888 F.3d 1231
Fed. Cir.2018Background
- Merck and Ionis (formerly Isis) prosecuted broad Markush patent applications (leading to U.S. Pat. Nos. 7,105,499 and 8,481,712) claiming classes of nucleoside analogs and methods to treat HCV; Gilead later commercialized sofosbuvir (Sovaldi/Harvoni).
- Pharmasset (later acquired by Gilead) invented PSI-6130, a single‑ring nucleoside with 2′-methyl (up) and 2′-fluoro (down); Pharmasset disclosed PSI-6130 to Merck under a firewall and confidentiality regime and later published the Clark application claiming PSI-6130.
- Dr. Phillipe Durette, a Merck chemist-turned-patent-attorney, participated in a March 17, 2004 Merck–Pharmasset call where PSI‑6130’s structure was disclosed despite the agreed firewall; he nevertheless continued to prosecute Merck’s related HCV patent applications.
- In February 2005, Merck (through Durette) amended claims in the application that became the ’499 patent to a narrower subgenus that encompassed PSI‑6130-type structures; the timing suggested the amendment tracked Pharmasset’s Clark publication.
- Gilead sued for declaratory judgment of invalidity and noninfringement; the jury found Merck’s patents valid and infringed, but the district court after a bench trial held Merck’s conduct (pre‑litigation firewall breach and Durette’s false testimony) amounted to unclean hands and barred enforcement of both patents; court also awarded fees.
Issues
| Issue | Gilead's Argument | Merck's Argument | Held |
|---|---|---|---|
| Whether Merck’s pre‑litigation conduct and litigation testimony support an unclean‑hands defense barring enforcement | Merck learned PSI‑6130 improperly via a firewalled call and used that knowledge to amend claims that advantaged its patent position | Misconduct was not sufficiently connected or material to the equity sought; internal policies and prosecution differences negate causation | Court affirmed: misconduct (firewall breach + continued prosecution) had an immediate/necessary relation to the patents’ enforcement and supports unclean hands |
| Whether Dr. Durette’s deposition and trial testimony constituted intentional falsehoods that support equitable relief | Durette (sponsored by Merck) lied about participating in the March 2004 call and downplayed Pharmasset’s role in the 2005 amendments, infecting Merck’s litigation position | Testimony was credible or at least not sufficiently material to bar enforcement | Court affirmed: testimony was intentionally false, material to validity/derivation issues, and supports unclean hands |
| Whether the February 2005 narrowing amendment was causally tied to the improperly acquired knowledge | Pharmasset’s disclosure (and Durette’s participation) motivated narrowing to reduce prosecution risk and target PSI‑6130 subgenus | The Clark publication and existing claim scope explain the amendment; pre‑amendment claims already encompassed PSI‑6130 so no causal benefit from misconduct | Court found adequate evidence that Durette’s knowledge from the call influenced the amendment and that the timing and testimony supported causation |
| Whether unclean hands as to the ’499 patent also bars enforcement of the related ’712 patent | The same misconduct and Durette’s role in prosecuting both patents infected the whole litigation; testimony bore on both patents’ shared specification | Misconduct relating to one patent should not automatically defeat unrelated claims under another patent | Court held no abuse of discretion: litigation misconduct and Durette’s central role connected both patents such that unclean hands extended to the ’712 patent |
Key Cases Cited
- Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933) (unclean‑hands doctrine bars equitable relief when misconduct has immediate and necessary relation to the matter in litigation)
- Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945) (unclean hands prevents equity relief for parties tainted by bad faith related to the controversy)
- Northbay Wellness Grp., Inc. v. Beyries, 789 F.3d 956 (9th Cir. 2015) (discusses equitable balancing and review standards for unclean‑hands determinations)
- Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc) (explains limits on inequitable‑conduct findings based on prosecution communications; distinguished but noted)