Arbutus v. Moderna - Expert Testimony Challenges in Patent Litigation

IN THE UNITED STAT ES D ISTRIC T COUR T FOR THE DISTRICT OF DELAWARE Case No. 1:22 -cv- 00 2 52 - JDW MEMORAN DUM Patent litigation is complicated, so expert testimony often has outsized importance to explain complicated issu es to ju ries. With any expert, there’s a performative aspect: polished ch arts; dense termi nology; head - s pinning num ber s; and c onfide nt concl usions. But an expert has to have more than vibes for a judge to admit his testimony. Undergi rding t he conf ide nce, the re mus t be subs tance. When the re’s not, the e xpert test imony is little more than aura f armi ng in the c ourtroom, proje cti ng confid ence and complexity to build cred ibility. Arbutus 1 chal lenges three of Moder na’s 2 proffered exp erts, arguing that their opin ions lack the right substance. I conclude th at Moderna’s damages 1 “Arbut us” ref ers collectiv ely to Arbutus B iopharma Corp. and Ge nevant Sci ences GmbH. Because Gen eva nt en tered in to some releva nt agr eements sepa rately fro m Arbu tus, I will at tim es in this opinion refer to it separately. 2 “Moderna” refers collective ly to Moderna, Inc. and ModernaT X, In c. ARBUTUS BIO PHARM A CORPORATI ON and GENEVANT SCIENCES GMBH, Plaintiff s, v. MODERNA, INC. and MOD ERNATX, INC., Defendan ts.

2 expert Dr. Chris topher Vellt uro uses a flawed method ology a nd there fore c annot offer his reasonable royalty opinions at trial. To the extent they are still r elevant in the wake of various summary judgment rulings that I have issued, Dr. Robert Prud’homme and Dr. Danie l Anders on can offer the ir opini ons about the reve rse doctrine of equiva lents and obvi ousn ess, resp ectiv ely. I. BACKGROUND Arbutus c laims to have deve loped lipid nanoparticle (“LNP”) t echnol ogy that allows for th e transport of fra gile nucle ic acids, suc h a s mRNA, acro ss a cell ’ s mem bran e so that they can help fight o ff foreig n viru ses. Arbut us owns two types of LNP patents. On e category of patents, referred to as the “ Molar Ratio Patents, ” 3 claims a particle co mprising a nucleic acid and t he va rious lipid s in spec ific molar ratio am ounts. The other cate gory of patents, consisting of just the ‘651 Pate nt, 4 c laims a method of developing LNPs involvi ng continuous ly and rapidl y mi x ing two solutions to form lipid vesicles that can encapsulat e nucleic ac ids. After Arbutus’s patents is sued, Moderna develo ped a nucleic - acid vaccinat ion that uses mRNA to fight the virus that causes Covid - 19. To ensure that the mRNA could sa fely cross the cellular membrane, Moderna ’s vaccine utilizes LNP technol ogy, whi ch Arbutus claims infr inges its p aten ts. 3 The Molar Ratio Patents include U.S. Patent Nos. 8,492,359; 9,364,435; and 11,141,378. 4 U.S. Patent No. 9, 504, 651.

3 Arbutus filed suit o n Febru ary 28, 2022. Most of the claims in the case have survived summary judgment. Arbutus now moves pur suant to Federal Rule of Evidence 702 and Daubert v. Merrel l Dow Pharms., Inc., 509 U.S. 579 (1993) to e xclude certain opinions offered by Moderna’s experts, Dr. Vellturo, Dr. Prud’ho mme, and Dr. Anders on. Arbutus seeks to exclude Dr. Vellturo’s reasonable royalty calculat ion. As for Dr. Prud’homm e, Arbu tus seeks to exclu de portions of his opinion rel ated to the doctrine of equival ents, reverse doctrine of equivalents, the exis tence of intermediate particles, enablement, and indefini teness. La stly, Arb utu s seeks to exc lud e Dr. Anderson ’s obvio usness opini ons. II. LEGAL STAND ARD In a patent case, r egional circu it law applie s to issues con cerning the admissibilit y of expe rt opinions. See M icro Che m., Inc. v. Le xtron, Inc., 317 F.3d 1387, 1390 – 91 (Fed. Cir. 2003). The Federal Rules of Evidence “govern[] the admissi bility of expert testimony.” Kannan keril v. Terminix Int’l., Inc., 128 F.3d 802, 806 (3d Cir. 1997). Federa l Rule o f Eviden ce 702 provides that “[a] witness who is qu alified as an expert” may testify if the expert’s testimony “will help the trier of fact to understand the evidence or to determine a fact in issue,” “the testi mony is based on sufficient facts or data,” “the tes timon y is the product of reliable principles and methods,” and “the expert’s opinion r eflect s a r eliab le application of the principl es and methods to the facts of the case.” Fed. R. Evid. 702. In other words, for an expert’s te stimony to be admissible, it must be reliable. See Elco ck v. Kmart Corp., 233 F.3d 734, 745 (3d Cir. 2000). “[S] ubjectiv e belief or u nsup port ed

