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Merck Wins Record $2.5 Billion Patent Verdict Against Gilead

Gilead Sciences Inc. was told by a federal jury to pay $2.54 billion to Merck & Co. for using a patented invention as the basis for its blockbuster drugs for the potentially deadly liver disease hepatitis C -- the biggest patent-infringement verdict in U.S. history.

The jury in Wilmington, Delaware, deliberated for less than two hours and rejected Gilead’s arguments that Merck’s patent is invalid. The judge in the case had already decided that Merck’s patent was infringed by Gilead’s Sovaldi and Harvoni, which account for more than half the drugmaker’s revenue.

The infringement also was found to be willful, meaning the judge could increase the damage award by as much as three times the amount set by the jury. The jury said on Thursday that Gilead owed 10 percent royalties on $25.4 billion in total sales for the two drugs.

Gilead pledged to appeal.

The patent, issued in 2009, is for a compound that Merck’s Idenix unit contends is the basis for all major treatments for hepatitis C, including ones made by Gilead. Sovaldi was approved by the U.S. Food and Drug Administration in 2013 and Harvoni got regulatory go-ahead a year later. Merck’s drug, Zepatier, was approved this year.

“We were first,” Merck lawyer Stephanie Parker said in closing arguments. “That’s the most important thing. All of the Gilead work comes after ours. Our patent was first. The Gilead story starts years later.”