Pfizer Inc & Anor v Modernatx Inc

To determine whether there is a unilateral contract under Massachusetts law, I must first make findings as to relevant aspects of Massachusetts contract law and then apply that law to the facts of this case.

When ascertaining relevant principles of Massachusetts law, I will decide how the highest court in Massachusetts would determine matters in dispute today (see for example, [106] of the judgment of Cockerill J in Deutsche Bank AG London v Comune di Busto Arsizio [2021] EWHC 2706 (Comm)). Previous authorities are, of course, relevant to that question.

The parties helpfully prepared a statement setting out those principles of US federal law and Massachusetts law on which they agreed, and those that were in dispute (the “Joint Statement”). Paragraphs 85 to 92 below set out agreed propositions of Massachusetts state law that will put my analysis on the unilateral contract issue into context.

There is no single body of “United States law”. Rather, the laws applicable in the United States comprise federal law, which applies equally throughout the United States, and state law which applies only in the relevant state. Contract law is regulated by each individual state’s law.

That said, contract law in the United States is broadly uniform (but not identical) across the various states and is periodically summarised in restatements published by the American Law Institute. The first such restatement (the “Restatement (First)”) was published in 1932. The second such restatement (the “Restatement (Second)”) was published in 1981.

Massachusetts contract law is not codified in any statute but rather, to the extent relevant to the issues arising in this case, is set out in case law. The relevant courts in which binding principles of Massachusetts contract law are formulated are the Supreme Judicial Court (the highest court of appeal in Massachusetts) and the Appeals Court (the lower appellate court in Massachusetts). In some instances, trial court judges at first instance issue written opinions but these opinions are persuasive only and not binding authority.

Judgments of the Supreme Judicial Court are binding both on the Appeals Court and on first instance courts in Massachusetts. Judgments of the Appeals Court are binding on first instance courts. The Supreme Judicial Court is not bound by its own decisions and is free to depart from them. In deciding whether to depart from a previous decision on a matter of contract law, the Supreme Judicial Court will treat the Restatement (Second) as a highly persuasive commentary. Therefore, although the Restatement (Second) cannot “overrule” a judgment of the Supreme Judicial Court, it is entirely possible that the Supreme Judicial Court could conclude that Massachusetts contract law is correctly stated in the Restatement (Second) rather than in previous decisions of the Supreme Judicial Court.

The parties are not agreed on the extent to which the Restatement (First) is also a highly persuasive source of Massachusetts contract law on a par with the Restatement (Second).

For there to be a contract in Massachusetts law, there must be i) offer, ii) acceptance and iii) consideration. Massachusetts law does not require the presence of a further ingredient that will be familiar to English contract lawyers, namely an “intention to create legal relations” as a separate freestanding requirement. However, the combination of offer and acceptance require an objective manifestation of the parties’ mutual assent to the exchange (i.e. a mutual assent to be bound).

Paragraph 11.5 of the Joint Statement recorded the experts’ agreement that the existence of the basic elements of contract formation is assessed objectively (i.e. by reference to what a reasonable person in the position of the other party would conclude its counterparty’s objective manifestations to mean), without reference to the parties’ subjective intent. However, as will be seen, Mr Murray’s expert report referred to a debate in Massachusetts law as to whether subjective intent could be relevant in some cases when deciding whether a person has accepted an offer of a unilateral contract, or has given consideration to a promisor under a unilateral contract. Chief Justice Ireland’s expert report did not allude to this potential debate. Therefore, it was clear from the way the experts’ evidence unfolded that they were not as agreed on this matter as paragraph 11.5 might suggest.

In principle, Massachusetts law permits the formation of unilateral contracts. Such a contract can be formed where an offeror promises a specified result if an offeree performs a specified act and the offeree both accepts the offer and furnishes consideration by taking the specified action with knowledge of the offer. However, if an offeree has manifested an objective intention not to accept such an offer of a unilateral contract (to which the experts referred as “disclaimer”), there will be deemed to have been no contract from the outset, even if the offeree has already performed the specified act in full.

I have in mind the entirety of the Joint Statement but the summary in paragraphs 85 to 92 should not be read as an attempt to summarise the entirety of the Joint Statement or all relevant aspects of Massachusetts contract law. Moreover, the expert reports of Chief Justice Ireland and Mr Murray revealed a disagreement on a number of matters of detail relating to applicable principles of Massachusetts contract law. There is no utility in me summarising all those points of disagreement. Rather, I set out the areas in which the parties disagreed on matters of Massachusetts contract law as pursued in their closing submissions which were as follows:

The parties’ pleadings and the reports of their experts revealed some disagreements on principles of Massachusetts contract law relating to “offer”. For example, Chief Justice Ireland and Mr Murray were not agreed on the effect of a purported offer being uncertain, vague or indefinite on essential or material terms. Chief Justice Ireland’s position was that only reasonable certainty of terms was needed to make such an offer capable of acceptance so as to form a contract. Mr Murray’s position was that such defects in a purported offer meant that it was incapable of forming the basis of a binding contract.

Chief Justice Ireland and Mr Murray also disagreed on when an offer could be revoked. Chief Justice Ireland’s position was that where an offer was to be accepted by performance, that offer could not be revoked once performance had started. Mr Murray’s position was that an offer could be revoked at any time before full performance.

However, these areas of disagreement did not form the basis of extensive cross-examination and I do not, accordingly, feel equipped to resolve them. I proceed, therefore, on the basis of those propositions on the concept of “offer” on which the experts were agreed as set out in the Joint Statement. One such agreed proposition, set out at 13.4 of the Joint Statement is that there is no offer if a court determines that the language of a statement was not objectively intended to constitute an offer because, for example, it contains an effective disclaimer of an intention to be legally bound.

