Gilead Challenges the U.S. Government Over Drug Patents

The battle between pharmaceutical giant, Gilead Sciences Inc. (“Gilead”), and the U.S. government continues after Gilead filed an action in the Court of Federal Claims (which hears claims for money damages by companies that contract with the government) against the U.S. government for breach of contract. The claims relate to Truvada, Gilead’s HIV preventative drug, and a newer version of the drug branded Descovy.

Gilead previously held contracts with the U.S. government called “material transfer agreements”, whereby Gilead agreed to provide the Centers for Disease Control (“CDC”) with drugs for research purposes. Pursuant to those material transfer agreements, the government had agreed to give "serious and reasonable consideration" to requests by Gilead for licenses to intellectual property stemming from the contracts and not to seek intellectual property protection for any inventions arising from the research.

Gilead alleges that the U.S. government subsequently applied for a patent using information from that research, and that it did not provide Gilead with the opportunity to obtain a license.

The U.S. government argued that the claim was barred by a six-year limitation period that began running in 2006, when the patent application was made. However, Senior Judge Charles Lettow recently ruled that Gilead’s injury occurred no earlier than 2015 – when the government’s patent was issued – and therefore Gilead’s claim was not barred by the statute of limitations.

Authors: Jay Piett, 2020/2021 Articling Student-at-law