4 spec ulation” is not e nough; the expe rt must have “good groun ds” for his or he r expert opinions. I d. (internal quotation marks omitted). III. ANALYSIS A. Dr. Ve llturo ’ s Damages Opi nion s Moder na offer s Dr. Vellt uro a s a damag es exp ert. A rbutus ch allenges th ree of h is opinions: his re asonable roya lty analy sis based on comparab le lic enses; his opinion a bout the ef f ect (or la ck thereof) of Arbutus’ s hold - up power in a hy pothetical negotiation; and his opi nions about avai lable non - infringing alt ernatives. 1. Reasonable roya l ty Arbutus seeks to e xclude Dr. Ve llturo’s damages opinion as to the reasonable royalty to which Arbutus would be entitled if the j ury finds infringe ment. A reaso nabl e royalty is typically “based upon a hypothetical negotiation betwe en the patentee and the infrin ger when the infri ngemen t bega n.” Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 517 (Fed. Cir. 1995). One m ethod for determi ni ng a reasonable roy alt y is called th e mar ket appro ach, which values a hypoth etical licens e based on comparable licenses betw een unrelated parties. See Willi s Ele ctric Co. v. Pol ygrou p Ltd., Case No. 2024 - 2118, 2026 WL 438657, at *1 4 (Fed. Cir. Feb. 17, 2026). O f course, a ny reasonable royal ty analysis “nece ssar ily invol ves an element of app roximat ion and unce rtainty.” EcoFact or, Inc. v. Google, L LC, 137 F.4 th 1333, 1340 (in ternal quotation marks omitted). Indeed, “[a] marke t appro ach does n ot requi re perfect i dentity b etween licens ed and a sserted patents.” Willis

5 Electric Co., 2026 WL 438657, at * 14. Nonetheless, “given the great financial incentive parties have to exploit the inherent im precision in patent valuati o n, courts must be proactive to ensure that the testimony presented — using what ever me thodology — is sufficiently reliable to support a damages award.” Commonw ealth Sci. & Indus. Rs ch. Organisation v. Cisco Sys., Inc., 809 F.3d 1295, 1301 (Fed. Cir. 2015). “When the methodol ogy is sound, and the ev idenc e relied up on suff icient ly related to the ca se at hand, disputes abo ut the deg ree of rel evance or accuracy ... may go to the testimony’s weight, ... not its admissibility.” i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 852 (Fed. Cir. 2010). Dr. Vel lturo’s reasonabl e royalty opini on suffers from a fat al fl aw — he u ses Moderna’s sales of the Covid - 19 vaccine in his assessment o f com parable licen se agreements. Dr. Vel lturo’s analysis focuses on 13 license agreements that Genevant entered and that cover the Asserted Patents, at least in part. Those agreements do not have a single running royalty rate, how ever. Each of them includ es lump sum miles tone payments and then tiers of royal ty rates that ap ply for marginal sales trigge r s. 5 For each 5 Arbutus argues that the Federal Circuit’s decision in EcoFact or, Inc. v. Googl e LLC, 137 F.4th 1333 (Fed. Cir. 2025), bars Dr. Vell turo from relying on those agreements. I dis agr ee. In EcoFactor, the a greements at is sue wer e lump sum agr eemen ts, and an expert proposed to use them as evidence of an arms’ - length agreement of a royalty rate because each agreement included a “whereas” clause that indicated that EcoFactor deemed a certa in running roy a lty to be reasonable. The Federal Circuit held that, as a matter of contract interpretation, the nonbinding recital did not indicate agreement on the royal ty rate, particularly because two of the agreements disclaimed the royalty rate. In this case,