I have set out in paragraphs 46 to 57 what I consider to be the objective meaning of the “forward-looking statements” in the Pledge. In my judgment, those statements are inconsistent with an objective intention that Moderna be bound by a contractual promise not to enforce patents during the pandemic period.

As I have explained in paragraph 51, those forward-looking statements do not simply state that Moderna reserves the right to change its mind in the future. They go further by explaining that the statements of Moderna’s stance on enforcement of its intellectual property “are neither promises nor guarantees” and a reader should not place “undue reliance” on them.

That, in my judgment is inconsistent with any objective intention to make an “offer” that readers could accept by performance. The forward-looking statements do not simply reserve a right to revoke an offer, while remaining bound to any person who has accepted the offer prior to revocation. Rather, read as a whole, the Pledge manifests an objective intention to make no offer at all.

I am only reinforced in that conclusion by the uncertainty I have identified in the definition of the “pandemic period”. I will not resolve the difference of opinion between Chief Justice Ireland and Mr Murray as to whether the presence of such uncertainty is necessarily fatal to the existence of an offer. However, Chief Justice Ireland accepted in cross-examination that Section 33 of the Restatement (Second) correctly stated Massachusetts law when explaining that the fact that one or more terms of a proposed bargain are left open or uncertain may show that there is no manifestation of intention to make an offer. The absence of certainty on the duration of the promise said to be contained in the Pledge militates against the Pledge constituting an “offer” that could itself be accepted.

There was, therefore, no “offer” that was capable of being accepted. However, I have heard extensive argument on matters of Massachusetts law going to “acceptance” and “consideration”. Therefore, in the remainder of Part B I proceed on the basis that contrary to my conclusion, Moderna did make an offer. If there was such an offer, the parties were not agreed on what specified act needed to be performed in order to accept it. In its closing submissions, Moderna submitted that the specified act of acceptance did not extend to making vaccines intended to combat the COVID-19 pandemic by a person already engaged in making those vaccines.

I do not accept that submission. If there was an offer, the act that Moderna specified as constituting acceptance was “making vaccines intended to combat the pandemic”. The Pledge does not contain any exclusion by reference to acts of vaccine manufacture that were going to be performed anyway. Moreover, as I have explained in paragraph 34, the Pledge itself acknowledges awareness that there were already “COVID-19 vaccines in development” such as those being developed by Pfizer/BioNTech. A reasonable reader would not, therefore, read the Pledge as excluding Pfizer/BioNTech from performing the designated act of acceptance by reference to those vaccines. Therefore, in the remainder of this section, I proceed on the basis that if there were an offer in the Pledge, it could be accepted by the act of “making vaccines intended to combat the pandemic”.

The evidence of Chief Justice Ireland was forthright. At paragraph 6.12 of his expert report, he stated that:

Massachusetts courts will not enquire into the offeree’s motives for accepting the offer by performance. Performance of the act with knowledge of the offer is sufficient to form an enforceable contract. The test is a simple enquiry of fact to establish – yes or no – whether the offeree knew of the offer.

In the same paragraph, he quoted an example from Section 53 of the Restatement (Second) to support that conclusion. That quoted example was of a situation where A offers a reward for information leading to conviction of a criminal. B, a friend of the criminal, knows of the reward and gives the information voluntarily. The Restatement (Second) states that B is entitled to the reward even though he acts because he thinks he is about to die and wants both to ease his conscience and to revenge himself for a beating received from the criminal.

I agree with Mr Murray that Chief Justice Ireland’s forthright opinion paid insufficient regard to the requirement that, for a contract to be formed, there must be a “bargain in which there is a manifestation of mutual assent to the exchange” (see Section 17 of the Restatement (Second)). Section 23 of the Restatement (Second) makes the point that “It is essential to a bargain that each party manifest assent with reference to the manifestation of the other”. Comment a. to this principle emphasises that “Two manifestations of willingness to make a bargain, though having the same terms, do not constitute a bargain unless each is made with reference to the other”.

Chief Justice Ireland’s position in cross-examination was that Section 53 of the Restatement (Second) explained that, where an offer of a unilateral contract was accepted by performance, the offeree would provide its “manifestation” of a willingness to make a bargain by reference to the offer simply by performing the stipulated act with knowledge of the offer. However, in my judgment, this opinion gave insufficient weight to matters referred to within Section 53 itself which indicated that the position is more nuanced. Section 53(1) articulates the general rule that an offer of a unilateral contract can be accepted by the rendering of a performance. However, it sets out two exceptions to that rule including, relevantly, Section 53(3):

Where an offer of a promise invites acceptance by performance and does not invite a promissory acceptance, the rendering of the invited performance does not constitute an acceptance if before the offeror performs his promise, the offeree manifests an intention not to accept.

That introduces the possibility that, in appropriate cases, performance of the act with knowledge of the offer is not enough to constitute acceptance if there is otherwise some manifestation of an intention not to accept. Note b. to Section 53 makes that point expressly with further amplification coming from Note c. which reads as follows:

Where no promise by the offeree is contemplated, there is no problem of justifiable reliance by the offeror… The offeree’s conduct ordinarily constitutes an acceptance in such cases only if he knows of the offer. His rendering of the invited performance with knowledge of the offer is a sufficient manifestation of assent, and enquiry into his motives is unnecessary. But the meaning of a non-verbal conduct is even more dependent on its setting than the meaning of words… The words or conduct of the offeree may show that he acts gratuitously or otherwise without reference to the offer. There is then no bargain. See Section 23.

