Moderna v. Pfizer and BioNTech [2024] EWHC 1648 (Pat)
On the same day Mr Justice Meade handed down his technical judgment in Pfizer/BioNTech v. Moderna (which concerned the validity of Moderna’s patents, see here), Mr Justice Richards gave a judgment addressing the parallel contractual dispute between the parties. The key issue in these proceedings was whether Moderna had implicitly consented to Pfizer/BioNTech (hereafter “Pfizer”) using its technology as a consequence of a public “pledge” made during the COVID-19 pandemic that it would not enforce its COVID-19 patents while the pandemic persisted. The case centred on the interpretation and implication of this pledge.
Background
Moderna’s original pledge, made on 8 October 2020, was that it would not enforce its COVID-19-related patents against any company making vaccines to combat the pandemic (the “Pledge”). Pfizer contended that the Pledge extended to them and that it provided a defence to any infringement allegations up until 5 May 2023 (when the World Health Organisation advised that COVID-19 no longer constituted a public health emergency of international concern).
Moderna’s Arguments
Moderna challenged this interpretation of the Pledge, asserting that:
1. The Pledge did not provide blanket consent to companies like Pfizer, who were already manufacturing COVID-19 vaccines prior to the Pledge.
2. The consent was revoked by a subsequent statement issued on 7 March 2022 (the “March 2022 Statement”), which specified that non-enforcement would only apply to vaccines destined for 92 low- and middle-income countries.
3. The pandemic period, as referenced in the Pledge, had ended in the UK by July 2021 due to a vaccine surplus, thus terminating any implied consent by that date.
Decisions
Justice Richards’ judgement addressed the following:
The objective meaning of the Pledge and the March 2022 Statement
Mr Justice Richards considered that the Pledge, when read objectively, conferred a broad, forward-looking benefit to any entity making vaccines to combat the pandemic and did not exclude Pfizer (or any other manufacturer). However, the Pledge was found to lack a clear definition of when the pandemic period ended, creating uncertainty for manufacturers relying on it. This ambiguity was significant given the substantial investments involved in vaccine production.
The Judge nevertheless accepted Moderna’s argument that the March 2022 Statement did indeed intend to revoke the relevant aspects of the Pledge thereby enabling Moderna to enforce its patents against parties manufacturing vaccines for use outside the prescribed 92 low- and middle-income countries and which had not taken a licence on “commercially reasonable terms”. This was, in part, due to a contemporaneous statement of Moderna’s chief executive, cited by the Judge, which stated:
“If people have used, or are using our technology to make a vaccine, I don’t understand why, once we’re in an endemic setting where there’s plenty of vaccine and there is no issue to supply vaccines, why we should not get rewarded for the things we invented.”
Unilateral Contract
Pfizer also argued that the Pledge had effectively set out the terms of an offer which they had accepted by conduct, resulting in a binding unilateral contract governed by the law of Massachusetts. The basic premise of Massachusetts contract law is familiar to English and Welsh lawyers, save for the absence of the requirement of the parties to have an “intention to create legal relations”. Therefore, the expected criteria of offer, acceptance and consideration were examined in turn.
• Offer: Mr Justice Richards decided that the absence of certainty as to the duration of the promise in the Pledge meant that there could be no “offer”. However, the Judge continued to address the issues of acceptance and consideration on the basis that an offer had been made.
• Acceptance: The Judge did not accept Pfizer’s claim that they had accepted an offer, if one had existed, by continuing vaccine production. The Judge found their actions were independently motivated by objective factors, including existing contracts and
commercial interests.
• Consideration: For the same reasons he decided that there was no acceptance of an offer, Mr Justice Richards determined that there had been no consideration given by Pfizer.
Given that Pfizer did not change their position or provide new consideration based on the Pledge, the Judge concluded that no unilateral contract existed.
US Federal Law Waiver
Pfizer argued that the Pledge could have amounted to a waiver under US Federal Law. A waiver in this context involves the intentional relinquishment of a known right. The Judge determined that the Pledge was, at most, a temporary forbearance to sue, rather than an express waiver of rights. Even if it had been an express waiver, the March 2022 Statement validly retracted it, as Pfizer had not materially altered their position based on the Pledge.
However, a temporary forbearance to sue amounts to consent in the context of patent litigation wherein the only value in a patent is the monopoly rights granted. The Pledge therefore amounted to non-contractual consent for Pfizer to manufacture its COVID-19 vaccines between 8 October 2020 and 7 March 2022 without infringing Moderna’s patents under s60 of the Patents Act 1977.
Conclusion
Ultimately, the Judge decided that while the Pledge provided a temporary assurance to others that Moderna would not enforce its COVID-19 patents, this assurance was revocable. The March 2022 Statement constituted a clear revocation, limiting Pfizer’s defence to the period before this date. Thus, any acts of patent infringement by Pfizer post-7 March 2022 would not be covered by the Pledge, allowing Moderna to seek relief for infringements occurring after this date.
