Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 1 of 18 PageID #: 631
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 22-252 (MSG)
`
`)))))))))
`
`
`)
`
`ARBUTUS BIOPHARMA CORPORATION
`and GENEVANT SCIENCES GMBH,
`
`Plaintiffs,
`
`v.
`
`MODERNA, INC. and MODERNATX, INC.,
`
`Defendants.
`
`DEFENDANTS’ REPLY BRIEF IN SUPPORT OF THEIR PARTIAL MOTION TO
`DISMISS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6)
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Brian P. Egan (#6227)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`began@morrisnichols.com
`
`Attorneys for Defendants
`
`OF COUNSEL:
`
`James F. Hurst
`KIRKLAND & ELLIS LLP
`300 North LaSalle
`Chicago, IL 60654
`(312) 862-2000
`
`Patricia A. Carson, Ph.D.
`Jeanna M. Wacker, P.C.
`Mark C. McLennan
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, NY 10022
`(212) 446-4800
`
`June 24, 2022
`
`

`

`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 2 of 18 PageID #: 632
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`INTRODUCTION .............................................................................................................. 1
`
`ARGUMENT ...................................................................................................................... 2
`
`A.
`
`B.
`
`C.
`
`D.
`
`Moderna Supplied Doses to the U.S. Government “for the Government” ............. 2
`
`Moderna Had “the Authorization and Consent of the Government” ...................... 6
`
`Plaintiffs’ Indirect Infringement Allegations Are Subject to Section
`1498(a) .................................................................................................................... 7
`
`Moderna’s Motion Is Not “Premature”................................................................... 9
`
`III.
`
`CONCLUSION ................................................................................................................. 10
`
`ii
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`
`TABLE OF AUTHORITIES1
`
`
`
`Page(s)
`
`Cases
`
`Advanced Software Design Corp. v. Fed. Rsrv. Bank of St. Louis,
`583 F.3d 1371 (Fed. Cir. 2009)............................................................................................5, 10
`
`ALA, Inc. v. CCAIR, Inc.,
`29 F.3d 855 (3d Cir. 1994).........................................................................................................9
`
`Astornet Techs. v. BAE Sys., Inc.,
`802 F.3d 1271 (Fed. Cir. 2015)..................................................................................................9
`
`Carrier Corp. v. United States,
`534 F.2d 244 (Ct. Cl. 1976) ...................................................................................................4, 5
`
`D3D Techs., Inc. v. Microsoft Corp., No. 6:20-CV-1699, 2021 WL 2194601
`(M.D. Fla., Mar. 22, 2021) ...........................................................................................6, 7, 9, 10
`
`Delgado v. ILWUPMA Welfare Plan, No. 2:18-CV-5539, 2019 WL 2864427
`(C.D. Cal. Apr. 26, 2019)...........................................................................................................7
`
`IRIS Corp. v. Japan Airlines Corp.,
`769 F.3d 1359 (Fed. Cir. 2014)..............................................................................................5, 9
`
`IV Sols., Inc. v. United HealthCare Servs., Inc., No. CV 16-09598,
`2017 WL 3018079 (C.D. Cal. July 12, 2017) ............................................................................7
`
`John J. McMullen Assocs., Inc. v. State Bd. of Higher Ed.,
`268 F. Supp. 735 (D. Or. 1967) .................................................................................................3
`
`Larson v. United States,
`26 Cl. Ct. 365 (1992) .............................................................................................................3, 4
`
`Leupold & Stevens, Inc. v. Lightforce USA, Inc.,
`449 F. Supp. 3d 1015 (D. Or. 2020) ..........................................................................................7
`
`M.D.C.G. v. United States,
`No. 7:15-CV-552, 2016 WL 6638845 (S.D. Tex. Sept. 13, 2016), aff’d in part,
`956 F.3d 762 (5th Cir. 2020) .....................................................................................................7
`
`1 Unless otherwise indicated, internal quotation marks and citations have been omitted from quoted
`material.
