“Importantly, none of the parties that have alleged infringement are seeking an injunction to stop the sales of Spikevax® or Comirnaty®. Instead, all such plaintiffs seek monetary damages based on the sales of those products.”
Substantial patent litigation activity occurred in the mRNA space in 2022, involving nearly all of the major mRNA and lipid nanoparticle (LNP) pioneers. Since this is the most significant happening in this space with respect to IP in 2022, this post will provide an overview of that activity as well as a summary exposure analysis.
Summary of 2022 Litigation Activity
On February 28, lipid pioneer Arbutus and its exclusive licensee Genevant sued mRNA pioneer Moderna in the U.S. District Court for the District of Delaware. The complaint contains allegations that Moderna infringed U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 through, inter alia, Moderna’s sales of its Spikevax® vaccine product. The key patents-in-suit relate to four-lipid delivery systems designed to protect fragile mRNA “payloads” post-injection and release them once inside a recipient’s cells. Moderna moved to dismiss certain claims relating to Spikevax® made and sold to the U.S. government (the motion was based on 28 U.S.C. § 1498, which requires patent-holders to seek redress from the U.S. government in the U.S. Court of Federal Claims whenever an invention covered its patent “is used or manufactured by or for the United States without a license”). The court denied the motion, Moderna answered the complaint on November 30, and discovery has not yet commenced.
On March 17, lipid and SiRNA pioneer Alnylam sued Moderna and Pfizer separately in the District of Delaware. The respective complaints contain allegations that of Moderna and Pfizer each infringed U.S. Patent No. 11,246,933 by using Alnylam’s claimed cationic lipids in their vaccine products. On July 12, 2022, Alnylam filed new separate suits against Moderna and Pfizer (and this time including Pfizer’s collaborator and mRNA pioneer BioNTech) also in the District of Delaware, for infringement of U.S. Patent No. 11,382,979, which issued the same day the suit was filed and has claims directed to lipid nanoparticles and related methods of preparation. The March and July Moderna and Pfizer/BioNTech cases were each separately consolidated and discovery has commenced in each case. Similar to the Arbutus case, in the Alnylam v. Moderna case, Moderna moved to dismiss certain claims under 28 U.S.C. § 1498 but the court has not ruled on that motion to date.
On March 18, a day after the initial Alnylam lawsuits were filed, lipid pioneer Acuitas sued Arbutus and Genevant in the U.S. District Court for the Southern District of New York seeking a declaratory judgment that the BioNTech and Pfizer vaccine product Comirnaty® does not infringe the six Arbutus patents asserted in the Moderna case plus three other Arbutus-owned patents directed to LNPs (U.S. Patent Nos. 9,006,417, 9,404,127, and 9,518,272) and that the subject Arbutus patents are invalid. Acuitas alleged that Comirnaty® contains “the lipids and lipid nanoparticles innovated by Acuitas” that are grounded in certain LNP-based collaborations between Acuitas and BioNTech and Pfizer. Since Acuitas has itself apparently not been accused of infringement and does not sell the Comirnaty® product, one of the key early issues in this case is whether Acuitas has standing to sue. Arbutus and Genevant have moved to dismiss on these grounds; that motion is pending and discovery has not yet commenced.
Several months later, on July 7, mRNA pioneer CureVac sued BioNTech (but not Pfizer) in the Regional Court of Düsseldorf Germany for infringement of one European Patent (EP1857122B1) and three German patents (DE202015009961U1, DE202021003575U1, and DE202015009974U1). CureVac has alleged that its patent portfolio “protects multiple inventions that are considered essential to the design and development of” Comirnaty® “including sequence modifications to increase stability and enhance protein expression, as well as mRNA vaccine formulations specific to SARS CoV-2 vaccines.”
