Case 1:20-cv-00499-CFL Document 22 Filed 12/30/20 Page 1 of 8
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`In the United States Court of Federal Claims
`No. 20-499C
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`(Filed: December 30, 2020)
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`Plaintiff,
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`v.
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`Suit based on alleged breach of
`contracts; motion to dismiss in
`which government points to
`defenses asserted by plaintiff in
`earlier action filed by government
`against plaintiff; 28 U.S.C. § 1500;
`pleading a claim
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`___________________________________
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`GILEAD SCIENCES, INC.
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`UNITED STATES,
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`Defendant.
`___________________________________
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`Ronald C. Machen, Jr., Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.
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`for plaintiff Gilead Sciences, Inc. With him on briefs were David B. Bassett, Wilmer Cutler
`Pickering Hale and Dorr LLP, New York, NY, Vinita Ferrera, Emily R. Whelan, George P.
`Varghese, Timothy A. Cook, Stephanie Lin, Wilmer Cutler Pickering Hale and Dorr LLP,
`Boston, MA.
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`Walter W. Brown, Senior Litigation Counsel, Commercial Litigation Branch, Civil
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`Division, United States Department of Justice, Washington, D.C. for the United States. With
`him on briefs were Jeffrey Bossert Clark, Acting Assistant Attorney General, Civil Division,
`Gary L. Hausken, Director, Philip Charles Sternhell, Assistant Director, Amanda K. Kelly, Trial
`Attorney, Patrick C. Holvey, Trial Attorney, Commercial Litigation Branch, Civil Division,
`United States Department of Justice, Washington, D.C.
`
`
`LETTOW, Senior Judge.
`
`OPINION AND ORDER
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`This case arises out of five contracts between plaintiff, Gilead Sciences, Inc. (“Gilead”),
`and the Centers for Disease Control and Prevention (“CDC”), acting on behalf of the federal
`government.1 These contracts consist of four Material Transfer Agreements (“MTAs”) and one
`Clinical Trial Agreement (“CTA”). Gilead and the CDC entered into these agreements as part of
`an ongoing collaboration on research “relating to the use of antiretroviral agents for prevention
`of HIV-1.” Compl. ¶ 4. Gilead alleges that “the [g]overnment is asserting patents that it secretly
`obtained in violation of the collaboration agreements,” Compl. ¶ 2, and that “[t]he [g]overnment
`
`1 References to the “United States,” the “government,” and the “CDC” all refer to
`defendant and its collective entities.
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`Case 1:20-cv-00499-CFL Document 22 Filed 12/30/20 Page 2 of 8
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`breached its obligations under both the MTAs and the CTA,” Compl. ¶ 10. The context in which
`this case arises includes a suit filed by the government against Gilead for infringement of the
`relevant patents. See United States v. Gilead Sciences, Inc., No 19-2103MN (D. Del., filed Nov.
`6, 2019). That action was instituted approximately five months before Gilead filed this suit. 2
`
`Pending before the court is the government’s motion to dismiss the complaint pursuant to
`Rules 12(b)(1) and 12(b)(6) of the Rules of the Court of Federal Claims (“RCFC”). See Def.’s
`Mot. to Dismiss (“Def.’s Mot.”), ECF No. 11. After briefing, see Pl.’s Resp. to Def.’s Mot.
`(“Pl.’s Resp.”), ECF No. 12; Def.’s Reply to Pl.’s Resp. (“Def.’s Reply”), ECF No. 15; Pl.’s Sur-
`Reply to Def.’s Reply (“Pl.’s Sur-Reply”), ECF No. 18, the court held a hearing on Monday,
`December 14, 2020. The government’s motion to dismiss this action is based on lack of subject-
`matter jurisdiction and failure to state a claim. See Def.’s Mot. at 2.