`
`iii
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`

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`
`Madey v. Duke Univ.,
`307 F.3d 1351 (Fed. Cir. 2002)................................................................................................10
`
`Merrell & Garaguso, Inc. v. Sunoco, Inc.,
`No. Civ.A. 04-1770, 2004 WL 1849705 (E.D. Pa. 2004) .......................................................10
`
`Molinaro v. Watkins-Johnson CEI Div.,
`359 F. Supp. 467 (D. Md. 1973) ................................................................................................5
`
`Morpho Detection, Inc. v. Smiths Detection Inc.,
`No. 2:11CV498, 2013 WL 5701522 (E.D. Va. Oct. 17, 2013) .................................................8
`
`Omega Advisors, Inc. v. Fed. Ins. Co.,
`No. CIV.A. 10-912 JAP, 2010 WL 4941457 (D.N.J. Nov. 30, 2010) .......................................9
`
`Phillips v. Ochoa,
`No. 2:20-cv-00272-JAD-VCF, 2020 WL 3128595 (D. Nev. June 12, 2020)............................7
`
`Richmond Screw Anchor Co. v. United States,
`275 U.S. 331 (1928) .............................................................................................................8, 10
`
`Riles v. Amerada Hess Corp.,
`999 F. Supp. 938 (S.D. Tex. 1998) ........................................................................................4, 5
`
`Saint-Gobain Ceramics & Plastics, Inc. v. II-VI Inc.,
`369 F. Supp. 3d 963 (C.D. Cal. 2019) .......................................................................................5
`
`Sevenson Env’t Servs., Inc. v. Shaw Env’t, Inc.,
`477 F.3d 1361 (Fed. Cir. 2007)..................................................................................................5
`
`Se. Ready Mix, LLC v. Argos N. Am. Corp.,
`No. 1:17-CV-02792, 2018 WL 8263138 (N.D. Ga. Aug. 22, 2018) .........................................7
`
`Thermalon Indus., Ltd. v. United States,
`34 Fed. Cl. 411 (1995) ...............................................................................................................4
`
`Toxgon Corp. v. BNFL, Inc.,
`312 F.3d 1379 (Fed. Cir. 2002)..................................................................................................9
`
`TVI Energy Corp. v. Blane,
`806 F.2d 1057 (Fed. Cir. 1986)................................................................................................10
`
`U.S. ex rel. Vampire Nation v. Citifinancial Mortg. Co.,
`No. CIV A 06-936, 2007 WL 2142404 (W.D. Pa. July 9, 2007), report and
`recommendation adopted as modified, No. CIV A 06-936, 2007 WL 2142410
`(W.D. Pa. July 24, 2007)............................................................................................................7
`
`iv
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`Windsurfing Int’l, Inc. v. Ostermann,
`534 F. Supp. 581 (S.D.N.Y. 1982) ............................................................................................4
`
`Rules
`
`Fed. R. Civ. P. 12 ...................................................................................................................7, 9, 10
`
`Statutes
`
`28 U.S.C. § 1498(a) ............................................................................................................... passim
`
`Other Authorities
`
`48 C.F.R. § 52.104(b) (FAR 52.104(b)) ..........................................................................................6
`
`48 C.F.R. § 52.227-1 (FAR 52.227-1) .........................................................................................6, 7
`
`v
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`

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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 6 of 18 PageID #: 636
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`I.
`
`INTRODUCTION
`
`At the outset of their brief, Plaintiffs specifically acknowledge that, in the face of an
`
`unprecedented health crisis, Moderna executed a contract with the U.S. Government and “then
`
`sold hundreds of millions of” doses of its life-saving COVID-19 Vaccine “to the U.S.
`
`[G]overnment.” Resp. Br. at 1 (emphasis added). In that contract, the Government expressly
`
`authorized any allegedly infringing activities necessary for Moderna to deliver its vaccine. Under
`
`§ 1498(a), that is enough to establish these doses were “use[d] or manufacture[d] for the United
`
`States” and Plaintiffs must file any infringement claim related to those doses in the Court of Federal
`
`Claims. Plaintiffs have not cited a single decision holding § 1498(a) does not apply to claims
`
`against products purchased by the Government and manufactured at the Government’s request.
