On Wednesday, the United States Court of Federal Claims denied a motion to dismiss from the Center for Disease Control (CDC) in a lawsuit brought by Gilead alleging breach of contract on grounds that the CDC attempted to illegally patent Gilead’s HIV prevention medication, Truvada.
Gilead reported that it entered into a contract with the CDC to research methods of treating and preventing HIV between 2004 and 2014. The agreement was to involve Gilead in providing the defendant with Truvada —a daily medication that greatly lowers the transmission risk for those exposed to HIV— in exchange for the CDC not patenting inventions derived from any research utilizing the provided drugs. Gilead asserted that the CDC violated the contract when it not only attempted to patent the Truvada formula itself, but also tried to require Gilead to license the drug from the CDC prior to selling the drug which it invented.
The defendant argued that the Court of Federal Claims lacked jurisdiction over the matter as the case fell outside the statute of limitations and was barred by a federal law that prohibited a lawsuit in federal court against the CDC while the same lawsuit was being adjudicated in a state court. Specifically, the CDC asserted that breach of contract lawsuits against the defendant must be commenced within six years of the plaintiff first suffering the consequences of the alleged breach —the day the CDC filed the patent application for the HIV drug formula at issue. Additionally, the defendant proffered that the plaintiff maintained a lawsuit in a Delaware state court for patent infringement, thus barring the court from hearing the current matter.
The appellate court disagreed with both arguments from the CDC. First, the court explained that the six year statute of limitations runs from the date the patent was actually received —June 2, 2015— not when the application was filed. Second, the judicial panel held that the test for whether a state court action precluded a federal court action against the CDC is whether the legal claims arose from facts that were substantially similar. Gilead’s federal case for breach of contract lacked such similarity as the state action for patent infringement could theoretically be successfully proven with or without the existence of a contract. As such, the court concluded, Gilead may proceed to trial in federal court concurrently with the Delaware state court litigation.
Gilead is represented by Wilmer, Cutler, Pickering, Hale, and Dorr.
