By Jorge L. Contreras
On July 2, 2024, the High Court of the United Kingdom issued a decision in Moderna’s mRNA vaccine patent litigation against Pfizer and BioNTech. As I previously discussed in October of 2020, Moderna pledged not to enforce its patents against makers of COVID-19 vaccines during the pandemic. Then, in 2022, Moderna sued competing vaccine makers Pfizer and BioNTech. Pfizer/BioNTech responded that Moderna’s pledge authorized them to practice the asserted patents, at least until the end of the World Health Organization (WHO)-declared pandemic, which occurred in May 2023. Last week, however, the U.K. court found that the “forward-looking statement” boilerplate routinely appended to press releases of U.S. public companies permitted Moderna to revoke its pledge before the end of the pandemic, and that Moderna successfully did so in March 2022.
The Vaccine Wars
The litigation between Moderna and Pfizer/BioNTech is part of the global “vaccine war” that has embroiled multiple companies over patents covering components of COVID-19 mRNA vaccines. Beginning in August 2022, Moderna brought patent infringement actions against Pfizer/BioNTech in the United States, Germany, United Kingdom, the Netherlands, Ireland, and Belgium. The U.K. case — the first to reach a substantive judgment — was divided between two High Court judges: Richard Meade, who adjudicated the patent trial and Jonathan Richards, who adjudicated the pledge trial. Judge Meade found that, of the two U.K. patents asserted by Moderna, one was invalid but the other was valid and infringed. This left Pfizer/BioNTech’s patent pledge defense to Judge Richards, whose analysis and decision are discussed below.
Moderna’s Pledge and Update
In its 2020 pledge, Moderna stated that “while the pandemic continues, Moderna will not enforce our COVID-19 related patents against those making vaccines intended to combat the pandemic.” On March 7, 2022, Moderna issued an Updated Patent Pledge, in which Moderna states that it will never enforce its patents against companies supplying COVID-19 vaccines for 92 low- and middle-income countries, thereby making the pledge for those countries perpetual. The Update, however, is less clear about the effect of the pledge in high-income countries like the United States, the United Kingdom and members of the European Union. Despite some linguistic ambiguity, Moderna claimed that the Update revoked the pledge as to these countries, even though, according to the WHO, the pandemic had not yet ended.
Interpreting Moderna’s Pledge
To analyze Pfizer/BioNTech’s pledge defense, Judge Richards had to determine both whether the pledge created any legal obligation on Moderna and, if so, how long that obligation lasted.
Forward-Looking Statements
Moderna announced its 2020 pledge in a corporate press release. Like all publicly-traded companies in the United States, Moderna appends to its press releases a boilerplate statement concerning “forward-looking statements.” This language exists because of the 1995 Private Securities Litigation Reform Act, which sought to reduce the number of “frivolous” securities actions brought by disappointed shareholders of public companies when corporate revenue and earnings projections failed to materialize. Under the Act, if a company identifies a “forward-looking statement” and accompanies it with “meaningful cautionary statements,” then a securities fraud lawsuit cannot be based on the failure of those statements accurately to predict the future [15 U.S.C. § 78u-5(c)(1)].
Though Judge Richards recognized the securities law origin of Moderna’s boilerplate language [¶ 48], he nevertheless reached the surprising conclusion that it limited Moderna’s patent pledge. He reasoned that the boilerplate “makes two distinct but related points. First, Moderna reserves the right to change its mind in the future and so enforce its COVID-19 related patents even during the pandemic period. Second, even in the period before Moderna communicates an intention to change its mind, the pledge not to enforce patents is neither a promise nor a guarantee and a reader should not place undue reliance on it.” [¶ 51, emphasis added].
Character of the Pledge
The inordinate (in my view) weight that Judge Richards gives to Moderna’s boilerplate disclaimer severely limits the effect of its patent pledge. First, because Moderna reserved the right to “change its mind” with respect to the pledge, no binding contract was formed between the parties [¶ 97]. Likewise, the pledge could not be construed as a waiver of rights under U.S. law. While Judge Richards appears to concede that Moderna might be unable to retract its pledge if Pfizer/BioNTech had detrimentally relied on it, he found no evidence of reliance [¶ 177].[1] Accordingly, the court characterized Moderna’s pledge as a mere “temporary forbearance to sue,” which Moderna could retract at any time [¶ 177].
Retraction of the Pledge
Following this reasoning, Judge Richards interpreted Moderna’s March 2022 Update to be a valid retraction of the pledge [¶¶ 62-65]. Thus, rather than terminate at the end of the pandemic as declared by the WHO (May 2023), the court held that the pledge ended in March 2022. Accordingly, as illustrated in the Figure below, Pfizer/BioNTech received the benefit of the pledge during the period indicated by [3] – October 2020 through March 2022 — rather than May 2023 (period [4]) – a difference of 14 months. Nevertheless, the pledge as established by the court was still 8 months longer than Moderna proposed by arguing that the pandemic ended in July 2021, when vaccine supplies in the United Kingdom “ceased to be a barrier to access” [¶ 37] (period [2]).
Conclusion
The U.K. court’s July 2 decision is important because it recognizes both the validity and the enforceability of Moderna’s patent pledge – findings that should inform the reasoning of other courts as they adjudicate this case. However, Judge Richards’s infusion of substantive meaning into Moderna’s boilerplate text goes too far. Given that the pandemic, as defined by the WHO, ended in May 2023, Judge Richards should have recognized that the pledge continued until that time. Instead, he permitted Moderna to renege on its pledge 14 months early on the basis of corporate boilerplate that almost certainly played no role in Moderna’s original conception of the pledge.
As I argued in 2022, one reason that Moderna’s attempt to renege on its 2020 patent pledge is noteworthy is its potentially damaging effect on the integrity of the much larger patent pledging ecosystem. Patent pledges underlie industries ranging from telecommunications and computing to transportation and agriculture. Casting doubt on the legal durability of these pledges, and allowing pledgors to retract them at will, could disrupt a broad range of beneficial economic activity. Accordingly, I would urge other courts considering this case to disregard the boilerplate that accompanied Moderna’s pledge and instead uphold the language of the pledge itself, which was surely intended to last as long as Moderna said it would.
[1] I have written at length about reliance and promissory estoppel for patent pledges. As I noted in 2022, “even if Pfizer would have made its vaccine anyway, it certainly would have priced it differently had it known it would have to pay a royalty to Moderna. So detrimental reliance should not be hard for Pfizer to prove.”
