Offer to license by Merck leads to to lawsuit

Offering a license deal can sometimes be hazardous, as Merck found out in the Sovaldi business. Separately, buying a company that had a previous research agreement with a third party can be problematic.

An article in the Wall Street Journal titled Hepatitis C Spurs Unusual Patent Wars Among Big Drug Makers includes the text


As for Merck, Gilead filed a preemptive lawsuit after receiving a phone call from a Merck executive who proposed licensing two Merck patents to Gilead in exchange for a 10% royalty on sales of all medicines including Sovaldi. Gilead called this a “prohibitive demand.” Merck later responded in court by claiming that Sovaldi infringes on its patents that cover compounds related to the active ingredient in Sovaldi.

Roche, meanwhile, claims it has rights to Sovaldi thanks to a decade-old research collaboration with Pharmasset, which developed the drug and was purchased by Gilead two years ago for more than $11 billion. Roche wants an exclusive license and claims Gilead infringed on its rights. A Roche spokeswoman tells the Journal that an arbitration decision is expected later this year.