Moreover, while Chief Justice Ireland quoted one of the illustrations discussed in the commentary on Section 53, he did not mention the second. That illustration was in all material respects identical to that discussed in paragraph 104 above except that in that case, B is interrogated by the police and threatened with an arrest as an accomplice of the criminal (A). During the interrogation, without any mention of the reward, B is tricked into giving the information to clear himself. The conclusion of that illustration is that B is not entitled to the reward. In closing submissions, Pfizer/BioNTech suggested that this conclusion is unremarkable as the facts of the example are based on Vitty v. Eley 51 A.D. 44 (1900), a judgment of the Supreme Court of New York, the ratio of which was that involuntary acts do not amount to acceptance of a unilateral offer. That may be right, but the fact that Chief Justice Ireland did not address this example in his expert report, or explain why it was compatible with his approach summarised in paragraph 103, added to my impression that his expert report did not address some important matters.

I therefore conclude that Chief Justice Ireland’s expert report omitted important issues of nuance concerning what precisely is necessary to constitute acceptance of a unilateral offer. By contrast, Mr Murray’s expert report dealt with these matters of nuance in considerable detail. In my judgment, that provides a strong suggestion that Mr Murray’s conclusions on the issue of “acceptance” should be preferred to those of Chief Justice Ireland.

Mr Murray said that his expert opinion on the relevant matter is properly captured in the following extract from Williston on Contracts, one of the most influential treatises on contract law in the United States, in its July 2023 update:

If an offeree in response to a bilateral offer said, “I accept your offer,” the offeree would not thereafter be allowed to say that those words were not an acceptance because the offeree did not subjectively intend to accept the offer. By contrast, when an act is requested by the offeror and performed by the offeree, it may be shown that the performance of the act was not done with an intent to indicate assent to the offer. Even though the offeree knows of the offer, it may, if it chooses, do the act requested and still refuse to accept the offer. Thus, if an offeror offers a reward to any person who finds the offeror’s watch, the finder may return the watch, yet affirmatively decline the offered reward. And even if the offeree makes no express disclaimer, the finding and return of the watch is an ambiguous act; it may mean that the offeree assents to the offer or merely that the offeree is honest and is returning the property but does not desire a reward. If, in a particular case, it indicates assent to the offer, there is a contract; but it may be evident, from all of the facts and circumstances surrounding the return of the watch, that the act did not mean assent to the offer in which case there is no contract. Thus, it may be said that when the offeree’s outward manifestations are ambiguous or unclear and particularly when they take the form of conduct, an enquiry into the subjective intent, as well as into all of the other circumstances surrounding the outward manifestation, is appropriate.

In cross-examination, it was put to Mr Murray that matters relating to the formation of contracts had to be determined objectively. In answering those questions, Mr Murray frequently commented on the difficulty of seeing into people’s minds. He accepted that the “manifestation of assent” that is essential to a bargain (see Section 23 of the Restatement (Second)) is concerned with a “manifestation” and not with “enquiring or seeking to open windows into men’s souls” as Mr Bloch KC put it. However, I did not take him to depart significantly from the statement that I have set out in paragraph 110. His point, as I understood it, was that the only way one could ever make determinations about the subjective thoughts of another person would be by considering their acts and words as being the outward manifestations of those thoughts.

Mr Murray explained that there is an ongoing debate in the contract law of US states, including Massachusetts, having its origin in a debate between two great American contract scholars of the 20^th century: Arthur Corbin of Yale and Samuel Williston of Harvard. Under the “traditional” (Williston-esque) view an offeree of a unilateral contract had to show that the act or forbearance was given with the intent of accepting the offer (see Section 55 of the Restatement (First)). Evidence of an offeree’s subjective intention is, under the “traditional” view both relevant and admissible. Under the “modern” (Corbin-esque) view under which an objective theory of contract formation predominates, an offeree’s subjective intention is not relevant. Rather, an offeree’s intent to accept is presumed from performance of the specified act in the absence of words or deeds to the contrary.

Mr Murray said in his expert report that it is not clear whether the Massachusetts Supreme Judicial Court would adopt the “modern view” or the “traditional” view. Having heard the cross-examination of both experts, I have concluded that the Massachusetts Supreme Judicial Court would adopt the position summarised in paragraph ‎110 That represents something of a synthesis between the modern and traditional views since it focuses in the first instance on objective manifestations which are capable of setting up a presumption to the effect that performance of the act with knowledge of the offer constitutes acceptance while leaving open the possibility of considering subjective intent in cases of doubt. I note that Mr Murray was asked some leading questions in re-examination on the paragraph from Williston on Contracts which I quote in paragraph 110. However, that has not altered my conclusion since Mr Murray had referred with approval to the paragraph in his expert report in any event.

I am fortified in my preference of Mr Murray’s evidence in this regard by the fact that Chief Justice Ireland accepted in cross-examination that there would be no acceptance of an offer of a unilateral contract “where the offeree acts without reference to the offer”. In closing, Pfizer/BioNTech sought to downplay this, and other occasions on which Chief Justice Ireland accepted propositions put to him, on the ground that the question put had not addressed the matter of the rebuttable presumption. I am unable to accept that. Chief Justice Ireland had not, in his expert report, expressed the view that performance of a stipulated act, with knowledge of an offer, simply set up a rebuttable presumption of acceptance. His position was that this would necessarily amount to acceptance. It was that position that was explored in cross-examination and it was significant, in my judgment, that he did not mount a robust defence of it.

