Moderna appeals to save $1.3 billion patent dispute payout, asserts U.S. government-contractor immunity

Context:

• At the height of the COVID-19 pandemic, in August 2020, the U.S. government signed a procurement contract with Moderna for its mRNA vaccine (Spikevax). It required Moderna to make at least 100 million vaccine doses for the government.
• In February 2022, nucleic acid delivery company Genevant Sciences and clinical-stage biopharmaceutical company Arbutus Biopharma Corporation sued Moderna for allegedly infringing six U.S. patents in the United States District Court for the District of Delaware, alleging that the defendant used their “revolutionary” lipid nanoparticle (LNP) delivery platform “without payment or a license”. Without this system, Moderna’s COVID-19 vaccine “would not have been successful”, they asserted. Moderna moved to dismiss the case based on the government’s contract, but the district court denied Moderna’s motion. A year later, the U.S. government filed a Statement of Interest in the District of Delaware, taking Moderna’s side (full document below box). In March 2025, Arbutus and Genevant expanded their campaign to the Federal Court of Canada, the Tokyo District Court, Switzerland’s Federal Patent Court, and the UPC’s The Hague Local Division (LD: March 4, 2025 ip fray article).
• This past March, Moderna, Arbutus, and Genevant settled their litigation related to Spikevax and mRESVIA worldwide (March 4, 2026 ip fray article). As part of it, Moderna is to make a lump sum payment of $950 million on or before July 8, 2026. The remainder of that settlement depends on what now happens in the Federal Circuit: Moderna filed an appeal (March 24, 2026), arguing that its government-contractor immunity defense limits its liability under federal statute, 28 U.S.C. § 1498¹. If this appeal succeeds, Moderna would not owe any further payments, and Arbutus and Genevant would refund all the payments. If not, it would have to pay an additional $1.3 billion within 90 days of that decision.
• On April 24, 2026, Arbutus sued the U.S. government in the Court of Federal Claims, seeking compensation for all doses sold under the 2020 procurement contract. The government’s response to this is due July 17, 2026.

What’s new: Moderna’s opening brief for its appeal case in the Federal Circuit has been made public. It is seeking to reverse the District of Delaware’s judgment, asserting that its conclusions were “deeply flawed” and alleging that it has government-contractor immunity. It also warns the Federal Circuit that the lower court’s ruling could undermine a law that was created specifically so the U.S. government’s vital supply chains wouldn’t get shut down by private patent fights.

Direct impact: The U.S. government has already requested an extension of time to respond until June 19, 2026, noting that it agrees with Moderna that for all COVID vaccines in question, this should be litigated in the Court of Federal Claims against the government. This would come with significant limitations for the patent holder compared to a district court case against a private company. The parties’ oral arguments are expected to be heard by the Federal Circuit in late 2026/early 2027. Then, Moderna will have to pay the additional $1.3 billion within 90 days of the Federal Circuit’s final decision, or walk away clean (if it wins). If the Federal Circuit rules that Section 1498 applies to some general-public doses but not others, the $1.3 billion will be pro-rated based on the exact number of vaccine doses the court leaves exposed to infringement liability.

Wider ramifications: This case will be heavily watched by the U.S. patent community, and we plan to monitor the next steps closely, as it will determine whether private companies can use government pandemic-era procurement contracts as a blanket shield against patent infringement claims. It will define the modern boundaries of Section 1498. Should the district court’s ruling stand, Moderna believes this will completely ruin the point of the law – and patentees would have been able to completely halt the government’s nationwide vaccination program back in 2020.