`
`The court concludes that Gilead’s claims for breach of contract are timely under 28
`U.S.C. § 2501, as they accrued within six years of Gilead’s filing suit in this court. Furthermore,
`Gilead’s claims are not barred by 28 U.S.C. § 1500 because Gilead has only asserted defenses in
`the Delaware action, and relatedly the statute speaks in terms of a “claim,” not a defense. Lastly,
`Gilead has pled viable breach of contract claims to avoid dismissal under RCFC 12(b)(6).
`Accordingly, the government’s motion is DENIED.
`
`BACKGROUND3
`
`Gilead “has brought to market more than a dozen products that have been approved by
`the FDA for the treatment and prevention of HIV.” Compl. ¶ 28. The company “has a long
`history of working with the scientific community,” including the CDC, “to promote basic
`scientific and clinical research on HIV, HIV treatment, and HIV prevention.” Compl. ¶ 39. The
`collaborations between Gilead and the CDC have taken the form of “many material transfer and
`related agreements over the past three decades.” Compl. ¶ 42.
`
`The MTAs at issue in this case span from 2004 to 2014. Compl. ¶ 44. In each of these
`MTAs, “Gilead agreed to provide” certain compounds to the CDC “at no cost, to be used in
`HIV-1 research.” Compl. ¶ 45. “[U]nder each of the four MTAs,” Compl. ¶ 45, the government
`agreed to, inter alia, “promptly notify” Gilead of “any Inventions” derived from work performed
`under the agreements. E.g., Compl. Ex. 4 at 3. Each MTA defined “Inventions” as “any
`inventions, discoveries, and ideas that are made, conceived or reduced to practice.” E.g., Compl.
`Ex. 4 at 3. The government also agreed “to give serious and reasonable consideration to
`[Gilead’s] request for a non-exclusive or exclusive license on commercially reasonable terms
`under [the government’s] intellectual property rights in or to any Inventions.” E.g., Compl. Ex. 4
`at 3. The MTAs at issue were amended as the collaborations progressed. See, e.g., Compl. Ex.
`8.
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`2 This case was filed on April 24, 2020.
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`3 The recitations that follow do not constitute findings of fact, but rather are recitals
`attendant to the pending motions and reflect matters drawn from the complaint, the parties’
`briefs, and records and documents appended to the complaint and briefs.
`2
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`Case 1:20-cv-00499-CFL Document 22 Filed 12/30/20 Page 3 of 8
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`Also at issue in this case is a CTA, which the CDC and Gilead entered into on November
`1, 2004. See Compl. Ex. 13 at 1. That agreement was amended three times beginning in
`October 2006. Compl. ¶¶ 54-56. Pursuant to this agreement, Gilead was to provide
`antiretroviral products to the CDC for a clinical trial in Botswana. See Compl. Ex. 13 at 2-3.
`The CDC agreed in turn “not to seek patent protection in connection with any inventions that
`derive from the use of the Study Drug in the Trial.” Compl. Ex. 13 at 2. As outlined in the
`amended CTA, Gilead provided the CDC with the pre-exposure prophylaxis drug Truvada and
`matching placebos. See Compl. ¶ 57.
`
`On February 3, 2006, the CDC filed Provisional Patent Application No. 60/764,811 (“the
`’811 Provisional”) with the U.S. Patent and Trademark Office (“PTO”). See Compl. Ex. 18.
`The ’811 Provisional “related to purported inventions that [the] CDC made in the course of the
`research conducted under the MTAs[] and using the compounds that Gilead provided under the
`MTAs.” Compl. ¶ 11. On January 31, 2007, the government filed non-provisional Patent
`Application No. 11/669,547 (“the ’547 Application”). See Compl. Ex. 19. Gilead alleges that
`the “CDC relied on information derived from the Botswana clinical trial to make decisions
`concerning the prosecution of the ’547 Application.” Compl. ¶ 11. On February 1, 2008, the
`CDC sent Gilead a draft of an article which outlined the study described by the ’649 MTA.
