Moderna patent fight about feathers, not goose

NEW YORK, Aug 29 (Reuters Breakingviews) – Moderna’s (MRNA.O)claim that the Covid-19 vaccine developed by Pfizer (PFE.N) and partner BioNTech (22UAy.DE) used its intellectual property sounds explosive. The sums at stake are potentially huge, as the drug giant estimates sales of the vaccine will be $32 billion this year. It’s in nobody’s interest to kill this golden goose though. The most likely result will simply be lots of legal hissing, and at worst for Pfizer, a few plucked feathers.

The mRNA vaccines sold by Moderna and Pfizer have a tangled history of development, relying on a basket of new technologies created by different firms, universities and government institutions. Some key intellectual property was licensed through multiple firms, or sublicensed, according to Nature. The relative utility of technologies needed to produce a functional vaccine – and who owns it – is hotly disputed. Moderna is itself being sued by at least three public firms over technologies used in its vaccine. They aren’t seeking Moderna’s vaccine to be removed from the market, and Moderna isn’t looking to do that to Pfizer either.

Still, Moderna probably won’t get a giant amount by way of hard dollars. Moreover, vaccine revenue should drop rapidly in upcoming years. Assume a generous $10 billion in sales a year, and a 3% royalty, as Jefferies says is typical for a platform royalty, and that would be $300 million a year. For context, Moderna’s estimated profit this year is $11 billion, according to Refinitiv.

In reality, total damages are likely to be even smaller, if they come at all. The company isn’t seeking damages for sales before March 8, 2022, because the firm said it would not enforce its intellectual property rights during the pandemic. Moreover, Moderna says it won’t seek money from the use of Pfizer’s vaccine in 92 poorer countries, or sales where the U.S. government would be responsible for damages.

That’s largely because drugmakers are, by necessity, political animals, and a long, public, fight runs the risk of making the firms involved look grubby, which is politically damaging. Rather Moderna is probably looking to stake its claim on mRNA technology, which is the firm’s reason for existence. While Covid-19 vaccines are less urgent, the general blueprint may be useful in preventing other diseases, and both firms want to develop them. Having a court-validated claim over key technologies might be useful for taking in future royalties – or paying them.

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CONTEXT NEWS

Moderna said on Aug. 26 it was suing Pfizer and its German partner BioNTech for patent infringement in the development of the first Covid-19 vaccine. The biotechnology firm filed a lawsuit in U.S. District Court in Massachusetts and said it would also file a suit in Germany.

Moderna is not seeking to remove Pfizer’s vaccine from the market. The firm is also not seeking damages for sales occurring before March 8, 2022. And it is not looking for damages for sales of Pfizer’s vaccine in 92 poor and middle-income countries, or sales where the U.S. government would be responsible for any damages.

Editing by Lauren Silva Laughlin and Amanda Gomez

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