That still leaves a question on the burden of proof namely, if the presumption is engaged, an offeree has the burden of proving that it should not be rebutted or the offeror has the burden of proving that it should be. Chief Justice Ireland’s approach did not require this issue to be addressed and so his expert report said nothing about it. Mr Murray did not express a concluded view on this issue in his expert report saying that the question “does not appear to be settled” as a matter of Massachusetts law”. In his cross-examination Mr Murray said that he did not know where the burden of proof lay saying that the question was “beyond my pay grade almost”.

In another passage of cross-examination, he accepted that performance of the act created a rebuttable presumption of acceptance and said that “the offeror can come back and show … the act was gratuitous or was not in reference to the offer”. That is perhaps suggestive of the offeror having the burden of proof, but it can also be interpreted as simply confirming that an offeror could seek to rebut the presumption if it wished to. Absent a clear retraction of the view set out in his expert report, I conclude that the incidence of the burden of proof is unclear as a matter of Massachusetts law.

Finally, I address the question of the nature of an intention that is capable of displacing the presumption. This matter was explored with Mr Murray in cross-examination. I took Mr Murray to accept that, if an offeree knew of the offer, thought it was a “good thing” from its perspective and so looked upon it positively when performing the “specified act” then the presumption of acceptance would not be rebutted even if the offeree had other motives for accepting the offer. I accept that to be Mr Murray’s opinion on the evaluation of a hypothetical set of facts that was put to him. However, I do not consider his opinion was based on any proposition of Massachusetts law to the effect that the presumption is incapable of being rebutted whenever any offeree performs a specified act considering it to be a “good thing”.

It will be observed that I have reached the conclusions set out above without myself quoting any extracts from the numerous authorities that were set out in the expert reports of Chief Justice Ireland and of Mr Murray. Both sides also referred to authorities in their closing submissions. Inevitably, Pfizer/BioNTech referred to authorities such as Industrial America v Fulton Industries 285 A2.d 412 (1971) which emphasised the relatively greater significance of objective manifestation over subjective intent in considering whether a unilateral contract has been formed by performance of a stipulated act. For its part, Moderna emphasised quotes from cases such as Cottage Street Methodist Episcopal Church v Kendall 121 Mass. 528 (1877) which, in referring to the requirement for a promisee, under a unilateral contract to perform the stipulated act “upon the faith of the promise”, can be read as emphasising the importance of a subjective intention to accept.

Given that the authorities do not speak with one voice and given that there is evidence of a debate in US contract law between the “traditional” and “modern” approaches, I have concluded that there would be little to be gained from me performing my own exegesis of passages in the numerous authorities referred to. Rather, I consider that my conclusion should be substantially informed by the expert opinion from which I have benefited which was itself tested by reference to authorities in cross-examination. It is that expert opinion that has guided me to the conclusions expressed in this section.

The act of acceptance specified in any offer constituted by the Pledge was “making vaccines intended to combat the pandemic” (see paragraph 102 above). Pfizer/BioNTech performed that act with knowledge of the Pledge. That sets up a presumption that it accepted Moderna’s offer.

Pfizer/BioNTech’s position in closing was that, since it had the benefit of a presumption in its favour, it did not need to establish anything further. Rather, it was for Moderna to displace the presumption. Pfizer/BioNTech argue that Moderna has made no attempt to advance a case that the presumption should be rebutted in its pleadings. Indeed, given Mr Murray’s conclusion that the presumption would be intact even if Pfizer/BioNTech simply thought that the Pledge was a “good thing” and knew about it when it was manufacturing vaccines, Pfizer/BioNTech argued that it was difficult to see any rational basis on which the presumption could be rebutted.

I do not accept that analysis. Pfizer/BioNTech’s position as set out in both its pleadings and Chief Justice Ireland’s expert report was that simply by making vaccines intended to combat the pandemic, Pfizer/BioNTech had necessarily accepted Moderna’s offer. I have not accepted that to be the case, concluding that there is more to acceptance than this. Given that Pfizer/BioNTech’s pleaded case did not rely on any presumption established in their favour, I do not consider that Moderna can be criticised for not articulating a basis on which the presumption could be rebutted.

In any event, in my judgment the presumption is clearly rebutted irrespective of where the burden of proof on this issue lies. Pfizer/BioNTech’s act in making vaccines to combat the pandemic was inherently ambiguous, just as the act referred to in the extract from Williston on Contracts of a person returning the lost watch. That ambiguity follows not from Pfizer/BioNTech’s subjective intent, but rather from the fact that anyone seeing the act averred to be acceptance of Moderna’s offer would know that Pfizer/BioNTech were already engaged in making vaccines, and had signed contracts for the delivery of such vaccines, even before Moderna made its offer. Given that ambiguity, further analysis is required of whether Pfizer/BioNTech were manifesting assent to Moderna’s offer.

Even if that further analysis is performed entirely by reference to objective matters, it is clear that Pfizer/BioNTech were not manifesting assent to Moderna’s offer. It was making vaccines that it would have made anyway both because it was, quite independently of the Pledge, in its commercial interests to do so and because it had signed contracts for the delivery of those vaccines.

Pfizer/BioNTech’s admission that I have set out in paragraph 14 is, in my judgment, inconsistent with having any subjective intent to manifest assent to Moderna’s offer by manufacturing COVID-19 vaccines. Accordingly, even if it were necessary to examine Pfizer/BioNTech’s subjective beliefs, that examination would result in the presumption being displaced. I do not accept Pfizer/BioNTech’s submission that the presumption is incapable of being rebutted on the basis that they must have considered the Pledge to be a “good thing” at the very least, so that Mr Murray’s opinion summarised in paragraph 117 is engaged. As I have explained, that was Mr Murray’s view on an approach to a hypothetical set of facts rather than an opinion on Massachusetts law.