`
`Instead, Plaintiffs make the remarkable claim that the Government did not purchase the
`
`vaccines “for the benefit of the U.S. government itself.” Resp. Br. at 2. The Government does not
`
`enter into gratuitous contracts. COVID-19 is a contagious disease that threatened all aspects of
`
`governance, including the healthcare system and the economy. By purchasing the vaccines, the
`
`Government ensured an adequate supply for the military, other essential government workers, and
`
`enough of the population to curtail the pandemic. To be sure, individuals also benefited. But §
`
`1498(a) does not demand that the Government be the sole beneficiary. Plaintiffs’ position that §
`
`1498(a) applies only under the improbable circumstances where the U.S. Government benefits,
`
`while its citizens do not, would eviscerate the entire purpose and intent of the statute. Every action
`
`the Government takes is supposed to benefit “the population as a whole.” Id. at 1.
`
`Semantic debates about whether the Government or citizens benefited are, in any event,
`
`beside the point. The government benefit test is a judicial gloss on § 1498(a)’s requirement that an
`
`allegedly infringing product must be “used or manufactured by or for the United States,” and the
`
`case law uniformly holds that the U.S. Government need not be the sole beneficiary. Where the
`
`

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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 7 of 18 PageID #: 637
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`U.S. expressly contracts for the manufacture of a product, the language of the statute makes clear
`
`it is for the benefit of the Government. That resolves Plaintiffs’ direct infringement claims.
`
`Plaintiffs’ indirect infringement arguments are equally inconsistent with the text, purpose,
`
`and intent of § 1498(a). According to Plaintiffs, even if Moderna is not liable for direct
`
`infringement under § 1498(a), it is still liable for alleged indirect infringement by pharmacists who
`
`administered the vaccine and patients who received vaccine doses. Section 1498(a) is intended to
`
`encourage companies to enter into government contracts without fear of the burden, expense, and
`
`potential liability of patent infringement litigation. Contractors would take little comfort if the
`
`statute protected them from direct infringement claims but not indirect infringement claims when
`
`a member of the public uses the product acquired and distributed by the Government. For that
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`reason, courts have consistently rejected similar arguments by litigants attempting to use indirect
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`infringement to circumvent § 1498(a)’s protections. Moderna’s partial motion should be granted.
`
`II.
`
`ARGUMENT
`
`A.
`
`Moderna Supplied Doses to the U.S. Government “for the Government”
`
`The language in Moderna’s contract with the Government is clear, direct, and emphatic
`
`that Moderna “manufactur[ed]” the relevant COVID-19 Vaccine doses “for the United States
`
`Government” (Ex. A at 19 (emphasis added); Resp. Br. at 13):
`
`The Department of Defense and Health and Human Services (HHS) require large
`scale manufacturing of vaccine doses in support of the national emergency response
`to the Coronavirus Disease 2019 (COVID-19) for the United States Government
`(USG) and the US population.
`
`Manufacturing and providing vaccine doses the Government contractually agreed to purchase is,
`
`by definition, “use or manufacture for the United States.” 28 U.S.C. § 1498(a).
`
`Despite the Government’s express statement, Plaintiffs argue that the Government received
`
`no benefit or at least was not the sole beneficiary. Resp. Br. at 1–2. Plaintiffs resort to a contrived
`
`2
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`

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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 8 of 18 PageID #: 638
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`distinction between benefits to the “U.S. population” and benefits to the Government. Id. at 10–
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`12. The distinction is non-sensical and illusory, particularly in the context of an infectious virus
`
`like SARS-CoV-2 that “quickly spread[] around the world.” Compl. ¶ 39.
`
`Government actions that benefit the U.S. public as a whole also benefit the U.S.
