By Daniel Trotta
(Reuters) -Moderna sued Pfizer and its German partner BioNTech on Friday for patent infringement in the development of the first COVID-19 vaccine approved in the United States, alleging they copied technology that Moderna developed years before the pandemic.
The lawsuit, which seeks undetermined monetary damages, was filed in U.S. District Court in Massachusetts. The suit also would be filed also in the Regional Court of Duesseldorf in Germany, Moderna said in a news release.
"We are filing these lawsuits to protect the innovative mRNA technology platform that we pioneered, invested billions of dollars in creating, and patented during the decade preceding the COVID-19 pandemic," Moderna Chief Executive Stephane Bancel said in the news release.
Moderna Inc, on its own, and the partnership of Pfizer Inc and BioNTech SE were two of the first groups to develop a vaccine for the novel coronavirus, leading to a revenue windfall.
The U.S. Food and Drug Administration granted emergency use authorization for the COVID-19 vaccine first to Pfizer/BioNTech in December 2020, then one week later to Moderna.
Moderna's COVID vaccine - its lone commercial product - has brought in $10.4 billion in revenue this year while Pfizer's vaccine brought in about $22 billion.
Pfizer said the company was confident in its intellectual property and would vigorously defend against the allegations.
"We are surprised by the litigation given the COVID-19 vaccine was based on BioNTech's proprietary mRNA technology and developed by both BioNTech and Pfizer," a Pfizer spokesperson said in an emailed statement.
BioNTech called the lawsuit "unfortunate" and declared its work was original.
"We will vigorously defend against all allegations of patent infringement," the company said in a statement.
Just a decade old, Moderna, based in Cambridge, Massachusetts, had been an innovator in the messenger RNA (mRNA) vaccine technology that enabled the unprecedented speed in developing the COVID-19 vaccine.
An approval process that previously took years was completed in months, thanks largely to the breakthrough in mRNA vaccines, which teach human cells how to make a protein that will trigger an immune response.
BioNTech had also been working in this field when it partnered with the U.S. pharma giant Pfizer.
Moderna alleges Pfizer/BioNTech, without permission, copied mRNA technology that Moderna had patented between 2010 and 2016, well before COVID-19 emerged in 2019 and exploded into global consciousness in early 2020.
Moderna said its lawsuit was not meant to stop people from getting vaccines, and it repeated its pledge to never enforce its COVID-19 patents in 92 low- and middle-income countries.
But Moderna said it did expect companies such as Pfizer and BioNTech to respect its intellectual property rights, and it is seeking royalty payments based on sales after March 8, 2022, and excluding sales to the U.S. government or to low-income countries.
LENGTHY DISPUTE EXPECTED
If it ultimately prevails, the royalty in such cases is usually a "high single digit" percentage of sales, according to Jacob Sherkow, a University of Illinois College of Law professor who specializes in biotech intellectual property issues.
Wall Street analysts expect the dispute to take years.
Jorge Contreras, a professor at the University of Utah College of Law, said that Moderna was reversing course on its public commitment that it would not enforce the patents.
"You can't just take it back because you've decided you'd like to make some more money," Contreras said.
Sherkow said Pfizer could argue that the court should hold the company to that pledge, though added there were few if any legal precedents on whether it could be enforced.
Patent litigation is not uncommon in the early stages of new technology.
Pfizer and BioNTech are already facing multiple lawsuits from other companies who say the partnership's vaccine infringes on their patents.
In Friday's statement, Moderna said Pfizer/BioNTech appropriated two types of intellectual property.
One involved an mRNA structure that Moderna says its scientists began developing in 2010 and were the first to validate in human trials in 2015.
"Pfizer and BioNTech took four different vaccine candidates into clinical testing, which included options that would have steered clear of Moderna's innovative path. Pfizer and BioNTech, however, ultimately decided to proceed with a vaccine that has the same exact mRNA chemical modification to its vaccine," Moderna said.
The second alleged infringement involves the coding of a full-length spike protein that Moderna says its scientists developed while creating a vaccine for the coronavirus that causes Middle East Respiratory Syndrome (MERS).
Although the MERS vaccine never went to market, its development helped Moderna rapidly roll out its COVID-19 vaccine.
Pfizer shares were down 2% in afternoon Friday afternoon trade, while Moderna was off 3.3%. BioNTech's American shares were down 3% after its German stock closed 1.6% lower.
(Reporting by Daniel Trotta, additional reporting by Ankur Banerjee, Mrinalika Roy and Amruta Khandekar in Bengaluru, Zuzanna Szymanska in Berlin, Brendan Pierson and Jonathan Stempel in New York; Editing by Caroline Humer, Edwina Gibbs, Howard Goller and Cynthia Osterman)