How
often
can
I
spend
years
watching
a
case
go
from
filing
to
settlement
when
I
am
not
an
attorney
of
record
for
one
of
the
parties?
It
happens,
usually
when
the
case
at
issue
is
one
of
high
value
and
interest
to
the
investment
community.
Yes,
I
continue
to
consult
for
investors
on
a
variety
of
ongoing
third-party
patent
cases
of
interest
to
them,
but
usually
the
interest
on
the
investor
side
tends
to
coalesce
around
certain
key
events,
such
as
a
Markman
hearing
or
trial.
One
major
exception
to
that
concentration
of
interest
around
litigation
inflection
points
—
rather
than
a
general
interest
for
the
lifespan
of
the
case
in
its
entirety
—
was
the
long-running
dispute
between
Arbutus
and
Moderna,
concerning
Arbutus’
patents
on
the
lipid
nanoparticle
technology
that
allows
for
delivery
of
mRNA-based
vaccines,
including
the
COVID-19
vaccine
known
as
Spikevax.
Throughout,
there
was
an
expectation
that
the
dispute
could
end
up
as
of
the
most
valuable
patent
assertions
of
all
time,
hence
the
constant
interest.
In
fact,
the
dispute
predated
the
pandemic,
with
Moderna’s
unsuccessful
attempts
to
invalidate
Arbutus’
patents
via
IPR
in
the
2018/2019
timeframe,
around
the
time
of
Moderna’s
blockbuster
IPO,
which
valued
the
company
at
over
$7.5
billion.
It
is
safe
to
assume
that
Moderna’s
investors
at
the
time
never
dreamed
that
the
company
would
end
up
selling
nearly
$20
billion
in
COVID-19
vaccines
in
2022
alone.
The
hullabaloo
around
the
IPO,
however,
was
more
than
enough
to
raise
investor
interest
in
the
Arbutus
patent
issue,
which
is
when
I
started
discussing
the
case
with
investor
clients.
In
other
words,
I
have
been
discussing
at
least
some
of
these
patents
for
nearly
half
their
lifespan.
And
I
am
going
to
miss
discussing
this
case
in
the
context
of
Moderna,
now
that
a
settlement
for
the
ages
has
been
reached.
For
those
unfamiliar,
a
quick
detour
to
explain
how
we
got
here,
before
I
turn
to
some
lessons
we
can
all
take
from
this
settlement.
After
the
federal
circuit
affirmed
the
denials
of
Moderna’s
IPRs,
speculation
arose
as
to
when
Arbutus
would
pull
the
trigger
on
a
district
court
patent
infringement
case.
The
answer
came
on
the
last
day
in
February
of
2022,
when
Arbutus
filed
against
Moderna
in
the
district
of
Delaware,
only
to
see
the
case
reassigned
to
a
visiting
judge
from
Philadelphia,
the
Hon.
Mitchell
S.
Goldberg.
Indicative
of
how
long
patent
cases
can
take
to
get
to
trial,
Goldberg
retired
from
the
bench
in
2025,
taking
a
position
as
senior
counsel
in
Blank
Rome’s
litigation
group.
Prior
to
leaving
the
bench,
trial
in
the
dispute
had
been
moved
from
late
September
2025
to
March
9,
2026.
And
when
Goldberg’s
replacement,
the
EDPA’s
Hon.
Joshua
D.
Wolson
took
over
the
case
in
July
2025,
the
schedule
for
summary
judgment
and
other
pretrial
motions
had
already
been
set.
To
his
credit,
Wolson
hewed
closely
to
that
pretrial
schedule,
refusing
to
entertain
a
shift
in
the
trial
date
and
doing
everything
in
his
power
to
get
the
case
ready
for
trial.
One
key
set
of
developments
on
that
front
was
the
court’s
decisions
on
various
pending
summary
judgment
motions
over
the
course
of
this
February.
Perhaps
most
important
for
Moderna’s
purposes
was
the
court’s
handling
of
Moderna’s
attempt
to
shift
the
damages
burden
from
itself
to
the
U.S.
government,
based
on
28
U.S.C.
§1498. The
court’s
rejection
of
that
attempt
was
mitigated
somewhat
by
a
grant
of
summary
judgment
in
Moderna’s
favor
on
Arbutus’
doctrine
of
equivalents
positions
in
that
same
decision.
But
in
the
series
of
decisions
that
followed,
things
got
progressively
worse
for
Moderna
heading
into
trial.
First,
the
court
gutted
Moderna’s
prior
art-based
invalidity
defenses
on
summary
judgment,
finding
that
IPR
estoppel
applied
to
Moderna’s
obviousness
defenses
and
that
Moderna’s
derivation
defense
failed
as
a
matter
of
law.