`
`Government. At bottom, nothing in the Complaint negates that Moderna’s sale and provision of
`
`the COVID-19 Vaccine was “for the Government.” The allegations Plaintiffs cite (Resp. Br. at
`
`12–15) simply recognize that individuals who received COVID-19 Vaccines also benefited. That
`
`does not deprive the Government of the benefits of its federally orchestrated mass vaccination
`
`campaign to ensure the health of the nation during a pandemic, in turn allowing the economy to
`
`reopen and recover, ensuring essential government services continued uninterrupted, and building
`
`the public’s trust in the Government. See John J. McMullen Assocs., Inc. v. State Bd. of Higher
`
`Ed., 268 F. Supp. 735, 739 (D. Or. 1967) (identifying “the safeguarding of public health” as being
`
`of “vital interest” to the Government under the first prong of § 1498(a)). It is astonishing that
`
`Plaintiffs would suggest that purchasing millions of vaccine doses to support a nationwide
`
`vaccination campaign in the midst of a pandemic is of no real benefit to the U.S. Government.
`
`Although that benefit is self-evident, Plaintiffs again ignore that it is expressly stated in the
`
`contract— “reduc[ing] SARS-CoV-2 transmission” and “mitigating the impact of COVID-19 on
`
`the nation and its people.” See Op. Br. at 5, 11 (emphasis added, citing Ex. A at 19).
`
`Unlike here, none of the cases Plaintiffs cite involved products purchased by the U.S.
`
`Government and manufactured at the Government’s request. Plaintiffs rely on Larson for the
`
`proposition that “the government’s payment for medical products for use by American citizens is
`
`not ‘for the government’ under section 1498(a)—even where the government ‘funds or reimburses
`
`all of part of’ their cost.” Resp. Br. at 10 (quoting Larson v. United States, 26 Cl. Ct. 365, 369
`
`3
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`

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`(1992)). But the court’s holding in Larson is not as sweeping as Plaintiffs suggest. As an initial
`
`matter, Larson did not involve any contract between the Government and the alleged infringer, let
`
`alone a contract with an authorization and consent clause. Instead, Larson involved healthcare
`
`providers who selected and purchased medical products from a supplier and later asked the
`
`Government for Medicare reimbursement. See Larson, 26 Cl. Ct. at 367–68. Here, the Government
`
`selected the vaccines, contracted to buy them directly from Moderna, and distributed them for the
`
`express benefit of mitigating the pandemic (in contrast to the scheme in Larson where any “types,
`
`models, or brand names of casts and splints” could be reimbursed). See id. at 367; Ex. A at 19.
`
`In Larson, the Court concluded that “use of plaintiffs’ casts and splints was for the benefit
`
`and convenience of the patient and provider, with no benefit to the government.” 26 Cl. Ct. at 369.
`
`In contrast, Moderna’s COVID-19 Vaccine has effects far beyond individual recipients, including
`
`prevention of widespread severe infections of others across the nation. Ex. A at 19. This disease-
`
`prevention benefit inures to the Government as well as the public by mitigating the health and
`
`economic effects of the COVID-19 pandemic, going far beyond the mere funding or
`
`reimbursement of individual “casts and splints” at issue in Larson.2
`
`The other cases Plaintiffs cite are even further afield. In Windsurfing Int’l, the court rejected
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`the tenuous theory that “the use of sailboards, chosen by an international body for use in Olympics
`
`to be held in the United States,” was “use ‘for’ the” government because “running of the Olympics
`
`generally” was in the nation’s interest. Windsurfing Int’l, Inc. v. Ostermann, 534 F. Supp. 581, 588
`
`(S.D.N.Y. 1982). Carrier Corp. and Riles (see Resp. Br. 11–12) are equally inapplicable, as in all
`
`three cases, the Government had no interest in, and no contract for, the particular infringing
`
`2 As Moderna discussed in its opening brief (Op. Br. at 12), Thermalon Industries, Ltd. v. United
`States, is illustrative of the fact that the Government’s purchase of vaccines is considered to be
`“for the general public welfare” (as indicated by the cf. citation). 34 Fed. Cl. 411, 420 (1995).
