Moderna Settles with Genevant and Arbutus, Ending LNP Patent Dispute

In a press release issued on Tuesday, Genevant Sciences and Arbutus Biopharma announced they have entered into a global settlement with Moderna, Inc. that could result in a payment of up to $2.5 billion. The announcement stated that the settlement resolves all U.S. and international patent litigation concerning the unauthorized use of Genevant’s and Arbutus’ lipid nanoparticle (LNP) delivery technology in Moderna’s COVID-19 vaccines. The agreement came just days before a highly anticipated jury trial was scheduled to begin in the U.S. District Court for the District of Delaware.

According to the press release, Moderna will make an upfront payment of $950 million to Genevant and Arbutus in July 2026. The companies also noted that an additional $1.3 billion payment is contingent on a favorable appellate ruling that 28 U.S.C. § 1498 does not bar the claims against Moderna for patent infringement, except for a small fraction of doses sold to U.S. government employees. Moderna has also consented to a judgment of infringement and no invalidity for the four patents asserted in the case.

Moderna issued its own press release Tuesday in which it expressed confidence in its appeal to the U.S. Court of Appeals for the Federal Circuit, noting that “the Company has concluded that a loss related to the pending Section 1498 proceeding is not probable.” It added, however, that, if the Federal Circuit does affirm liability under Section 1498, “Moderna has agreed to make an additional payment of up to $1.3 billion within 90 days of that decision, depending on the scope of the decision. Thereafter, should Moderna ultimately prevail through further proceedings – whether en banc, at the Supreme Court, or on remand to the district court – Arbutus/Genevant will refund the full payment plus interest.”

District Court Proceedings

On February 18, Judge Wolson granted in part a motion for summary judgment that narrowed the invalidity defenses Moderna could assert at trial. The court precluded Moderna from challenging several Arbutus patents on obviousness and derivation grounds. However, the court found that Moderna had raised a genuine factual dispute regarding enablement that must be resolved by a jury.

Regarding the obviousness defense, the court found that inter partes review (IPR) estoppel and the common law doctrine of issue preclusion barred Moderna’s arguments. Moderna had previously challenged one of the patents, U.S. Patent No. 9,364,435, in an IPR proceeding before the Patent Trial and Appeal Board (PTAB), which issued a final written decision rejecting Moderna’s invalidity challenge. The court held that IPR estoppel under 35 U.S.C. § 315(e)(2) prevents Moderna from re-litigating the same arguments or any that could have been reasonably raised. Judge Wolson rejected Moderna’s contention that estoppel should not apply because the U.S. Court of Appeals for the Federal Circuit (CAFC) dismissed its subsequent appeal for lack of standing, writing that “IPR estoppel is not a common law doctrine; it is a Congressional creation.” The court also granted Arbutus’s motion to exclude the obviousness opinions of Moderna’s expert.

Moreover, the court granted summary judgment to Arbutus, and to prove derivation under 35 U.S.C. § 102(f), Moderna needed to show that another inventor conceived of the invention and communicated that conception to the Arbutus inventors. The court also found that Moderna had failed to demonstrate a prior conception.

On February 4, Judge Wolson issued another key summary judgment ruling that significantly impacted the case. The court interpreted the phrase “for the Government” in 28 U.S.C. § 1498 to mean that the use of a patented product must be for the benefit of the Government itself, not the benefit of the patients who receive it. This decision precluded Moderna from using Section 1498 as an affirmative defense for the vast majority of its over $8.2 billion in vaccine sales to the U.S. government, keeping those sales in the case for damages calculations. The court, however, found that the defense could apply to vaccines provided to government employees, which Arbutus alleged accounted for only 1.25% of the total.

Similarly, in the February 4 ruling, the court held that Arbutus’s removal of the term “about” from its claimed lipid ranges during patent prosecution invoked prosecution history estoppel. This decision foreclosed Arbutus from asserting infringement under the doctrine of equivalents, requiring it to prove its case under a heightened literal infringement standard.

The dispute centered on four Arbutus patents related to its LNP technology, which is crucial for delivering messenger RNA (mRNA) such as that used in Moderna’s Spikevax® vaccine. Three of the patents, U.S. Patent Nos. 8,492,359, 9,364,435, and 11,141,378 are known as the “Molar Ratio Patents” and claim specific percentage ranges for the four lipid components that form the nanoparticles. The fourth, U.S. Patent No. 9,504,651, claims a method for formulating the LNPs.

Potential to Be Largest Public Pharma Patent Settlement

Under the terms of the settlement, the press release explained that Genevant has granted Moderna a global non-exclusive license to its LNP delivery technology for infectious disease applications. Additionally, there is a covenant not to sue regarding certain Genevant/Arbutus patents and Moderna products. This ends all patent-infringement litigation between the companies over the COVID-19 vaccines.

Lindsay Androski, President and Chief Executive Officer of Arbutus, said the settlement is a “transformative outcome for Arbutus as a company, but more importantly, it is a long-overdue recognition that the COVID-19 vaccines would never have made it to the world without the seminal work of” the Arbutus scientists.

If the complete $2.25 billion is paid, the deal would represent the largest disclosed patent settlement in the pharmaceutical industry and the second largest in any industry, according to the press release.

Arbutus also announced it is evaluating a return of capital to its shareholders in the third quarter of 2026, following the upfront payment.

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