Appeals from the United States District Court for the
Northern District of California in No. 5:13-cv-04057-BLF,
Judge Beth Labson Freeman.
Juanita Rose Brooks, Fish & Richardson, PC, San Diego,
CA, argued for plaintiff-cross-appellant. Also represented by
Craig E. Countryman, Jonathan Elliot Singer; Elizabeth M.
Flanagan, Deanna Jean Reichel, Minneapolis, MN; Robert M.
Oakes, Wilmington, DE; Edmund Hirschfeld, E. Joshua
Rosenkranz, Orrick, Herrington & Sutcliffe LLP, New York,
Jeffrey A. Lamken, MoloLamken LLP, Washington, DC, argued for
defendants-appellants. Also represented by James A. Barta,
Sarah Justine Newman, Michael Gregory Pattillo, Jr.; Sara
Margolis, New York, NY; Jessamyn Sheli Berniker, Stanley E.
Fisher, Bruce Genderson, Jessica Palmer Ryen, Williams &
Connolly LLP, Washington, DC; Mitchell Epner, Stephen S.
Rabinowitz, Hughes Hubbard & Reed LLP, New York, NY.
Taranto, Clevenger, and Chen, Circuit Judges.
TARANTO, Circuit Judge.
case involves two patents relating to treatments for
Hepatitis C. Merck & Co., Inc. and Ionis Pharmaceuticals,
Inc. (formerly Isis Pharmaceuticals, Inc.) collaborated on
research in the area and eventually obtained U.S. Patent Nos.
7, 105, 499 and 8, 481, 712. The patents, whose
specifications are materially the same for present purposes,
describe and claim classes of compounds, identified by
structural formulas, and the administration of
therapeutically effective amounts of such compounds. Gilead
Sciences, Inc., developed its own Hepatitis C
treatments-marketed now as Solvadi® and Harvoni®,
both based on the compound sofosbuvir.
filed this action against Merck & Co., its subsidiary
Merck Sharp & Dohme Corp., and Ionis (collectively,
"Merck" unless the context indicates reference just
to Merck & Co. and/or Merck Sharp). Gilead sought a
declaratory judgment that Merck's '499 and '712
patents are invalid and that Gilead is not infringing by its
activities involving its sofosbuvir products. Merck
counter-claimed for infringement.
eventually stipulated to infringement based on the district
court's claim construction, which is not challenged on
appeal. A jury trial was held on Gilead's challenges to
the patents as invalid for lack of both an adequate written
description and enablement of the asserted claims (claims 1-2
of the '499 patent and claims 1-3, 5, 7, and 9-11 of the
'712 patent) as well as Gilead's closely related
defense that Merck did not actually invent the subject matter
but derived it from another inventor, employed by
Gilead's predecessor. The jury ruled for Merck and
district court then held a bench trial on Gilead's
equitable defenses, including unenforceability against Gilead
based on the allegation that Merck had unclean hands
regarding the patents. The district court ruled for Gilead,
finding both pre-litigation business misconduct and
litigation misconduct attributable to Merck, and it barred
Merck from asserting the patents against Gilead. Gilead
Scis., Inc. v. Merck & Co., No. 13-cv-04057-BLF,
2016 WL 3143943, at *39 (N.D. Cal. June 6, 2016). Having so
concluded, the district court subsequently deemed moot
Gilead's motion for judgment as a matter of law of
invalidity for lack of adequate written description and
enablement. The court also awarded attorney's fees,
relying on the finding of unclean hands.
appeals the unenforceability judgment based on unclean hands.
Gilead cross-appeals the denial of judgment as a matter of
law of invalidity, but it asks us to reach that issue only if
we set aside the unenforceability judgment. We have
jurisdiction under 28 U.S.C. § 1295(a)(1). We affirm the
judgment based on unclean hands, concluding that it is
sufficiently supported by findings that withstand review for
clear error. We therefore do not reach the issues raised by
Gilead's conditional cross-appeal.
1998, Merck and Isis began collaborating on finding a way to
block propagation of the Hepatitis C virus (HCV) by impeding
the synthesis of its RNA. J.A. 20291. The collaborators
sought a molecule that would have two properties. First, an
enzyme involved in RNA assembly (NS5B polymerase) would
recognize the molecule as a building block and add it to the
growing RNA chain during replication of the virus's RNA.
Second, the addition of this molecule would effectively stop
further RNA assembly before completion and, hence, end RNA
replication and prevent viral propagation.
in 2001, the two collaborators filed a series of patent
applications related to antiviral agents for Hepatitis C. Dr.
Phillipe Durette, a Merck chemist who had become a patent
attorney, was central to their initial patenting efforts.
J.A. 20301. A provisional patent application dated January
22, 2001, summarizes the invention as "a method for
inhibiting hepatitis C virus (HCV) NS5B polymerase, a method
for inhibiting HCV replication, and/or a method for treating
HIV infection" by administering a "therapeutically
effective amount of a compound of structural formula I."
J.A. 25808. It sets forth and claims large families of
possible structures in Markush format: it displays a number
of configurations of nucleic acid derivatives and shows
variables at a number of locations in the structures
(e.g., different bases, different molecules attached
to the sugar ring), the variables each stated to represent
any of a substantial number of possible constituents. J.A.
same is true of Merck's two January 2002 applications
under the Patent Cooperation Treaty (PCT applications). J.A.
24832, 26913. One of those became Merck's July 2003 U.S.
application 10/250, 873, which issued as the '499 patent.
J.A. 150, 27227. A non-provisional U.S. application filed in
January 2002 led to the 2007 application that issued as the
'712 patent. J.A. 223. The number of possible
combinations within the Markush groups is very large.
instance of the formulas in the written description, from the
2003 application that issued as the '499 patent, is:
formula III which is of the stereochemi-cal configuration:
D is N, CH, C-CN, C-NO2, C-C1-3 alkyl, C-
C-CSNR11R11, C-COOR11, C-hydroxy,
C-C1-3 alkoxy, C-amino, C-C1-4 alkylamino,
C-di(C1-4 al-kyl)amino, C-halogen, C-(1,
3-6oxazol-2-yl), C-(1, 3-thiazol-2-yl), or C-(imidazol-2-yl);
wherein alkyl is unsubstituted or substituted with one to
three groups independently selected from halogen, amino,
hydroxy, carboxy, and
W is O or S;
Y is H, C1-10 alkylcarbonyl,
P2O6H3, or P(O)R9
R1 is hydrogen, CF3, or C1-4
alkyl and one of R2 and R3 is OH or
C1-4 alkoxy and the other of R2 and
R3 is selected from the group consisting of
C1-3 alkyl, trifluoromethyl,
C1-3 alkoxy, and
R2 is hydrogen, CF3, or C1-4
alkyl and one of R1 and
R3 is OH or C1-4 alkoxy and the other
of R1 and R3 is selected from the group
C1-3 alkyl, trifluoromethyl,
C1-3 alkoxy, and
R1 and R2 together with the carbon atom
to which they are attached form a 3- to 6-membered saturated
monocyclic ring system optionally containing a heteroatom
selected from O, S, and NC0-4 alkyl;
R 6 is H, OH, SH, NH 2, C1-4
alkylamino, di(C1-4 al-kyl)amino, C3-6
cycloalkylamino, halogen, C1-4 ...