`Compl. ¶ 76. This article disclosed that five of the authors were “named in a US [g]overnment
`patent application related to methods for HIV prophylaxis.” Compl. Ex. 20 at 1.
`
`In January 2011, “the CDC provided interim guidelines that explicitly directed physicians
`to prescribe the use of” Gilead’s Truvada, the drug used in the Botswana clinical trial, for pre-
`exposure prophylaxis. Compl. ¶ 81. A year later, in 2012, “with the encouragement and support
`of the [g]overnment,” Gilead sought and obtained approval from the FDA to market Truvada for
`HIV-1 pre-exposure prophylaxis. Compl. ¶ 82. Thereafter Gilead alleges that it was not until
`October 2014 that CDC provided “notice to Gilead of the purported invention(s) described in the
`’811 Provisional and/or the ’547 Application.” Compl. ¶ 75; see Compl. Ex. 23. Subsequently,
`on June 2, 2015, the Patent and Trademark Office issued the first of the relevant patents, U.S.
`Patent No. 9,044,509 (“the ’509 Patent”), from the non-provisional ’547 Application. See
`Compl. ¶ 12. The government also filed U.S. Patent Application No. 15/913,750 on March 6,
`2018 (“the ’750 Application”). Compl. ¶ 106. Three other patents “that claim priority to the
`same provisional and non-provisional applications have . . . issued” since the issuance of the
`’509 Patent. Compl. ¶ 12.4
`
`Gilead alleges that “[a]t no time during any of the communications in the course of
`executing the parties’ obligations under the MTAs or . . . amendments was there any mention by
`[the] CDC of any purported invention . . . or any plan to seek patent protection as a result of the
`research performed . . . .” Compl. ¶ 48. Gilead further alleges that the CDC’s failure to mention
`any “purported invention” or “any plan to seek patent protection” contravened the express terms
`of the CTA. Compl. ¶ 60. In 2016, after the first patent had issued, the CDC notified Gilead that
`it believed Truvada “may be covered by” patents “recently obtained” by the CDC. Compl. Ex.
`26. The CDC suggested that Gilead apply for a non-exclusive license of the invention covered
`
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`4 Those patents are Nos. 9,579,333 (issued Feb. 28, 2017); 9,937,191 (issued Apr. 10,
`2018); and 10,335,423 (issued July 2, 2019).
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`Case 1:20-cv-00499-CFL Document 22 Filed 12/30/20 Page 4 of 8
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`by its patents. Compl. Ex. 26. Gilead responded that the government had breached the MTAs
`and that it did not believe the patents to be valid. Compl. ¶ 102.
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`On November 6, 2019, the government filed suit against Gilead in the United States
`District Court for the District of Delaware. Compl. ¶ 107. The government alleges in the
`Delaware lawsuit that Gilead infringed its patents by selling and promoting the products Truvada
`and a related drug, Descovy. Compl. ¶ 107. Gilead has asserted several defenses in the
`Delaware lawsuit, including “the equitable doctrine of unclean hands due to, among other things,
`the [g]overnment’s breaches of the MTAs and the CTA.” Compl. ¶ 27.
`
`STANDARDS FOR DECISION
`
`A. Rule 12(b)(1) – Lack of Subject-Matter Jurisdiction
`
`The Tucker Act provides this court with jurisdiction over “any claim against the United
`States founded either upon the Constitution, or any Act of Congress or any regulation of an
`executive department, or upon any express or implied contract with the United States, or for
`liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). To
`establish this court’s jurisdiction under the Tucker Act, Gilead must “identify a substantive right
`for money damages against the United States separate from the Tucker Act.” Todd v. United
`States, 386 F.3d 1091, 1094 (Fed. Cir. 2004) (citations omitted).
`
`Gilead, as plaintiff, must establish jurisdiction by a preponderance of the evidence. See
`Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011) (citing Reynolds
`v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988)). When ruling on the
`government's motion to dismiss for lack of jurisdiction, the court must “accept as true all
`undisputed facts asserted in the plaintiff's complaint and draw all reasonable inferences in favor
`of the plaintiff.” Id. (citing Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995)).
