Claims court finds CDC broke Gilead deal over HIV research

The U.S. Court of Federal Claims has ruled that the Centers for Disease Control and Prevention failed to live up to at least some terms of its research agreement with Gilead Sciences by failing to notify the drugmaker about patents the agency had filed to cover HIV treatments.

The sealed ruling from Judge Charles F. Lettow came down Monday, following a seven-day bench trial that took place this past June. At the center of the case was a research collaboration the CDC undertook with Gilead in 2006 to develop a medication to treat HIV.

In the years since, Gilead began marketing an HIV treatment called PrEP, under the brand name Truvada, which has come under fire repeatedly for its price tag. In a congressional hearing in 2019, Gilead CEO Daniel O’Day testified that the company sells a month’s worth of the drug for $1,780.

Later that year, the CDC sued Gilead in Delaware federal court, accusing the drugmaker of making billions of dollars selling drugs that infringed patents the agency had filed using research from that collaboration. A little less than a year later, the company responded by suing the agency in Judge Lettow’s court.

The case in Delaware over whether Gilead’s products infringe the CDC’s patents is ongoing and is currently set to head to a jury next year. But Judge Lettow now says that the CDC’s researchers had violated at least one of the terms of that 2006 agreement in order to file for those patents in the first place.

“The government breached the [material transfer agreements] by failing to provide prompt notification,” the judge indicated in a filing.

At the claims court, Gilead had accused the CDC’s researchers of breaking the terms of the 2006 agreement by failing to notify the company that the agency was using research from their collaboration to file for patents.

Now, it appears Judge Lettow agrees, though the opinion itself remains under seal. Lawyers for both sides have until Nov. 29 to submit any redactions before the opinion is made public.

In the filings, the CDC’s lawyers had argued that “the form and timing of notification was not specified” in the language of those research agreements and that the requirement of notification “was not tied to the filing of patent applications.”

Besides, Gilead should have been aware the CDC had filed for the patents anyway, since “the government’s actions in obtaining the … patents were public, open and notorious, and knowable to Gilead.”

Gilead’s lawyers responded by arguing that any “evidence of purported compliance amounts to a trail of breadcrumbs — an after-the-fact, litigation-driven trail that was mapped only by lawyers many years after the relevant events.”

Judge Lettow, however, noted that he had yet to make a decision on whether the CDC had breached the language of any of the clinical trial agreements that the agency had inked with Gilead.

According to the drugmaker, the agency had agreed both to not “seek patent protection in connection with any inventions that derive from the use of Gilead’s drugs in the clinical trials” and to “put the results of its clinical trials in the public domain for all to use without obligation or compensation to CDC.”

The agency had argued that it didn’t break that agreement because “none of the trial ‘results’ were cited in the … patents or their prosecution.”

Representatives for both Gilead and the CDC did not respond to requests for comment on the ruling. 

Gilead Sciences is represented by David B. Bassett, Ronald Machen, Vinita C. Ferrera, Emily R. Whelan, George P. Varghese and Timothy A. Cook of WilmerHale, and Frederick L. Cottrell III, Kelly E. Farnan and Alexandra M. Ewing of Richards Layton & Finger PA.

The federal government is represented in-house by Walter W. Brown, Philip Charles Sternhell, Patrick C. Holvey, Carrie E. Rosato, Lucy Grace D. Noyola, Matthew David Tanner, Sosun Bae and Conrad J. Dewitte Jr. of the U.S. Department of Justice’s Civil Division, Commercial Litigation.

The case is Gilead Sciences, Inc. v. USA, case number 1:20-cv-00499, in the U.S. Court of Federal Claims. Law360