`
`4
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`

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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 10 of 18 PageID #: 640
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`apparatus or method. Carrier Corp. v. United States, 534 F.2d 244, 247 (Ct. Cl. 1976); Riles v.
`
`Amerada Hess Corp., 999 F. Supp. 938, 940 (S.D. Tex. 1998).
`
`Moderna need not “refute the Complaint’s allegations” that individuals also benefited.
`
`Resp. Br. at 13. While the manufacture or use must be “for the benefit of the government,”
`
`Advanced Software Design Corp. v. Fed. Rsrv. Bank of St. Louis, 583 F.3d 1371, 1378 (Fed. Cir.
`
`2009), even the cases Plaintiffs rely on recognize “[i]t is not necessary [for the Government] to be
`
`the sole beneficiary.” IRIS Corp. v. Japan Airlines Corp., 769 F.3d 1359, 1362 (Fed. Cir. 2014);
`
`Advanced Software, 583 F.3d at 1378 (same); see also Sevenson Env’t Servs., Inc. v. Shaw Env’t,
`
`Inc., 477 F.3d 1361, 1365 (Fed. Cir. 2007) (holding § 1498(a) does not even require a contract’s
`
`“primary purpose” be a government benefit). For that reason, several decisions have found §
`
`1498(a) applies where others benefited in addition to the Government. See Advanced Software
`
`Design, 583 F.3d at 1378 (finding first prong met where fraud detection software provided
`
`“significant benefits to the United States, along with the financial benefits accruing” to banks);
`
`Saint-Gobain Ceramics & Plastics, Inc. v. II-VI Inc., 369 F. Supp. 3d 963, 980 (C.D. Cal. 2019)
`
`(accused activities were “for the government,” and it was “of no consequence that defendants also
`
`stood to benefit financially”). The only decision Plaintiffs cite suggesting otherwise is a 50-year-
`
`old district court case that predates the Federal Circuit and is out of step with that court’s decisions.
`
`See Molinaro v. Watkins-Johnson CEI Div., 359 F. Supp. 467, 470 (D. Md. 1973).
`
`Finally, Plaintiffs mischaracterize Moderna’s position when they claim that under
`
`Moderna’s view, “every government-funded product used to advance any policy goal Congress
`
`articulates” would be subject to § 1498(a). Resp. Br. at 14. That is wrong. Moderna is not arguing
`
`§ 1498(a) extends that far. A run-of-the-mill research grant does not—like here—include a
`
`contract requirement for the Government to actually purchase any product resulting from the
`
`5
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`

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`research effort. Moderna’s contract is for the manufacture and supply of lifesaving products
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`directly to the Government. The terms of that agreement, along with the clear, direct benefit to the
`
`Government (and the general public) stemming from Moderna’s sale and provision of COVID-19
`
`Vaccine doses, unmistakably meet the first prong of § 1498(a).
`
`B.
`
`Moderna Had “the Authorization and Consent of the Government”
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`Plaintiffs do not deny that a FAR 52.227-1 authorization and consent clause satisfies the
`
`second prong of § 1498(a), as many other courts have found (Op. Br. at 12–14), nor do they dispute
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`that this clause is expressly incorporated into Moderna’s contract with the Government (Resp. Br.
`
`at 18–20).3 Instead, Plaintiffs speculate that this clause “may have been modified” in the redacted
`
`parts of the publicly available contract, and ask the Court not to take judicial notice of it. Id.4
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`There is no need for unfounded speculation. Section I of the contract, which includes the
`
`authorization and consent clause incorporated by reference, contains no redactions. See Ex. A at
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`45–51. Any modifications to that clause would need to appear in that unredacted section. By
`
`regulation, FAR clauses incorporated by reference must be modified by “insert[ing] the changed
`
`wording directly below the title of the provision or clause . . .” FAR 52.104(b). No such
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`modification appears in Section I. The redactions to other sections protect sensitive information
`
`such as individuals’ names and locations for the delivery of the vaccine. Ex. A at 31, 36–39. The
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`court in D3D Techs., Inc. v. Microsoft Corp. issued a § 1498(a) dismissal based on a government
`
`contract, like here, with an express authorization clause that had unrelated redactions of sensitive
`
`information. 2021 WL 2194601, at *2 (M.D. Fla. Mar. 22, 2021) (“The significance and
`
`3 Plaintiffs similarly do not dispute that the broader FAR 52.227-1 Alternate I authorization and
`consent clause is also incorporated and satisfies the second prong. See Op. Br. at 13 n.6.