Within weeks of CureVac’s suit in Germany, on July 25, BioNTech and Pfizer sued CureVac in the U.S. District Court for the District of Massachusetts for a declaratory judgment that the companies do not infringe CureVac’s U.S. Patent Nos. 11,241,493 (mRNA composition with certain lipid structures), 11,135,312 (method for producing a stabilized mRNA molecule), and 11,149,278 (method for treating/preventing infectious disease by administering a specific RNA molecule). Later, around September, Pfizer and BioNTech reportedly filed proceedings in the High Court of England and Wales, seeking judgment that their COVID-19 vaccine does not infringe certain of CureVac’s European patents. In the U.S. case, discovery has not yet commenced and CureVac has moved to dismiss or transfer the case to the U.S. District Court for the Eastern District of Virginia, which Pfizer and BioNTech oppose. That motion is pending.
Finally, on August 26, Moderna sued Pfizer and BioNTech in the District of Massachusetts for infringement of U.S. Patent Nos. 10,898,574, (lipid nanoparticle and related method of producing a polypeptide), 10,702,600 (mRNA encoding a betacoronavirus S protein formulated in a lipid nanoparticle), and 10,933,127 (method of administering mRNA formulated in a lipid nanoparticle). Moderna indicated it also filed infringement lawsuits against Pfizer and BioNTech that same day in the Regional Court of Düsseldorf Germany. Moderna’s CEO, Stéphane Bancel, stated “[w]e are filing these lawsuits to protect the innovative mRNA technology platform that we pioneered, invested billions of dollars in creating, and patented during the decade preceding the COVID-19 pandemic.” In the U.S. case, Pfizer and BioNTech answered the complaint on December 5, and discovery has not yet commenced.
Summary Exposure Analysis
Importantly, none of the parties that have alleged infringement are seeking an injunction to stop the sales of Spikevax® or Comirnaty®. Instead, all such plaintiffs seek monetary damages based on the sales of those products, which will reportedly total over a combined $100 billion globally by the end of 2022.
Under 35 U.S.C. §284, a patent-holder may obtain damages “in no event less than a reasonable royalty” for the subject infringement. A patent-holder may also obtain compensatory damages in the form of “lost profits” in situations where it can prove (1) there is a demand for the patented product, (2) the absence of acceptable non-infringing alternatives, (3) it had the manufacturing and marketing capacity to exploit demand for the product, and (4) the amount of profit it should have made but-for the accused product. Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1284-85 (Fed. Cir. 2017) (reciting the Panduit factors).
With respect to the suits against Moderna, none of Arbutus, Genevant or Alnylam have alleged lost profit damages. That makes sense, because it would be difficult for them do so (e.g., none sells products that compete with Spikevax®). Accordingly, the potential exposure Moderna faces in the present cases is primarily at least a “reasonable royalty” applied against Spikevax® sales, which may be enhanced if Arbutus and Genevant are successful in their willful infringement claims. See, e.g., SRI Int’l. v. Cisco Sys., Inc., 14 F.4th 1323, 1330 (Fed. Cir. 2021) (stating that the showing of “deliberate or intentional infringement” could establish willful infringement and form the basis of enhanced damages).
Significantly, not all Spikevax® sales may be implicated in the damages calculation since, for example, (1) the law surrounding the availability of reasonable royalty damages awards for infringement under 35 U.S.C. §271 based on extraterritorial sales is unclear and it is possible that some foreign sales may not apply to the subject damage calculation; and (2) Spikevax® sales made to the U.S. government may not be included in the damages calculation on the basis of 28 U.S.C. § 1498 (referenced above).
For similar reasons, Pfizer and BioNTech are also subject to potential exposure from the Alnylam and CureVac suits in the form of reasonable royalties on sales of Comirnaty®. With respect to lost profits, (1) Alnylam is similarly situated in the Pfizer/BioNTech case as in the Moderna case in that it does not sell competing products; and (2) while CureVac is an mRNA pioneer that has a deep pipeline, it does not have a competing COVID-19 vaccine on the market to date, and it would therefore not have a strong lost profits case in the U.S. courts. At this time Alnylam has not alleged willful infringement against Pfizer or BioNTech, or for that matter, Moderna. CureVac has not yet answered the Pfizer or BioNTech complaint in the District of Massachusetts and may have opportunity to claim willfulness in such a pleading if it has a basis to do so.
