Moderna settles with Arbutus & Genevant, ends LNP patent dispute
Moderna settles with Arbutus & Genevant, ends LNP patent dispute
According to the press release, the deal would represent the largest disclosed patent settlement in the pharma industry if the complete $2.25 billion is paid
Genevant Sciences and Arbutus Biopharma have issued a press release announcing entering into a global settlement with Moderna, Inc. that could result in a payment of up to $2.5 billion. As per the announcement, the settlement resolves all U.S. and international patent litigation concerning the unauthorized use of Genevant’s and Arbutus’ lipid nanoparticle (LNP) delivery technology in Moderna’s COVID-19 vaccines. The agreement comes just days prior to a highly anticipated jury trial slated to begin in the U.S. District Court for the District of Delaware.
The press release states that Moderna will make an upfront payment of $950 million to Genevant and Arbutus in July 2026. The companies also noted that an additional $1.3 billion payment is dependent on a favorable appellate ruling that 28 U.S.C § 1498 does not ban the claims against Moderna for patent infringement, except for a small fraction of doses sold to U.S. government employees. Moderna has also agreed to a judgment of infringement and no invalidity for the four patents asserted in the case.
In its own press release, Moderna expressed confidence in its appeal to the U.S. Court of Appeals for the Federal Circuit, noting that “the Company has concluded that a loss related to the pending Section 1498 proceeding is not probable”. However, Moderna added that if the Federal Circuit does affirm liability under Section 1498, “Moderna has agreed to make an additional payment of up to $1.3 billion within 90 days of that decision, depending on the scope of the decision. Thereafter, should Moderna ultimately prevail through further proceedings – whether en banc, at the Supreme Court, or on remand to the district court – Arbutus/Genevant will refund the full payment plus interest.”
Genevant has granted Moderna a global non-exclusive licence to its LNP delivery technology for infectious disease applications under the terms of the settlement; the press release explained. There is also a promise not to sue about certain Genevant/Arbutus patents and Moderna products. This ends all patent-infringement litigation between the companies over the COVID-19 vaccines. Lindsay Androski, President and Chief Executive Officer of Arbutus, said that the settlement is a “transformative outcome for Arbutus as a company, but more importantly, it is a long-overdue recognition that the COVID-19 vaccines would never have made it to the world without the seminal work of the Arbutus scientists.” If the complete $2.25 billion is paid, the deal will represent the largest disclosed patent settlement in the pharmaceutical industry and the second largest in any industry, as per the press release.
Earlier on February 18, Judge Wolson had granted in part a motion for summary judgement that restricted the invalidity defences Moderna could assert at trial. While the court disallowed Moderna from challenging several Arbutus patents on obviousness and derivation grounds, it found that Moderna had raised a genuine factual dispute about enablement that must be resolved by a jury. Before that on February 4, Judge Wolson had issued another key summary ruling that affected the case considerably. The court interpreted the phrase “for the Government” in 28 U.S.C. § 1498 to mean that the use of a patented product must be for the benefit of the Government itself, not the benefit of the patients who receive it. This decision precluded Moderna from using Section 1498 as an affirmative defence for the vast majority of its over $8.2 billion in vaccine sales to the U.S. government, keeping those sales in the case for damages calculations. Also in the February 4 ruling, the court held that Arbutus’s removal of the term “about” from its claimed lipid ranges during patent prosecution invoked prosecution history estoppel. This decision excluded Arbutus from asserting infringement under the doctrine of equivalents, requiring it to prove its case under a heightened literal infringement standard.