6 agreement, Dr. Vellturo attempts to determine an implied running royalty rate. He does so by determining the total payments that Genevant would have received under each agreemen t, including both milestone payments and royalty payments. He calculates the royalty payments by assuming that the sales levels would have been equal to the lev els that Moderna achieved for its Covid - 19 v accine and calculates the royalty paym ents accordin gly. He th en divides the total revenue by the total sales of Moderna’s Covid - 19 vaccine to calculate a royalty rate for each agreement. The problem with Dr. Vellturo’s analysis is that the various royalty rates that h e assigned to each comparable agreement are made up and not tethere d to those license agreemen ts. As one court has expla ined, it is “mere speculation masquerading as quantitative analysis.” Balti more Aircoil Co., Inc. v. SPX Cooling Te c h., Inc., Civ. No. CCB - 13 - 2053, 2016 WL 4426681, at * 25 (D. Md. Aug. 22, 2016). When Dr. V ellturo set out to convert the various pa yments under each agree ment to a single royalty rate, his tas k was to figur e out the rate to which Genevant and its counterparty impliedly agreed during arms’ - length n egotiations. T o do that, Dr. Vell turo had to use data connected in some way to the agreement that he was an alyzing, e ither the actual sales numbers under that agreement or the parties’ expected sales at the time that they entered into the agreement. Dr. Vellturo did neither. He substituted Moderna’s sales for it s Co vid - 19 vaccine, which in contra s t, Dr. Vellturo relies on agree ments that Geneva nt entered with third parties tha t includ e runn ing r oyalties. The agreem ents therefo re pro vide evid ence o f the ter ms to which a will ing lic ensor an d willing l icensee ag reed.

7 have no co nnection to t hose othe r negotia tions becaus e no one has s uggested tha t Genevant negotiated a n y of the other agreem ents with an expectation of sal es that would come anywhere close to the sales that Moderna achieved (or even for the sales that ever yone might have anticipated as of the date of the hy pothetical negotiation). Dr. Vellturo’s analysis has the effect, at a minimum, of amortizing the lump sum royalty over a much larger sales base, which drives down th e average royalty rate that one might i mpl y under each ag reement. 6 Moderna doesn’t try to hide what Dr. Vellturo did. A s it explains, he “accounted for bot h non - ru nning royalt ies (i.e., upfro nt an d milestone paym ents) an d all app licable tier s of running roy alties to d eter mine what Moderna w ould hav e paid under the terms of each Comparable Agreem ent.” (D.I. 662 at 5 (emphasis in original).) That’s jus t the wrong analysis, though. The question is not what Moderna would have paid under a comparable lice nse agreement. T he questi on i s the rate, either expre ss or implied, to whi ch Gene vant and its counterparty agr eed. Dr. Vellturo didn’t analyze that rate, so his reasonable royalty rate is the refore inad missible. 6 It’s not clear to me what effect Dr. Vel lturo’s use of Moderna’s sales has on the overall payme nts running royal ties (i.e., does it driv e them up or down), but it doesn’t matter. Even if it offset s all o r par t of th e errors w ith the lum p sum mi l estone payments, the point is not to ha ve the mistakes come out in the wash. T he facts on which an expert relies in analyzing a supposedly comparable agreement must tie to that agreement.

8 2. Hold - up Dr. Vel lturo opines ab out the s ignif icanc e of the time pressure on Moderna at the time of the hy pothetical ne gotiation (or t he lack of its significanc e). Arbutus argue s that Dr. Vel lturo’s opinion i s that the j ury ca nnot consi der that inform ati on. I don’t read hi s opinion t hat way, th ough. Dr. Vell turo opines t hat the time pres sure wasn’t a significant factor in the hypothetical negotiation and that it therefore wouldn’t have influenced the hypothetical negotiati on. (E.g., D.I. 663 - 1 at 165.) He ca n offe r that o pinion. T o the exte nt Moderna strays from that opinion and tr ies to have him suggest that the jury canno t consid er the time pre ssure i n its own ass e ssment of the hypothe tical negot iation, I will deal with those specific questions at trial. 3. Non - infrin gin g alter natives Dr. Vel lturo’s analy sis of non - infringing alternatives aris e s in the con text of his analys is of compa rable li cens es, whic h he opines would ad dres s the value of the inventi on over prior te chnologies. (D.I. 663 - 1 at 86. 7) However, I w ill not permi t Dr. Vel lturo to presen t his a nalysi s of tho se license agr eeme nts. Therefore, he wil l have no occ asion to opine on thi s issue, a nd I will exc lude the opinions. 7 Paragraph 190 on page 86 of Dr. Vellturo’s Rebuttal Report is the only paragraph o f his reports that Moderna identifie s a s addressing the issue, (D.I. 662 at 12) so I assum e it’ s the only one where he does. L itiga tion is not a t ruffl e hunt, so if it ’s some where e lse to which M oderna has not pointed m e, I have not see n it.