`Moreover, “[e]very claim of which the United States Court of Federal Claims has jurisdiction
`shall be barred unless the petition thereon is filed within six years after such claim first accrues.”
`28 U.S.C. § 2501. This six-year statute of limitations “is a jurisdictional requirement attached by
`Congress as a condition of the government’s waiver of sovereign immunity and, as such, must be
`strictly construed.” Dalles Irrigation Dist. v. United States, 71 Fed. Cl. 344, 350 (2006) (quoting
`Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1576-77 (Fed. Cir. 1988)).
`
`Additionally, this court lacks jurisdiction over “any claim for or in respect to which the
`plaintiff . . . has pending in any other court . . . .” 28 U.S.C. § 1500. This statute imposes a
`“significant jurisdictional limitation” on this court. United States v. Tohono O’Odham Nation,
`563 U.S. 307, 314 (2011). Section 1500 applies when two suits “are based on substantially the
`same operative facts, regardless of the relief sought in each suit.” Id. at 317. “Thus, similarities
`or the same general subject matter do not suffice to trigger Section 1500. Rather, the specific
`facts at issue in the cases are determinative.” Oklahoma v. United States, 144 Fed. Cl. 263, 272
`(2019) (citing Tohono, 563 U.S. at 317) (additional citations omitted).
`
`B. Rule 12(b)(6) – Failure to State a Claim Upon Which Relief Can Be Granted
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`Case 1:20-cv-00499-CFL Document 22 Filed 12/30/20 Page 5 of 8
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`Under RCFC 12(b)(6), a complaint will survive a motion to dismiss if it “contain[s]
`sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
`570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows
`the court to draw the reasonable inference that the defendant is liable for the misconduct
`alleged.” Id. The factual matters alleged “must be enough to raise a right to relief above the
`speculative level on the assumption that all the allegations in the complaint are true (even if
`doubtful in fact).” Twombly, 550 U.S. at 555-56 (citations omitted).
`
`When reviewing the complaint, “the court must accept as true the complaint’s undisputed
`factual allegations and should construe them in a light most favorable to the plaintiff.”
`Cambridge v. United States, 558 F.3d 1331, 1335 (Fed. Cir. 2009) (citing Papasan v. Allain, 478
`U.S. 265, 283 (1986)) (additional citation omitted). Conclusory statements of law and fact,
`however, “are not entitled to the assumption of truth” and “must be supported by factual
`allegations.” Iqbal, 556 U.S. at 679. “‘[N]aked assertion[s]’ devoid of ‘further factual
`enhancement’” are insufficient to state a claim. Id. at 678 (quoting Twombly, 550 U.S. at 557);
`accord Bradley v. Chiron Corp., 136 F.3d 1317, 1322 (Fed. Cir. 1998) (“Conclusory allegations
`of law and unwarranted inferences of fact do not suffice to support a claim.”).
`
`ANALYSIS
`
`A. Gilead’s Claims Fall Within the Six-Year Statute of Limitations Set by 28 U.S.C. § 2501
`
`In its motion to dismiss, the government contends that Gilead’s claims fall outside the
`six-year statute of limitations set by 28 U.S.C. § 2501. Def.’s Mot. at 8-13. It argues that
`Gilead’s claims accrued on February 3, 2006, when the CDC filed the provisional patent
`application. See id. at 10-11. Gilead counters that its claims could not have accrued until the
`PTO issued the patents to the CDC. See Pl.’s Resp. at 9.