Pfizer/BioNTech did not accept any offer that Moderna made in the Pledge.

Both parties’ experts accepted that the issues relevant to “consideration” were largely identical to those relevant to “acceptance”. That is scarcely surprising given that Section 50(2) of the Restatement (Second) says that, in cases where an offer invites acceptance by performance “… the act requested and performed as consideration for the offeror’s promise ordinarily also constitutes acceptance”.

Accordingly, Chief Justice Ireland’s opinion on the need or otherwise for performance of the specified act to be “induced” by the offer (a concept on which Moderna relies as part of its case on “consideration”) was contained in the section of his report dealing with “acceptance”. Mr Murray accepted in cross-examination that the authorities he had considered in connection with “acceptance” were largely identical to those he looked at in connection with “consideration”.

In view of the experts’ agreement that the issues of “acceptance” and “consideration” largely overlapped, I will not deal with the question of consideration separately. Rather I conclude that the same reasons that led me to decide that Pfizer/BioNTech did not accept any offer that was made would have led me to conclude that they gave no consideration for any such offer either.

I do not consider that there is any need to consider the question of disclaimer separately either. Since there was no offer, acceptance or consideration, I conclude that there was nothing that Pfizer/BioNTech could have disclaimed. I will, however, note briefly my conclusion that Pfizer/BioNTech’s act in denying infringement of the UK Patents in these proceedings did not constitute a disclaimer of an intention to accept any offer that Moderna made. That is for the simple reason that, if there was an offer, the stipulated act of acceptance was making vaccines to combat the pandemic. Denying infringement of the UK Patents was not inconsistent with acceptance of an offer made in those terms.

The propositions of US federal law set out in this introduction are drawn from the Joint Statement and are, except where indicated otherwise, common ground between the parties.

Patent law in the United States falls within the subject matter jurisdiction of federal courts because US patent rights are federal law rights. Questions of substantive patent law, including whether a person has a defence to an allegation of infringement of a patent, are determined in the US federal courts which have three main levels: i) district courts (which function as trial courts), ii) circuit courts (which are the first court of appeal) and iii) the United States Supreme Court, which is the final court of appeal. The US Court of Appeals for the Federal Circuit (the “Federal Circuit”) has the exclusive nationwide jurisdiction to hear appeals in patent cases, including appeals from district courts in cases of patent infringement. Decisions of the Federal Circuit are binding on district courts. Decisions of the US Supreme Court are binding on both the Federal Circuit and on district courts.

US federal law permits a person accused of infringing another’s rights to rely on the waiver of those rights as a “judge-made affirmative defence”. Such a waiver can be express or implied. However, since the concept of implied waiver is not relied upon in these proceedings, I say no more about it and focus on the concept of express waiver.

A waiver comprises the intentional relinquishment or abandonment of a known right and requires the following elements to be proved:

Assertions of waiver under US federal law are most frequently made in the context of contractual rights, but are not limited to such rights.

A waiver can take effect under US federal law whether or not any person affected by that waiver relies upon it to their detriment.

Whether there is a waiver or not is to be determined by reference to the actions of the person holding the right, rather than the effect of those actions on the opposing party.

The intent of the allegedly waiving party is ascertained from the words used interpreted objectively. Thus, subjective intentions of the allegedly waiving party are not relevant. A waiving party cannot therefore prevent a waiver occurring by reference to a private mental reservation contrary to an intent to waive where its outward actions clearly indicate an intent to waive.

A waiver once made cannot be revoked, even if no consideration is given for the waiver. Although the experts were agreed on that proposition, they were not agreed on two related points:

By the conclusion of the cross-examination of Judge O’Malley and Professor Chisum, it was common ground that, under US federal law, a patent could fairly be regarded as a “bundle of rights”. They also agreed that the essence of a patent holder’s rights under a patent consists of the right to exclude others from performing acts of infringement that are specified in US federal law. They agreed that each infringement of a patent right is a distinct, actionable infringement with the patentee having the right, as part of its overall “bundle of rights”, to choose to take action for some infringements and not for others. It was also common ground that US jurisprudence has analysed the grant of an express licence as a “mere waiver of the right to sue by the patentee” on the basis that a contractual licence passes no interest in the monopoly conferred by a patent (see the judgment of the US Supreme Court in De Forest Radio Telephone & Telegraph Co v United States 273 US 236).

From these agreed propositions, Pfizer/BioNTech argue that a promise not to enforce patents for a period is capable of being analysed as an express waiver under US federal law. That promise, they argue, represents an irrevocable relinquishment of part of the overall “bundle” of rights. A patentee making such a promise does, of course, retain rights under the patent and, by limiting the promise to a period, is expressly retaining the right to enforce the patent once the period expires. However, argue Pfizer/BioNTech, there is nevertheless an irrevocable waiver of part of the bundle in the sense that the patentee forgoes forever the right to sue addressees of the promise for infringements of the patent committed during the period of the promise.

Moderna argues that this analysis involves a mis-labelling of key concepts. They argue that there is a conceptual difference between a mere “forbearance to sue” and a federal law waiver of rights. While acknowledging that a licence can be regarded as a “waiver” of a right to exclude in a general sense, that does not make a mere forbearance to exercise the right to exclude for a limited period a “waiver” in the specific US federal law sense.

