In a significant step, Moderna will sue Pfizer-BioNTech for patent infringement of mRNA technology used in both companies’ incredibly successful COVID-19vaccines.
Courts in Massachusetts and Düsseldorf will determine if Pfizer’s product infringes on Moderna’s patented technology underpinning the mRNA platform used in both vaccines. Moderna alleges infringement in relation to both the chemical modifications made to mRNA, which act to stabilise it and prevent an immune response, and the lipid shells which deliver the mRNA to the cells. This second element has already seen substantial litigation as others seek a slice of the COVID pie; Arbutus Biopharma Corp. and Genevant Sciences Inc. sued Moderna over this technology, followed by Alnylam Pharmaceuticals Inc. who sued both Modern and Pfizer over a component of these lipid shells.
Of particular importance in this case will be how the courts treat Moderna’s two patent pledges made in October 2020 and March of this year. Initially, Moderna made a public commitment not to enforce patents relating to its COVID-19 vaccine whilst the pandemic was ongoing. In March, that commitment was revised, and Moderna stated it was open to enforcing its patents outside of 92 named low- and middle-income countries (LMICs), or against any manufacturer making vaccines exclusively for that market. Elsewhere, companies would be expected to respect its IP. Analysts suggest Pfizer will, in part, rely on Moderna’s promises not to sue. A key decision for the courts will be whether or not the second, less generous pledge, replaces the first. This determination could have significant impact on patent pledges as a tool of public-interest IP management.
The courts may also be required to decide if the pandemic is ongoing. Moderna’s complaint suggests the pandemic became endemic at some point in early 2022, and it had been made clear once the pandemic was over companies that continued to infringe would be sued. However, major health organisations including the World Health Organisation and the US Center for Disease Control and Prevention (CDC) maintain the pandemic is ongoing.
Patent valuation and damages valuation will be crucial in this case. Analysis by Bloomberg Intelligence suggests that, if successful, Moderna could gain “at least mid-single-digit royalties on past and future Covid vaccine sales”. Given 360 million doses of Pfizer’s vaccine have been administered in the US alone (over 100 million more than Moderna’s product), the company reported adjusted earnings of $7.7 billion and the vaccine was responsible for 60% of sales last year, even such an ostensibly small gain could have substantial financial implications. Further, at the beginning of August the US Government finalised supply agreements with both companies in relation to their omicron boosters. Whilst both deals are for 300 million doses, Pfizer-BioNTech’s initial order is greater – 105 million doses to Moderna’s initial order of 66 million – and the price per dose is greater, $30.48 per dose to Moderna’s $26.36. Moderna’s motivations for engaging in this litigation are therefore quite clear.
Moderna’s move is an aggressive one, and some analysis speculates that Moderna has placed itself at risk of challenge to its patents or a countersuit from Pfizer. Professor Jeremy Sheff of St. Johns University School of Law has suggested Moderna’s patents are broad, something that Pfizer’s lawyers will seek to review. He notes Pfizer is a “large and well-resourced defendant” who will be well motivated to assess the validity of those patents.
This is a case, therefore, with potentially significant implications for not only the finances of the participants, but also for the way pharmaceutical patents are deployed (or not) at times of public health necessity through patent pledges, and for the validity of the very patents Moderna seeks to enforce. Moderna -v- Pfizer will be worth following closely.
The Massachusetts complaint can be viewed at: https://storage.courtlistener.com/recap/gov.uscourts.mad.247673/gov.uscourts.mad.247673.1.0_1.pdf