`
`A claim accrues under 28 U.S.C. § 2501 “when all events have occurred to fix the
`[g]overnment’s alleged liability, entitling the claimant to demand payment and sue here for his
`money.” Nager Elec. Co. v. United States, 177 Ct. Cl. 234, 240 (1966) (footnote omitted). A
`viable breach of contract claim requires “four elements: 1) a valid contract between the parties;
`2) an obligation or duty arising from that contract; 3) a breach of that duty; and 4) damages
`caused by that breach.” Claude Mayo Constr. Co., v. United States, 132 Fed. Cl. 634, 637
`(2017) (citing San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 957, 959 (Fed.
`Cir. 1989)).
`
`While the government filed its provisional patent application in 2006, see Compl. Ex. 18,
`and mentioned its pursuit of a patent in a draft article sent to Gilead in 2008, see Compl. Ex. 20,
`the timeliness of Gilead’s claims turns on the incurrence of damages. “Because damages are a
`necessary element of a claim for breach of contract,” Gilead’s claims did not accrue until it
`“suffered such damages.” Lake Borgne Basin Levee Dist. v. United States, 127 Fed. Cl. 321, 335
`(2016) (citing Terteling v. United States, 167 Ct. Cl. 331, 338 (1964)).
`
`Gilead alleges that “the [g]overnment’s actions increased the cost of a potential license
`and exposed Gilead to the risk of patent-infringement damages.” Compl. ¶ 110. These damages
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`could not have been incurred until June 2, 2015, when the PTO issued the ’509 Patent to the
`CDC’s employees. Only then did the government gain the right to enforce its patent against
`Gilead. See Marsh v. Nichols, Shepherd & Co., 128 U.S. 605, 612 (1888) (“Until the patent is
`issued, there is no property right in it; that is, no such right as the inventor can enforce.”).
`Gilead’s cause of action accrued either on June 2, 2015, the date of first patent issuance, or on
`March 11, 2016, the date when the CDC first asserted its patent rights by notifying Gilead that
`Truvada “may be covered by” the CDC’s patents. See Compl. Ex. 26. Therefore, Gilead’s
`claims fall within the six-year statute of limitations.
`
`B. 28 U.S.C. § 1500 Does Not Bar Gilead’s Claims
`
`The government also moves to dismiss Gilead’s complaint on the grounds that the patent
`infringement litigation in Delaware imposes a jurisdictional bar to Gilead seeking relief in this
`court. See Def.’s Mot. at 19-22. According to the government, 28 U.S.C. § 1500 precludes this
`court from exercising jurisdiction over Gilead’s claims, as they are “for or in respect to” Gilead’s
`defenses in the Delaware suit. See id. at 19-20. Gilead argues in turn that its affirmative defense
`of unclean hands in the Delaware suit does not trigger Section 1500. Pl.’s Resp. at 14-15.
`
`The Federal Circuit has interpreted Section 1500 as requiring a two-step inquiry: “(1)
`whether there is an earlier-filed ‘suit or process’ pending in another court, and, if so, (2) whether
`the claims asserted in the earlier-filed case are ‘for or in respect to’ the same claim(s) asserted in
`the later-filed Court of Federal Claims action.” Brandt v. United States, 710 F.3d 1369, 1374
`(Fed. Cir. 2013) (citing Trusted Integration, 659 F.3d at 1163-64). While it is apparent that there
`is a suit pending in another court, Gilead’s breach-of-contract claims in this court are readily
`distinguishable from its defenses in the Delaware suit. Section 1500 speaks in terms of a
`“claim,” not a defense. See 28 U.S.C. § 1500. Gilead has raised the affirmative defense of
`“unclean hands due to, among other things, the [g]overnment’s breaches of the MTAs and the
`CTA,” in the Delaware suit, Compl. ¶ 27, but it has brought its claims for breach of contract in
`this court only, see Pl.’s Resp. at 15 (“Gilead is bringing contract claims against the government
`in only one forum—this Court.”).
