Top Plaintiffs' Verdict by Dollar: Gilead Sciences Inc. v. Merck & Co. Inc., $200 million

Despite the case caption, it was Bruce R. Genderson of Williams & Connolly LLP and colleagues who, operating in effect as plaintiffs, persuaded a federal jury in San Jose in March to award client Merck $200 million on its claim that big pharma rival Gilead Sciences Inc. infringed patents on Merck's hepatitis C drug amid intense competition in the liver disease market. The twist in which the defendant became the plaintiff arose when Gilead sought a declaratory judgment to the contrary and Merck successfully argued against that move.

It was one of the largest U.S. verdicts of 2016. It opened the door for Merck to seek future royalty payments for drugs produced by Gilead — until U.S. District Judge Beth Labson Freeman voided the award three months later, after concluding that a key Merck witness, a retired company scientist and patent attorney, had testified falsely before and during the trial, convincing the jury that Merck made patented discoveries that led to the development of Gilead's lucrative Sovaldi and Harvoni medicines.

In a 65-page opinion, Freeman held that Merck forfeited its right to enforce the two patents at issue in the case, citing "numerous unconscionable acts" and "a pervasive pattern of misconduct by Merck and its agents."

Genderson, Merck's lead counsel, declined to comment on the case or on the stunning loss of the award, citing the appeal he and colleagues filed at the U.S. Court of Appeals for the Federal Circuit in November. Co-lead Stephen S. Rabinowitz of Hughes Hubbard & Reed LLP did not return a call for comment.

In the appeal, Merck contended that the "unclean hands" standard Freeman applied to the company's conduct at trial is inapplicable in the case because that standard is limited to misconduct that gives the prevailing side an unfair advantage or injures its opponent. Merck gained no unfair advantage and Gilead suffered no injury from the alleged misconduct, Merck argued.

Quoting Freeman, Merck's appeal said the judge "resorted to metaphor" when she wrote that the alleged misconduct "casts a darkness on this entire case that covers both patents-in-suit." It was Gilead who made the scientist a centerpiece of the case, not Merck, the appeal said. "The [scientist's] testimony the court challenged had no bearing on either patent's validity," Merck's appeal insisted. Gilead's reply is due this month.

— John Roemer