`4 Contrary to Plaintiffs’ assertion, Moderna asks the Court to take judicial notice of the contents
`of the contract (i.e., that it contains FAR 52.227-1), not the “truth of the content.” Resp. Br. at 18.
`
`6
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`

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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 12 of 18 PageID #: 642
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`authenticity of the IVAS contract is undisputed, and D3D references the contract in its
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`Response.”); Ex. C (redacted contract attached to motion to dismiss in D3D Techs.).
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`D3D Techs. is not an outlier. When resolving motions to dismiss, courts frequently take
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`judicial notice of lightly redacted public records or publicly available documents. See, e.g., U.S.
`
`ex rel. Vampire Nation v. Citifinancial Mortg. Co., No. CIV A 06-936, 2007 WL 2142404, at *6
`
`n.5 (W.D. Pa. July 9, 2007) (taking judicial notice of a mortgage agreement, applying 12(b)(6)
`
`standard, as a public record, although “redacted to delete social security numbers”), report and
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`recommendation adopted as modified, No. CIV A 06-936, 2007 WL 2142410 (W.D. Pa. July 24,
`
`2007); M.D.C.G. v. United States, No. 7:15-CV-552, 2016 WL 6638845, at *15 n.10 (S.D. Tex.
`
`Sept. 13, 2016) (analyzing 12(b)(6) dismissal, taking judicial notice of “publicly available
`
`(although partially redacted) report cited by Plaintiffs’ response”), aff’d in part, 956 F.3d 762 (5th
`
`Cir. 2020). In the cases Plaintiffs cite, courts refused to take judicial notice when redactions
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`appeared to conceal key facts or otherwise rendered it difficult to evaluate. Resp. Br. at 9, 19 (citing
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`IV Sols., Delgado, Se. Ready Mix, and Phillips). Neither concern applies here. Plaintiffs also cite
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`Leupold & Stevens, Inc. v. Lightforce USA, Inc., but that involved “significant questions of fact as
`
`to which contracts” contained Government authorization. 449 F. Supp. 3d at 1021 (emphasis in
`
`original). Here, there is no dispute that the contract incorporates FAR 52.227-1.
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`It makes no difference that the Government has not filed a statement of interest because
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`one is unnecessary here. Resp. Br. at 19–20. The Government already stated its interest in any
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`patent litigation over Moderna’s COVID-19 Vaccine. That is the purpose of including a FAR
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`52.227-1 authorization and consent in the contract. Nothing more is needed. See D3D Techs., 2021
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`WL 2194601, at *3 (granting 12(b)(6) motion under § 1498(a) without Government statement).
`
`C.
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`Plaintiffs’ Indirect Infringement Allegations Are Subject to Section 1498(a)
`
`Plaintiffs’ argument that Moderna’s alleged “inducement of, and contribution to,
`
`7
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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 13 of 18 PageID #: 643
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`infringement by healthcare providers and individual vaccine recipients” falls outside § 1498’s
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`protections is just as wrong and equally problematic. Resp. Br. at 15. Section 1498(a) is supposed
`
`to “relieve the contractor entirely from liability of every kind for the infringement of patents.”
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`Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 343 (1928) (emphasis added). The
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`statute thus bars indirect infringement claims against government contractors “when such
`
`contractor is also liable for direct infringement and the United States government has assumed
`
`liability for such contractor’s direct infringement pursuant to § 1498(a).” Morpho Detection, Inc.