`
`The government points out that Gilead had previously “asserted four counterclaims based
`on the same ‘unclean hands’ allegations” in the Delaware suit, but Gilead dropped those
`counterclaims before filing suit in this court. See Def.’s Mot. at 19-20. The procedural posture
`of the Delaware suit at the time Gilead filed its action in this court is the relevant point for
`determining whether Section 1500 precludes this court from exercising jurisdiction. See Central
`Pines Land Co. v. United States, 697 F.3d 1360, 1365 (Fed. Cir. 2012) (“[J]urisdiction of the
`court depends upon the state of things at the time of the action brought.”) (quoting Grupo
`Dataflux v. Atlas Global Grp., 541 U.S. 567, 570 (2004)).
`
`Furthermore, even if Gilead’s unclean hands defense in the Delaware litigation could be
`characterized as a “claim” under Section 1500, Gilead’s claims in this court are not “based on
`substantially the same operative facts” as those underlying its defense in the Delaware suit.
`Tohono, 563 U.S. at 317. The Supreme Court has clarified that analysis under Section 1500 is
`analogous to claim preclusion. Id. at 315-16. “The focus of the inquiry is the facts that give rise
`to the claims, not the legal theories behind the claims.” Beberman v. United States, 755 Fed.
`Appx. 973, 977 (Fed. Cir. 2018) (citing Keene Corp. v. United States, 502 U.S. 200, 201 (1998).
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`While the Delaware suit and the pending case have similar factual backgrounds, the mere
`presence of overlapping facts is insufficient to invoke Section 1500. See, e.g., id. at 978 (holding
`that there was not “enough overlap to conclude that the claims [arose] from substantially the
`same operative facts” because those “facts are relevant to each case for substantially different
`reasons”). As the Federal Circuit has noted, contemporaneous suits in a district court and the
`Court of Federal Claims may nevertheless be permissible when “the district court claim and the
`Claims Court claim [arise] out of a related sequence of facts.” Id. at 977.
`
`To be sure, Gilead’s allegations of breach of contract serve as one of the bases for its
`unclean hands defense in the Delaware suit. Pl.’s Resp. at 18. In asserting this equitable
`defense, however, Gilead also cites the government’s alleged encouragement to obtain approval
`from the FDA to market Truvada for HIV-1 pre-exposure prophylaxis. See id. at 18-19.
`Therefore, the district court could find the government’s patents unenforceable under the
`equitable doctrine of unclean hands “without making any findings on whether the government
`breached its contractual obligations to Gilead.” Pl.’s Resp. at 19. The “facts that give rise to”
`Gilead’s breach of contract claims, therefore, are not determinative of its unclean hands defense
`in the Delaware suit. Beberman, 775 Fed. Appx. at 977. Given that Gilead did not have a
`“claim” pending against the government in the Delaware litigation at the time it filed suit in this
`court, and that the operative facts underlying its claims are distinct from those underlying its
`defenses, Section 1500 does not pose a jurisdictional bar to Gilead’s breach of contract claims.
`
`C. Gilead’s Pleadings Are Sufficient to Survive a Motion to Dismiss Under RCFC 12(b)(6)
`
`In addition to its argument to dismiss the complaint pursuant to RCFC 12(b)(1), the
`government alleges that Gilead has failed to state a claim upon which relief may be granted.
`Def.’s Mot. at 22-26. More specifically, the government asserts that Gilead has failed to
`adequately plead damages and causation. Id. at 23-24. Gilead argues that it has adequately pled
`causation and that the damages it seeks are recoverable in this court. Pl.’s Resp. at 20-31.