9 B. Dr. Prud’homme’s Infri ngement Opinion s Arbutus moves to exclud e vari ous porti ons of Dr. Prud’homm e’s inf ringem ent opinio ns, specificall y tho se related to the do ctrine of equivalents, re verse doctrine of equivalents, the ex iste nce o f int ermediat e par ticles, enabl ement, a nd in definiten ess. A fter it filed and brief ed the motion, I resolved the Parties’ summary judgme nt motions. I n the proces s of doing so, I ruled on the adm i ssib ility of some of Dr. Prud’homm e’s op inions. For starters, I granted summary judgment for Mode rna on Arbutus’s doctri ne - of - equivalents infringement t heorie s, barri ng Arbutus f rom raising s uch theories. Thus, Dr. Prud’homme will not have to opine o n the do ctrine of eq uivale nts, so I wil l deny as moot Arbutus’s request to exclude this testi mony. I also rul ed on the admissibility of Dr. Prud’homme’s opinions related to indefini teness an d ena blement. The arguments in th is Motion repeat the arguments Arbutus already made. Not hing has chang ed, thoug h. So, for the re asons I’ve already given, I will deny Ar butus’s request to exclude Dr. Prud’homme’s indefiniteness and enable ment opinions. Arbutus also argues that I should e xclude Dr. Prud’h omme’s opinions about intermediate particl es. But this argument is just an e xtension of Arbutus’s pre vious argument during summary judgment briefing that Dr. Prud’homme’s opinions read unclaimed properties into the asserte d claims. I rejected that argument, explaining that

10 Arbutus misreads Dr. Prud’homm e’s op inion. 8 (D.I. 743 at 13 – 14.) Arbutus makes the same mistake again by interpreting Dr. Prud’homme’s opinion to “’read[] a limitation’ into the claims.” (D.I. 663 at 19.) Dr. Prud’homme does no such thing. Rat h er, he references the in - process part icl es when disc ussing the short duration of time (less than a m inute) t hat they would exist in c omparison to the total length of time the manufacturing process takes (over a week). (See, e. g., D.I. 663 - 21 at 37 6– 78.) This opinion i s relevant to the purp orted value of the patents, so I need not exclude it. The onl y n ovel part of the challenge that A rbutus makes to Dr. Prud’homme’s opinion s concer ns the rever se doc trine o f equiva lents. A rbutus argues that Dr. Prud’homme bas ed t his opi nion on “ unclaimed featur es,” which “com pletely mi sconstru es the RDOE inquiry.” (D.I. 663 at 19 (alterations accepted).) Bu t Dr. Prud’ho mme only consider ed uncla imed fea tures a fter “a ssuming Moderna’s [Covid - 19] vaccine litera lly” infrin ged. (D.I. 663 - 21 at 471.) In other wor ds, Dr. Prud’ homme d id not import uncla imed features into the patent. Rather, he cites tho se features in an attempt to show th at Moderna’s Covid - 19 vaccine literally infringes b ut “ha s been so far chan ged in pr inciple 8 As I noted in my previous opini on, Arbutus’s ar gument t hat Dr. Pr ud’homme imports a stability re quirement into the asserted claim take s his opinion out of c ontext. (D.I. 7 43 a t 13 – 14.) Dr. Prud’homme appears to have onl y ma de suc h arguments in res ponse to prior arguments made by Arbutus. (D.I. 743 at 14.) Moderna affirmed that it would “not presen t any so - called ‘uncla imed prop erties’ if [Arb utus] stan d[s] by [its] p osition t hat such properties are not required by the claims.” (D.I. 557 at 17.) I will take Moderna at its word. If Moderna backtracks and see ks to introduce testimony from Dr. Prud ’homme g oing beyond what it has claimed, Arbutus may renew i ts request to exclude his testimony.