In the remainder of this section, I will use the term “temporary forbearance to sue” to describe the kind of statement made in the Pledge. In doing so, I should not be taken as prejudging the question of whether there is a conceptual difference between a “temporary forbearance to sue” and a US federal law waiver which is one of the questions of US federal law that I must resolve.

I start with my overall conclusions and set out reasons for them in the remainder of this section:

Because of the point made in paragraph 144.iv), this court is particularly reliant on the expert evidence. Even if I considered every authority referred to myself, that would not provide the answer to the ultimate question I must determine. It therefore follows that, to a significant extent, I must consider how the respective opinions of Judge O’Malley and Professor Chisum held up in cross-examination including by considering their overall logic and consistency.

The proposition I have set out in paragraph 144.i) was common ground between the experts. Indeed, Pfizer/BioNTech’s case had previously involved the proposition that the Pledge gave it rights under US federal law by virtue of the doctrines of implied licence, legal estoppel and/or equitable estoppel. Those aspects of its case were abandoned before the trial but the expert reports demonstrated the need for “reliance” for any of these doctrines to apply.

Professor Chisum was clearly troubled by his concern that, if a temporary forbearance to sue for patent infringement was capable of engaging the US federal law doctrine of waiver of rights, a promisee would have a legal defence to allegations of infringement without detrimental reliance. He was concerned that this would dilute a central requirement of the doctrines of legal and equitable estoppel and implied licence which were the natural avenues for a promisee to explore in order to enforce a non-contractual forbearance to sue.

In his expert report, Professor Chisum suggested that, in order to address this concern, US federal courts might introduce a requirement for there to be detrimental reliance before a promisee could rely on a temporary forbearance to sue for patent infringement as constituting a federal law waiver of rights. He withdrew that opinion in cross-examination in the light of the judgment of the US Supreme Court in Morgan v Sundance Inc 596 U.S. 411 (2022) in which the Supreme Court held that the federal court should not formulate distinct rules of waiver applicable to distinct areas of law, although he remained of the view that a temporary forbearance to sue was incapable of amounting to a federal law waiver.

However, I nevertheless consider that Professor Chisum’s reservation set out in paragraph 147 had force. The federal courts would not need to formulate a “bespoke” rule of waiver applicable to patent law in order to conclude that a temporary forbearance to sue is something other than a permanent relinquishment of rights. Rather, the federal courts would, in my judgment, be entitled to conclude that a temporary forbearance to sue does not answer to the definition of a federal law waiver of rights as there are other, more natural, means of characterising it (such as a legal or equitable estoppel or an implied licence). Adopting that approach could be regarded as preserving the requirement for detrimental reliance in cases of legal or equitable estoppel or implied licence, which would preserve the coherence of these doctrines.

The propositions set out in paragraphs 144.ii) and 144.iii) emerged following cross-examination of the experts. Naturally enough, Pfizer/BioNTech emphasise the proposition set out in paragraph 144.ii). Moderna emphasises the proposition set out in paragraph 144.iii).

Those propositions cannot, on their own, determine the matter. However, it is instructive to consider those cases in which an alleged express waiver of rights has been relied on in a patent law context.

Pfizer/BioNTech were able to identify just three cases: (i) Winbond Electronics Corporation v International Trade Commission 275F.3d 1344 (2001) (“Winbond”) which was a judgment of the Federal Circuit, (ii) Qualcomm Incorporated v Broadcom Corporation 548 F.3d 1004 (2008) (“Qualcomm”) which was also a judgment of the Federal Circuit and (iii) American Technical Ceramics Corp and another v Presidio Components, Inc 2018 WL 1525686 (“Presidio”), a judgment of the District Court.

In Winbond, a standard-setting organisation (“SSO”) was considering adopting a particular patented invention as an industry standard. While the SSO was performing its evaluation, the patentee stated that, if the invention was adopted as an industry standard, it would be willing to grant licences for a one-time fee to any manufacturer and to place the subject matter of the patent in the public domain. An administrative law judge had held that the patentee’s statement amounted to an express waiver of rights. The Federal Circuit considered the question of waiver of rights in just one paragraph concluding that there was no waiver because the patentee’s statements were conditional on the SSO adopting the invention as an industry standard and that condition was never satisfied.

Thus, Winbond did not involve any temporary forbearance to sue but instead addressed a promise, a component of which was to place the patent of invention in the public domain. The Federal Circuit did not need to make potentially ground-breaking determinations on the boundary between a temporary forbearance to sue and an express waiver of rights under federal law because, given the conditional nature of the patentee’s promise, the question simply did not arise in the case before it. I regard Winbond as shedding relatively little light on the question whether a temporary forbearance to sue for infringement of a patent can constitute an express waiver of rights.

In Qualcomm, a patentee was obliged to disclose the fact that it held particular patents to an SSO. It deliberately failed to comply with its disclosure obligation in the hope that a particular standard, to which the patents were essential, would be adopted as an industry wide standard which would place the patentee in a strong position to require high royalties from implementers. The district court had held that the action of failing to disclose the patents involved the patentee making an express waiver of its rights as a matter of federal law. The Federal Circuit disagreed. It concluded that the very purpose of the non-disclosure was so that the patentee could obtain royalties from the patents in the future, which was completely incompatible with a conclusion that it had waived its rights.

Therefore, Qualcomm, like Winbond, did not involve a temporary forbearance to sue. In addition, as in Winbond, there was no need for the Federal Circuit to decide on the boundary, if any, between express waiver and doctrines of implied licence, and legal or equitable estoppel, since the conduct of the patentee was incapable as a matter of fact from constituting an express waiver.