It is possible that Pfizer and BioNTech will also be sued by Arbutus and Genevant which, according to the Acuitas complaint, have already sent “demand” letters to Pfizer in 2020 and 2021. The declaratory judgment lawsuit filed by Acuitas may therefore have been a preemptive attack by the Pfizer partner and alleged developer of Comirnaty® LNPs. Perhaps if the Acuitas suit survives the pending motion to dismiss for lack of standing, Arbutus and Genevant will add infringement counterclaims against Pfizer and BioNTech, bringing them into that suit. Or, if Arbutus and Genevant are successful with their motion to dismiss, they may file a separate patent infringement lawsuit against Pfizer and BioNTech. It is also possible, of course, that no suit is filed against Pfizer or BioNTech and that the parties resolve any disputes without the need for litigation.
Returning to Moderna, its suit against Pfizer and BioNTech is interesting for a number of reasons. First, Moderna is seeking “compensatory damages, including reasonable royalties and/or lost profit damages.” See, e.g., Complaint, ¶119 (emphasis added). Moderna is also seeking damages for willful infringement, which could form the basis for enhanced damages. Id. at ¶118. Moderna has also stated that it “is not seeking damages related to Pfizer’s sales to AMC 92 [low- and middle-income countries] countries and is not seeking damages for Pfizer’s sales where the U.S. Government would be responsible for any damages. Consistent with Moderna’s patent pledge, the Company is also not seeking damages for activities occurring before March 8, 2022.” See also Complaint at Page 38 (Prayer for Relief).
Even with these potential limitations, the fact that Moderna is seeking lost profits increases its leverage since a damages case based on lost profits could possibly amount to a significantly higher damages total than a total based solely on reasonable royalties (e.g., if Moderna can show large totals of sales of Spikevax® it should have made but for Pfizer’s sales of Comirnaty®). Accordingly, filing this lawsuit and seeking significant damages accomplishes at least two major things for Moderna. First, from an exposure management perspective, it may serve to mitigate the damages exposure caused by the Alnylam and Arbutus cases. Second, it applies even more pressure on Pfizer and BioNTech, Moderna’s direct competitors in at least the COVID-19 vaccine space, adding to the potential exposure those parties face under three major patent infringement lawsuits, and potentially four, should Arbutus and Genevant assert infringement claims also. Sometimes, a competitor that is sued for patent infringement by another competitor will assert applicable patent infringement counterclaims from its own portfolio to increase exposure to the party that filed the lawsuit, but that did not happen here. Neither BioNTech nor Pfizer have asserted any patent infringement counterclaims against Moderna to date.
By asserting their patents, lipid pioneers Alnylam, Arbutus and Genevant could gain (1) substantial damages awards based on royalties applied to massive vaccine sales should infringement be found; or (2) significant settlement revenues. These parties also run the risk of having their patents invalidated through the subject lawsuits or cancelled through IPR proceedings. This may not be as much of an issue for Alnylam, which is asserting patent claims that it applied for and was granted after it was able to learn about the configuration of the Spikevax® and Comirnaty® vaccines (and therefore the subject patents may not be directly applicable to Alnylam’s commercial operation). However, with respect to Arbutus and Genevant, should one or more of the key Arbutus patents become invalidated in connection with the Moderna or Acuitas cases (or other cases Arbutus and Genevant may file), this would eliminate the ability for those entities to leverage licensing revenues under those patents going forward. Of course, in their cases, Moderna and CureVac also run the risk of having their asserted patents invalidated, and the upside of those cases is the potential to obtain a favorable damages awards or settlements as well.
Expect More Litigation Activity
In 2022, nearly every major mRNA and lipid nanoparticle pioneer clashed in significant patent litigation activity. All of those cases related, in some way, to the sales of Spikevax® or Comirnaty® and related boosters—the only mRNA-based products generating revenue at this time. Moderna has potential exposure (in the form of reasonable royalty damages) from the lawsuits filed against it by Alnylam, and Arbutus and Genevant, while Pfizer and BioNTech have potential exposure from lawsuits filed by Alnylam, CureVac, and Moderna in the form of reasonable royalty damages (in the Moderna case, lost profit damages also). These cases will likely persist through 2023 absent any settlements, and other suits may be filed in the coming year as innovators assess their patent portfolios and assert patent rights against existing and future mRNA-based products approved for commercialization.
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