`
`First, regarding Gilead’s pleading of damages, according to the government, Gilead’s
`allegations of “reputational harm” lack the required specificity, Def.’s Mot. at 23-24, and sound
`in tort, Def.’s Reply at 12-13. The government also points to Gilead’s request for attorneys’ fees
`as an “impermissible double recovery” for the attorneys’ fees sought in the Delaware suit. Def.’s
`Mot. at 13-15. The factual content in Gilead’s complaint, however, “allows the court to draw the
`reasonable inference that” Gilead has suffered damages. Iqbal, 556 U.S. at 570 (citation
`omitted). Aside from the reputational harm alleged in the complaint and the attorneys’ fees
`sought, Gilead argues that the government’s failure to disclose its patent applications and support
`of Gilead seeking FDA approval for Truvada “increased the cost of a potential license and
`exposed Gilead to the risk of patent-infringement damages.” Compl. ¶ 110. The mere mention
`of types of damages that may not be recoverable in this suit does not invalidate Gilead’s claims
`for breach of contract.
`
`Moreover, Gilead is not seeking attorneys’ fees pursuant to a fee-shifting statute, but
`“only the compensatory damages that would restore it to the position it would have been in had
`the government not breached the contracts . . . .” Pl.’s Resp. at 25. Attorneys’ fees, “when
`properly categorized as compensatory damages for a contract breached by the United States and
`not incurred in litigation, may be recovered.” Connecticut Yankee Atomic Power Co. v. United
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`States, 143 Fed. Cl. 172, 178 (2019) (internal quotation marks omitted). Gilead’s request for
`attorneys’ fees thus does not warrant dismissal.
`
`Second, the government avers that Gilead has failed to establish but-for causation as to its
`theories of damages. Def.’s Mot. at 24; Def.’s Reply at 17-19. In the government’s view, the
`links between the alleged breaches and the harm Gilead suffered are either “heavily conditional,”
`Def.’s Mot. at 24, or absent, Def.’s Reply at 18. Construing the facts contained in the complaint
`“in a light most favorable to the plaintiff,” Cambridge, 558 F.3d at 1335, however, reveals that
`Gilead has adequately pled causation. If the government had disclosed its plans to pursue patent
`protection, “Gilead would have had the opportunity to consider its options, including providing
`[the] CDC and/or the PTO with information showing why any such patent would be invalid.”
`Compl. ¶ 110. The licensing dispute could “have been solved well before Gilead . . . sought an
`indication for [pre-exposure prophylaxis] and amplified the [g]overnment’s potential royalty
`claims . . . .” Hr’g Tr. 36:18-20 (Dec. 14, 2020). Moreover, the government could reasonably
`have anticipated that Gilead would incur licensing liability and that litigation would ensue after it
`allegedly encouraged Gilead to apply for FDA approval to market Truvada for HIV-1 pre-
`exposure prophylaxis. The harm Gilead suffered as a result of the government’s alleged failure to
`notify Gilead of its patent applications was thus foreseeable as well as direct.
`
`Third, the government argues that the timing of the patent applications and the formation
`of the CTA indicate that it could not have breached the CTA. Def.’s Mot. at 25-26. The
`government contends that it had filed the original patent application based on “preclinical work
`of CDC researchers reflected in the ’811 Provisional,” Def.’s Reply at 7-8 & n. 5, not
`necessarily on the CTA and the ensuing Botswana study, using Gilead material, id. at 8. This
`argument ignores the role of the ’547 Application filed in January 2007, respecting which Gilead
`alleges that the “CDC relied on information derived from the Botswana clinical trial to make
`decisions concerning the prosecution of the ’547 Application,” Compl. ¶ 11.5 It also sidesteps
`the fact that the government filed the ’750 application in 2018. Compl. ¶ 106. Gilead’s claim
`for breach of the CTA is thus adequately pled as well.
`
`CONCLUSION
`
`For the reasons set forth above, the United States’ motion to dismiss is DENIED. The
`United States shall file an answer to the complaint regarding the claims for breach of contract on
`or before January 27, 2021.
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`It is so ORDERED.
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`s/ Charles F. Lettow
`Charles F. Lettow
`Senior Judge
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`5 The first patent, No. 9,044,509, entitled “Inhibition of HIV Infection Through
`Chemoprophylaxis,” was issued upon the ’547 Application on June 2, 2015. See U.S. Patent No.
`9,044,509.
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`8
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