On Monday, Federal District Judge Beth Labson Freeman issued a decisive victory to Gilead (NASDAQ:GILD) and stunning defeat for Merck (NYSE:MRK) in the huge fight over Hepatitis C drug patent rights. This is not some sort of interim or preliminary ruling; it is a TKO - the fight is over. The court concluded:
"Candor and honesty define the contours of the legal system. When a company allows and supports its own attorney to violate these principles, it shares the consequences of those actions. Here, Merck's patent attorney, responsible for prosecuting the patents-in-suit, was dishonest and duplicitous in his actions with Pharmasset, with Gilead and with this Court, thus crossing the line to egregious misconduct. Merck is guilty of unclean hands and forfeits its right to prosecute this action against Gilead."
The court's order is definitive:
"For the foregoing reasons, IT IS HEREBY ORDERED that Merck is barred from asserting the '499 and '712 Patents against Gilead and Merck shall take nothing by this suit."
Let's face it, federal judges have lifetime tenure and, once appointed, need not placate anyone. For this reason, their opinions can and do tend to be pointed and sometimes even dramatic. Although I've practiced before the federal courts for 35 years, I have rarely encountered a more passionate and persuasive opinion than that issued yesterday by Judge Freeman.