Presidio was a judgment of a District Court on a summary judgment application. There was some evidence that a patentee had a policy of not enforcing its patent rights. The District Court declined to strike out a defence based on express waiver.

Being a judgment of the District Court, Presidio is of limited value as a binding precedent. Moreover, since it concerned summary judgment, it did not need to express any concluded view on the precise boundary between express waiver and forbearance to sue.

Overall, I conclude that the cases of Winbond, Qualcomm and Presidio do not advance the debate greatly and do not counteract the force of Professor Chisum’s point summarised in paragraph 147 above. While it is true to say that none of these cases rule out the possibility of a temporary forbearance to sue constituting an express waiver of rights, in none of the cases did the point arise for determination.

I also consider it significant that Judge O’Malley’s analysis of whether a temporary forbearance to sue could constitute an express waiver in her expert report did not address the issue which troubled Professor Chisum. Of course, that is not determinative since conceptually Professor Chisum’s concern might be groundless. However, it is instructive to consider the basis on which Judge O’Malley reached her conclusion.

Much of Judge O’Malley’s analysis set out in her expert report involved largely uncontroversial principles. The truly controversial aspect of her expert report was contained in paragraph 7.7 (with an echo in paragraph 7.4) that read as follows:

the scope of the waiver depends on the specific facts of the case and on the interpretation of the words or writing used by the waiving party. A party may waive all of its rights under a patent, or it may choose to waive those rights only “in part”²³. For example, a patentee might waive only the right to enforce their patent for a limited period of time or only under specific circumstances²⁴.

Judge O’Malley’s footnote 23 refers to the case of Mallinckrodt, Inc v Medipart, Inc 976 F.2d 700 (1992), a judgment of the Federal Circuit. However, that was not a case that dealt with the US federal law concept of waiver of rights. Nor was it a case that explored the boundary between express waiver and a temporary forbearance of a right to sue for patent infringement. The passage on which Judge O’Malley relied involved the Federal Circuit quoting the provisions of US federal law to the effect that a patent conferred the right to exclude others from making, using or selling the invention in the US for a period and then stating:

This right to exclude may be waived in whole or in part. The conditions of such waiver are subject to patent, contract, anti-trust and any other applicable law, as well as equitable considerations such as are reflected in the law of patent misuse. As in other areas of commerce, private parties may contract as they choose, provided that no law is violated thereby…

Some aspects of the actual decision in Mallinckrodt were overruled by the US Supreme Court in Impression Products, Inc v Lexmark International, Inc. I agree with Judge O’ Malley that the quote above was not overruled. However, the difficulty is that Mallinckrodt does not provide any real support for the conclusion that Judge O’Malley seeks to draw. The “waiver” that is referred to in the above extract from Mallinckrodt is the kind of “waiver” of a right to exclude that comes with the grant of a licence. It is not dealing with the federal law concept of express waiver of rights.

Judge O’Malley’s footnote 24 was a reference to Winbond. Judge O’Malley confirmed that she had in mind the aspects of Winbond that endorsed the proposition that there could be a partial waiver of attorney-client privilege. However, that is some way from the present dispute.

I have concluded that Judge O’Malley’s analysis of waiver of rights advanced some propositions of US federal law that were potentially far-reaching given Professor Chisum’s valid concern articulated in paragraph 147. However, Judge O’Malley’s expert opinion did not fully explore the consequences of that analysis and, moreover, rested on the judgments in Mallinckrodt and Winbond that were concerned with different legal principles.

Finally, I note other materials on the concept of an express waiver that, while not determinative in themselves, are more consistent with Professor Chisum’s analysis than with that of Judge O’Malley.

In Fox v Commissioner of Inland Revenue 874 F.2d 560, the Federal Circuit made the following observation on the nature of a US federal law waiver of rights:

Irrevocability is the essence of a waiver provision. ... For a waiver to be effective, the right allegedly waived must be gone beyond recall.

I quite accept that it is possible to conclude that a temporary forbearance to sue for patent infringement satisfies this requirement. For the temporary period of the forbearance in question, it can be said that the patentee has irrevocably given up the right to sue for infringements in that period. However, I agree with Moderna and Professor Chisum that this approach would give the concept of “irrevocability” a somewhat strained meaning which the US Supreme Court would not adopt. A patentee forbearing to enforce a patent for a temporary period is more naturally to be regarded as having given up nothing that is “irrevocable” or “beyond recall” since, when the period expires, the patentee will again have all the rights conferred by the patent in question.

If the support for Judge O’Malley’s alternative interpretation had been stronger, and if Judge O’Malley had been able to set out a more persuasive answer to Professor Chisum’s concern articulated in paragraph 147, I might well have been attracted to the conclusion that a temporary forbearance to sue could be “irrevocable” in the sense outlined above. However, in the event I conclude that the weight of the various indications point in favour of Professor Chisum’s analysis with the result that his analysis is more likely to be correct than that of Judge O’Malley.

As I have noted, both Judge O'Malley and Professor Chisum agreed that a waiver could not be “revoked”. However, treatises, for example Corpus Juris Secundum on Estoppel and Waiver in Section 93, recognise that there are circumstances in which a waiver can be “retracted” before the other party has materially changed position in reliance thereon. It is fair to say that the distinction between “retraction” and “revocation” was not explored with either expert in great detail in cross-examination. However, Judge O’Malley did not express disagreement with the commentary in Section 93 of this treatise.