`
`v. Smiths Detection Inc., No. 2:11CV498, 2013 WL 5701522, at *4 (E.D. Va. Oct. 17, 2013). That
`
`makes sense. Protecting contractors from direct—but not indirect—infringement liability would
`
`do little to ease the fears of government contractors about the risk of costly patent litigation.
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`Here, Plaintiffs’ direct and indirect infringement claims all stem from the same allegedly
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`infringing product—Moderna’s COVID-19 Vaccine—that was sold, manufactured, and
`
`distributed for the Government and with its authorization and consent. Therefore, consistent with
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`“the clear directive in § 1498(a) as to the exclusive nature of the remedy provided therein,” all of
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`Plaintiffs’ infringement claims against Moderna respecting COVID-19 Vaccine doses sold and
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`provided to the Government (regardless of who ultimately administered or received those doses)
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`are subject to § 1498(a) and must be dismissed. Id. at *5.
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`Were there any doubt, the contract makes clear the Government purchased the COVID-19
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`Vaccine doses so that they would be administered by healthcare providers to the general public.
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`See, e.g., Ex. A at 20 (clauses C.3.1.1.1 and C.3.1.1.3, reciting requirements to ensure the product
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`is “available for use in target populations”); Compl. ¶¶ 115 (alleging that “[w]hen used as intended,
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`the Accused Product infringes the ’668 Patent’s method claims.”), 139 (same with respect to the
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`’435 Patent). This should come as no surprise. Though there is no requirement that a product must
`
`8
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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 14 of 18 PageID #: 644
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`be both manufactured and used for the benefit of the Government, here the Government clearly
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`and directly benefits from the COVID-19 Vaccine mitigating the public health, political, and
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`economic effects of the pandemic—effects that do not accrue unless and until the vaccines are
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`administered. Because the administration of government-purchased Moderna COVID-19 Vaccine
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`doses leads to these government benefits, the allegedly infringing act of administering the vaccines
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`is “for the Government” and claims for Moderna’s alleged indirect infringement must be brought
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`against the United States in the Court of Federal Claims. See Astornet Techs. v. BAE Sys., Inc., 802
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`F.3d 1271, 1277–78 (Fed. Cir. 2015) (indirect infringement claims are barred by §1498(a) where
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`the underlying act of direct infringement is performed by or for the Government).
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`D.
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`Moderna’s Motion Is Not “Premature”
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`Plaintiffs’ argument that § 1498(a) defenses must wait until summary judgment is
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`meritless. Courts regularly dismiss claims under § 1498(a) that should have been filed in the Court
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`of Claims against the Government. See, e.g., Astornet, 802 F.3d at 1276, 1283 (affirming motion
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`to dismiss under § 1498(a)); Japan Airlines, 769 F.3d at 1363 (same); D3D Techs., 2021 WL
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`2194601, at *1 (granting motion to dismiss under § 1498(a)). The Federal Circuit’s decision in
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`Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1380 (Fed. Cir. 2002), does not cast doubt on these
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`decisions. Toxgon merely held § 1498 is not a jurisdictional defense that can be raised in a Rule
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`12(b)(1) motion, id. at 1382, and subsequent Federal Circuit decisions have affirmed Rule 12(b)(6)
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`dismissals based on § 1498(a) defenses. See Astornet, 802 F.3d at 1276, 1283; Japan Airlines, 769
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`F.3d at 1363.
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`The only restriction on raising an affirmative defense in a motion to dismiss is that the
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`defense must appear on the “face” of the pleadings and anything subject to judicial notice. ALA,
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`Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994); Omega Advisors, Inc. v. Fed. Ins. Co., No.
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`CIV.A. 10-912 JAP, 2010 WL 4941457, at *5 (D.N.J. Nov. 30, 2010). Moderna’s § 1498 defense
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`9
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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 15 of 18 PageID #: 645
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`is evident from the unambiguous terms of Modern’s contract with the Government—none of which
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`are contradicted by allegations in the Complaint. Rule 12(b)(6) allows for the assertion of such a
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`defense at the pleading stage.