Then,
Wolson
granted
Arbutus’
motion
to
exclude
Moderna’s
damages
expert’s
opinions
on
a
reasonable
royalty
and
noninfringing
alternatives.
At
the
same
time,
the
court
reserved
judgment
on
Moderna’s
motion
to
exclude
Arbutus’
damages
expert’s
testimony,
whereby
she
intended
to
argue
to
the
jury
that
Moderna
would
have
agreed
to
a
royalty
of
$4
billion
to
$5
billion-plus
for
the
patented
technology.
Those
setbacks,
perhaps
coupled
with
jury
research
that
may
have
suggested
that
a
huge
verdict
against
Moderna
was
possible,
clearly
contributed
to
the
mammoth
courthouse
steps
settlement
announced
last
week.
For
its
part,
the
settlement
is
a
creative
one,
with
a
large
upfront
—
and
guaranteed
—
payment
from
Moderna
to
Arbutus
for
$950
million
payable
in
July
of
this
year.
That
alone
would
make
this
one
of
the
more
successful
pharma
royalty
patent
assertions
of
all
time,
but
there
is
more,
namely
that
pending
the
results
of
Moderna’s
appeal
of
the
§1498
issue,
Moderna
may
pay
up
to
$1.3
billion
more,
for
a
total
potential
payout
of
$2.25
billion.
While
that
almost-unprecedented
amount
for
a
patent
settlement
may
be
striking,
early
indications
are
that
Moderna
made
the
right
call.
Moderna’s
stock
jumped
over
10%
on
the
day
after
the
settlement
was
announced,
adding
billions
to
the
company’s
market
cap.
Perhaps
more
importantly,
the
bankruptcy
threat
presented
to
Moderna
from
a
potential
megaverdict
was
avoided,
giving
the
company
a
lifeline
to
try
to
replicate
past
success
in
an
uncertain
post-COVID
future.
In
my
view,
the
court’s
deft
handling
of
the
pretrial
period
contributed
mightily
to
seeing
this
long-running
and
high-value
dispute
get
to
resolution
before
trial.
For
one,
keeping
the
pressure
of
the
trial
date
on
the
parties
is
a
long-known
tactic
for
driving
settlement
—
one
employed
in
courts
with
heavy
patent
dockets,
(e.g.,
EDTX),
to
great
effect.
Keeping
that
threat
of
trial
alive,
however,
also
required
the
court
to
diligently
address
the
pending
pretrial
motions,
which
it
did
to
its
credit.
And
the
coup-de-grace
of
holding
off
on
perhaps
the
most
important
pretrial
motion
outside
of
the
§1498
issue
was
also
a
Wolson
masterstroke,
by
keeping
the
question
alive
for
both
sides
as
to
what
Arbutus’
damages
expert
would
be
able
to
ask
for
at
trial.
That
mutual
risk
surely
helped
drive
the
settlement
into
a
range
where
both
sides
felt
some
pain,
while
also
being
free
to
pursue
their
other
endeavors
from
a
position
of
greater
strength.
For
Moderna,
that
translates
into
its
ongoing
efforts
to
replicate
the
commercial
success
of
its
COVID-19
vaccine.
For
Arbutus,
focus
shifts
to
its
ongoing
case
pending
in
New
Jersey
against
Pfizer,
where
it
will
now
hope
to
replicate
its
patent
assertion
victory
against
Moderna
in
the
form
of
another
megabucks
settlement
or
even
a
trial
win.
And
for
those
of
us
who
have
been
following
this
dispute
for
years,
the
lessons
learned
along
the
way
will
serve
us
in
good
stead
when
we
are
called
upon
to
comment
on
other
cases,
whether
as
counsel
for
the
parties
or
as
a
consultant
to
interested
investors.
Please
feel
free
to
send
comments
or
questions
to
me
at
[email protected]
or
via
Twitter:
@gkroub.
Any
topic
suggestions
or
thoughts
are
most
welcome.
Gaston
Kroub
lives
in
Brooklyn
and
is
a
founding
partner
of Kroub,
Silbersher
&
Kolmykov
PLLC,
an
intellectual
property
litigation
boutique,
and Markman
Advisors
LLC,
a
leading
consultancy
on
patent
issues
for
the
investment
community.
Gaston’s
practice
focuses
on
intellectual
property
litigation
and
related
counseling,
with
a
strong
focus
on
patent
matters.
You
can
reach
him
at [email protected] or
follow
him
on
Twitter: @gkroub.