11 that it performs the same or similar function in a substantially different way.” SRI Intern. V. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1124 (Fed. Cir. 1985). W hether R DOE applies in th is ca se is a question of fact for the jury to decide. Id. Therefor e, I will not exclude Dr. Prud’homme’s RD OE opinion. 9 C. Dr. Anderson ’s Obviousness O pin i on s Arbutus moves to exc lude Dr. Ande rson’s opini on related to whether the M olar Ratio Patents and the ‘651 Patent were obvious in li ght of prior art. In a prior de cision, I held that collateral estoppel bars Moderna from arguing that (a) it wo uld have been routine f or a POSA to optimize the lipid par ticle for mulatio ns in the p rior ar t to mat ch th e claimed molar r atios or (b) prior art taught a phospholipid range that overlaps wi th the claimed ranges in the Molar Ratio Patents. (See D.I. 743 at 8 – 11.) B eca use th ose i ssues are no longe r in the cas e, the motion t o exclude D r. Ande rson’s obvi ousnes s opinions regarding the Molar Ratio Patents are m oot. As to the ‘651 Patent, Arbutus bases its argument on Dr. Anderson’s deposition testimony that he anal yzed the various patents t hrough the “ lens ” of the patents in s uit. 9 Whil e it is true, as Arbutus points out, that the Federal Circuit has described RDO E as an “anach ronistic excepti on ” to infringem ent, the Federal Circuit has never declared that it no longer e xists. Steube n Foods, Inc. v. S hibuya Hoppm ann Corp., 127 F. 4th 348, 356 – 57 (Fed. Cir. 2025). T o the extent Arbutus argues that I should exclude Dr. Prud’homme’s RDOE opi nion because RDOE is an “exception” that is rarely applied, I am not per suad ed. Just because a doctrine is unusual or a pplie s only rarely is not a basis to exclude an expert opinion o n it. Arbutus did not move f or summary judgment on the is sue, so it re mains in the case, and a jury may decide that this is the r are instan ce in which it s applicatio n is appropriate.

12 (E.g., D.I 663 - 23 at 126.) Certainly, Arbutus is corre ct that Dr. Ande rson cannot rely on the ‘651 Patent or the hindsight that i t provide s to establ ish obvious ness. See Univ. of Strathclyde v. Clear - Vu Lighting, LLC, 17 F.4th 155, 165 (Fed. Cir. 202 1). However, I don’ t read Dr. Anderson’s testimony that way. Instead, I read it, con si stent with the disclosures in his expert report, to reveal that Dr. Anderson looked at the ‘651 Patent to dete rmine the level of specificit y (or generality) in its di sclosures. He then conducted his obvi ousness analysis at that sam e level of specificit y. But there’s n othing in the record suggesting that Dr. Anders on used the ‘651 Patent’s teachings to inf orm his obviousne ss analysis. In its Mot ion, Arbut us makes much of the fac t that during his de positi on Dr. Anderson could not remember the details of various prior art references that he ci te s in his re port. Tha t’s true. Dr. Ander son coul dn’t s eem to reme mb er much d uring his deposition. May be those memory l apses were benign, or may be t hey wer e by de sign. But they a re not enoug h for me to exc lude his opini ons. The expe rt reports that he iss ued disclose his opinions. The fact that he couldn’t remember details at a deposition doesn’t under mine th at disclosure. Instead, it provides fodder for cross - examinatio n. I will theref ore not exclude Dr. Anderson’ s obviou sness opi nions as they re late to the ‘65 1 Patent. IV. CONCLUSI ON Dr. Vel lturo’s reasonabl e royalty opini on uses an unrelia ble method ology, so I will excl ude it. He can, howeve r, opine about the economic sign ifican ce of time pressur e. Dr.

13 Prud’h omme’ s RDO E opinion and Dr. And ers on’s opinion a bout the obviousnes s of the ‘651 Patent are reliable opinions that the jury can hear. An appropriate O rder follows. BY THE COUR T: /s/ Jos hua D. Wolson JOSHU A D. WOL SON, J. February 24, 202 6

IN THE UNITED STATES DIS TRICT COUR T FOR THE DISTRICT OF DELAWARE Case No. 1:22 -cv- 00 2 52 - JDW ORDER AND NOW, th is 2 4th day o f February, 202 6, upon consi derati on of Plaintif fs ’ Motion To Ex clude Expert Tes timony (D.I. 657) an d for the reason s stated in the accompanying Memorandum, it is ORDERED that the Motion is GRANT ED IN PART an d DENIED IN P ART. The Motion is G RANTE D as to (a) Plaintif fs ’ r equest t o e xclude Dr. Vellturo’ s reasonable royalty o pinion and (b) Plaintiffs’ request to exclude Dr. Vell tu ro’s opinion o n n on - infringing alternatives. T he Motion is DENIED in all other respect s. BY THE COURT: /s/ Jos hua D. Wolson JOSHU A D. WOL SON, J. ARBUTUS BIO PHARM A CORPORATI ON and GENEVANT SCIENCES GMBH, Plaintiff s, v. MODERNA, INC. and MOD ERNATX, INC., Defendan t s.