The US Court of Appeals for the Federal Circuit affirmed a
district court finding of unenforceability, concluding that a
patent owner's unclean hands can render patents unenforceable
based on a materiality standard of conduct that had an
"immediate and necessary relation to . . . the matter in
litigation," which included conduct with the "objective
potential" to affect the litigation. Gilead Sciences, Inc.
v. Merck & Co., Inc. et al., Case No. 16-23102; -2615
(Fed. Cir., Apr. 25, 2018) (Taranto, J).
The case involved two Merck patents related to Hepatitis C
treatment. Gilead, which had developed its own Hepatitis C
treatments, sought declaratory judgment that the Merck patents were
invalid. Merck counterclaimed. The jury ruled for Merck and awarded
damages. Thereafter, the district court held a bench trial on
Gilead's equitable defenses, including unenforceability of the
patents based on Merck's unclean hands. The district court
ruled in favor of Gilead, concluding