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`Plaintiffs claim that dismissal is unjustified because “[n]o count would be dismissed” and
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`it “would not streamline” the case. Resp. Br. at 4, 18. Whether Moderna’s § 1498 defense would
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`eliminate an entire count is irrelevant. Courts can and do dismiss parts of a Complaint. See, e.g.,
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`D3D Techs., 2021 WL 2194601, at *5; Merrell & Garaguso, Inc. v. Sunoco, Inc., No. Civ.A. 04-
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`1770, 2004 WL 1849705, at *2–3 (E.D. Pa. 2004). Plaintiffs cannot do an end-run around § 1498
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`by simply lumping immune sales together with other sales. As for discovery, Plaintiffs have
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`previewed that they intend to subject Moderna to unnecessary and burdensome discovery on the
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`“negotiations” and “communications” relating to the contract, and “how the purchased doses were
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`distributed and to whom.” Resp. Br. at 17. None of this would be necessary if claims related to
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`those sales are dismissed.5 In fact, no discovery on infringement or damages would be needed for
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`the batches containing the “more than 200 million doses” supplied under the contract. Compl.
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`¶ 51.6 Streamlining discovery in this way would further § 1498(a)’s goal of sparing government
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`contractors from “expensive litigation.” TVI Energy Corp. v. Blane, 806 F.2d 1057, 1059–60 (Fed.
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`Cir. 1986); see also Richmond Screw, 275 U.S. at 342–43 (explaining that § 1498(a) was adopted
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`in part based on concerns that government contractors “are exposed to expensive litigation”).
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`III.
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`CONCLUSION
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`Moderna respectfully requests that the Court grant its partial motion to dismiss.
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`5 Advanced Software Design and Madey are inapposite because the Government was not a party
`to the contracts that did not include an authorization and consent clause. See Advanced Software
`Design, 583 F.3d at 1373–74, 1377; Madey v. Duke Univ., 307 F.3d 1351, 1359 (Fed. Cir. 2002).
`6 Partial dismissal would also ensure that the Government could litigate the “reasonable and entire
`compensation” in the Court of Federal Claims for any alleged infringement. 28 U.S.C. § 1498(a).
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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 16 of 18 PageID #: 646
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`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`
`/s/ Brian P. Egan
`
`Jack B. Blumenfeld (#1014)
`Brian P. Egan (#6227)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`began@morrisnichols.com
`
`Attorneys for Defendants
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`OF COUNSEL:
`
`James F. Hurst
`KIRKLAND & ELLIS LLP
`300 North LaSalle
`Chicago, IL 60654
`(312) 862-2000
`
`Patricia A. Carson, Ph.D.
`Jeanna M. Wacker, P.C.
`Mark C. McLennan
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, NY 10022
`(212) 446-4800
`
`June 24, 2022
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`11
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`

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`Case 1:22-cv-00252-MSG Document 23 Filed 06/24/22 Page 17 of 18 PageID #: 647
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`CERTIFICATE OF SERVICE
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`I hereby certify that on June 24, 2022, I caused the foregoing to be electronically filed with
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`the Clerk of the Court using CM/ECF, which will send notification of such filing to all registered
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`participants.
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`I further certify that I caused copies of the foregoing document to be served on June 24,
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`2022, upon the following in the manner indicated:
`
`John W. Shaw, Esquire
`Karen E. Keller, Esquire
`SHAW KELLER LLP
`I.M. Pei Building
`1105 North Market Street, 12th Floor
`Wilmington, DE 19801
`Attorneys for Plaintiffs Arbutus Biopharma
`Corporation and Genevant Sciences GmbH
`
`Daralyn J. Durie, Esquire
`Eric C. Wiener, Esquire
`DURIE TANGRI LLP
`217 Leidesdorff Street
`San Francisco, CA 94111
`Attorneys for Plaintiff Arbutus Biopharma
`Corporation
`
`Kira A. Davis, Esquire
`DURIE TANGRI LLP
`953 East 3rd Street
`Los