agreements,” Compl. ¶ 2, and that “[t]he [g]overnment

1References to the “United States,” the “government,” and the “CDC” all refer to defendant and its collective entities. breached its obligations under both the MTAs and the CTA,” Compl. ¶ 10. The context in which this case arises includes a suit filed by the government against Gilead for infringement of the relevant patents. See United States v. Gilead Sciences, Inc., No 19-2103MN (D. Del., filed Nov. 6, 2019). That action was instituted approximately five months before Gilead filed this suit. 2

Pending before the court is the government’s motion to dismiss the complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the Court of Federal Claims (“RCFC”). See Def.’s Mot. to Dismiss (“Def.’s Mot.”), ECF No. 11. After briefing, see Pl.’s Resp. to Def.’s Mot. (“Pl.’s Resp.”), ECF No. 12; Def.’s Reply to Pl.’s Resp. (“Def.’s Reply”), ECF No. 15; Pl.’s Sur- Reply to Def.’s Reply (“Pl.’s Sur-Reply”), ECF No. 18, the court held a hearing on Monday, December 14, 2020. The government’s motion to dismiss this action is based on lack of subject- matter jurisdiction and failure to state a claim. See Def.’s Mot. at 2.

The court concludes that Gilead’s claims for breach of contract are timely under 28 U.S.C. § 2501, as they accrued within six years of Gilead’s filing suit in this court. Furthermore, Gilead’s claims are not barred by 28 U.S.C. § 1500 because Gilead has only asserted defenses in the Delaware action, and relatedly the statute speaks in terms of a “claim,” not a defense. Lastly, Gilead has pled viable breach of contract claims to avoid dismissal under RCFC 12(b)(6). Accordingly, the government’s motion is DENIED.

BACKGROUND 3

Gilead “has brought to market more than a dozen products that have been approved by the FDA for the treatment and prevention of HIV.” Compl. ¶ 28. The company “has a long history of working with the scientific community,” including the CDC, “to promote basic scientific and clinical research on HIV, HIV treatment, and HIV prevention.” Compl. ¶ 39. The collaborations between Gilead and the CDC have taken the form of “many material transfer and related agreements over the past three decades.” Compl. ¶ 42.

The MTAs at issue in this case span from 2004 to 2014. Compl. ¶ 44. In each of these MTAs, “Gilead agreed to provide” certain compounds to the CDC “at no cost, to be used in HIV-1 research.” Compl. ¶ 45. “[U]nder each of the four MTAs,” Compl. ¶ 45, the government agreed to, inter alia, “promptly notify” Gilead of “any Inventions” derived from work performed under the agreements. E.g., Compl. Ex. 4 at 3. Each MTA defined “Inventions” as “any inventions, discoveries, and ideas that are made, conceived or reduced to practice.” E.g., Compl. Ex. 4 at 3. The government also agreed “to give serious and reasonable consideration to [Gilead’s] request for a non-exclusive or exclusive license on commercially reasonable terms under [the government’s] intellectual property rights in or to any Inventions.” E.g., Compl. Ex. 4 at 3. The MTAs at issue were amended as the collaborations progressed. See, e.g., Compl. Ex. 8.

2 This case was filed on April 24, 2020. 3 The recitations that follow do not constitute findings of fact, but rather are recitals attendant to the pending motions and reflect matters drawn from the complaint, the parties’ briefs, and records and documents appended to the complaint and briefs. 2 Also at issue in this case is a CTA, which the CDC and Gilead entered into on November 1, 2004. See Compl. Ex. 13 at 1. That agreement was amended three times beginning in October 2006. Compl. ¶¶ 54-56. Pursuant to this agreement, Gilead was to provide antiretroviral products to the CDC for a clinical trial in Botswana. See Compl. Ex. 13 at 2-3. The CDC agreed in turn “not to seek patent protection in connection with any inventions that derive from the use of the Study Drug in the Trial.” Compl. Ex. 13 at 2. As outlined in the amended CTA, Gilead provided the CDC with the pre-exposure prophylaxis drug Truvada and matching placebos. See Compl. ¶ 57.

On February 3, 2006, the CDC filed Provisional Patent Application No. 60/764,811 (“the ’811 Provisional”) with the U.S. Patent and Trademark Office (“PTO”). See Compl. Ex. 18. The ’811 Provisional “related to purported inventions that [the] CDC made in the course of the research conducted under the MTAs[] and using the compounds that Gilead provided under the MTAs.” Compl. ¶ 11. On January 31, 2007, the government filed non-provisional Patent Application No. 11/669,547 (“the ’547 Application”). See Compl. Ex. 19. Gilead alleges that the “CDC relied on information derived from the Botswana clinical trial to make decisions concerning the prosecution of the ’547 Application.” Compl. ¶ 11. On February 1, 2008, the CDC sent Gilead a draft of an article which outlined the study described by the ’649 MTA. Compl. ¶ 76. This article disclosed that five of the authors were “named in a US [g]overnment patent application related to methods for HIV prophylaxis.” Compl. Ex. 20 at 1.

In January 2011, “the CDC provided interim guidelines that explicitly directed physicians to prescribe the use of” Gilead’s Truvada, the drug used in the Botswana clinical trial, for pre- exposure prophylaxis. Compl. ¶ 81. A year later, in 2012, “with the encouragement and support of the [g]overnment,” Gilead sought and obtained approval from the FDA to market Truvada for HIV-1 pre-exposure prophylaxis. Compl. ¶ 82.

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