Judge O'Malley’s principal position advanced in her expert report was that a waiver can itself stipulate the period for which it is to last. However, at paragraph 7.12 of her expert report she stated that:

Even where a waiver does not itself make it clear how long it lasts, courts have recognised that a waiver cannot be revoked “without first providing sufficient notice of the withdrawal and a reasonable time for plaintiffs to alter their conduct”. In all events, revocation of a waiver must be “clear and unequivocal.”

I did not find that proposition straightforward to follow. Both experts appeared agreed that a waiver is irrevocable with the difference between them involving the question whether a waiver can be expressed, in its terms, to be time-limited. Therefore, it was not entirely clear to me how, if a waiver did not specify “how long it lasts”, it could, on the parties’ common position, be revocable at all and so I did not fully understand where the concept of “sufficient notice” fits in on Judge O’Malley’s analysis.

Judge O’Malley referred to the authority of La Guardia Associates v Holiday Hospitality Franchising, Inc. 92 F.Supp.2d 119 (2000), a judgment of a District Court. Pfizer/BioNTech’s skeleton argument referred to a further authority: Liberty Bay Credit Union v Open Solutions, Inc. 905 F.Supp.2d 389 (2012), but Judge O’Malley said in cross-examination that she had never read this case and I conclude, therefore, that she did not consider it to advance the debate and I focus on La Guardia.

La Guardia did not concern a situation where someone had purported to “retract” a waiver before the point at which another person had materially changed position in reliance on that waiver. Accordingly, it does not cause me to doubt the propositions that I have summarised in paragraph 170 above.

Nor do I consider that La Guardia stands for propositions on the US federal law of waiver set out in paragraph 7.12 of Judge O’Malley’s expert report. In La Guardia, a party (“Holiday”) established a practice of waiving contractual rights by giving a 60-day “grace period”, rather than insisting on payment by the 15^th day of each month. Importantly, there had not been a complete waiver of all rights under the contract: Holiday retained the right to the payments in question and had just waived rights to insist on payment by the 15^th of each month. A question arose as to the extent of notice that Holiday needed to give of an intention to insist on its strict contractual rights going forward despite its waiver of earlier rights.

Answering that question involved no questions of the federal law of waiver. The historic effect of the US federal law waiver was dealt with briefly at [9] to [10] of the judgment, with the court confirming that the waiver of the right to insist on payment by the 15^th of each month was irrevocable and the waiving party could not “reach back” to defaults that it had waived and rely on them as a basis for terminating the agreement. The court’s conclusion that notice had to be given of Holiday’s intention to insist, in the future, on its strict contractual rights was dealt with by the application of equitable principles applicable in the state of New York, having due regard to the nature of the contract in question (a franchise agreement).

I conclude that, to the extent that the Pledge involved a waiver of rights under US federal law, Moderna was entitled to retract it at any point before Pfizer/BioNTech materially changed its position in reliance thereon. Any such retraction had to be communicated to Pfizer/BioNTech to take effect, but there is no requirement that Moderna give reasonable notice thereof.

I conclude that the Pledge was at most a temporary forbearance to sue for infringement of patents which did not constitute an express waiver of rights as a matter of US federal law.

Even if the Pledge was an express waiver of rights, it was validly retracted by the March 2022 Statement since Pfizer/BioNTech had not by that date materially changed its position in reliance on the Pledge.

Pfizer/BioNTech argue that, even absent any binding contract under Massachusetts law, and even absent any Federal Law Waiver, it had Moderna’s consent to otherwise infringing acts between the date of the Pledge and 5 May 2023 when the PHEIC ceased.

Moderna denies that the Pledge was capable of conferring consent for the following reasons:

I have already concluded that the Pledge was “addressed” to Pfizer/BioNTech in paragraphs 31 to 35 above. The question now to be considered is whether the Pledge amounted to “consent”.

I quite accept that there are situations in which there is a difference between a forbearance to sue and “consent”. If A says to B that A will not sue in the civil courts if B uses A’s car to drive to the supermarket, A might not be consenting to the use of the car in this way. However, the whole essence of a patent is that it confers a monopoly right to prevent others from exploiting the patented invention with that right only being enforceable by legal action against anyone infringing that right. Therefore, when a patentee says to another person that it will not “enforce” a patent, the fair interpretation of such a statement is that the other may exploit the patent without consequence since the monopoly rights that are the essence of the patent are not being asserted. Viewed objectively, I see no real difference between such a statement and a statement that a patentee “consents” to the exploitation of the patent.

That explains my reasons for rejecting the argument summarised in paragraph 181.i). Moderna’s statement that it would not enforce its COVID-19 patents did not need to refer to the UK or to the Patents Act to amount to consent. By saying that it would not enforce its patents (not limited to patents protected under the law of any particular jurisdiction), Moderna was giving consent to acts that would otherwise constitute infringement of the (UK) Patents.

The Pledge did not contain any reference to the jurisdiction in which vaccines are made. Accordingly, the consent conferred by the Pledge was not conditional on vaccines being manufactured in any particular jurisdiction. I reject the argument in paragraph 181.ii).

In their skeleton argument, Pfizer/BioNTech argued that any consent conferred by the Pledge was irrevocable even if there was no unilateral contract under Massachusetts law and even if there was no Federal Law Waiver. That argument was not pursued in closing and I would have rejected it in any event. As a matter of ordinary English, “consent” is perfectly capable of being given and then withdrawn. I see no reason why it should be treated as having a different sense in s60 of the Patents Act.

Accordingly, in my judgment, on every day after the Pledge was published on which (i) the Pledge had not expired in accordance with its terms and (ii) Moderna had not yet revoked the Pledge, Pfizer/BioNTech had consent to what would otherwise be infringing acts under s60 of the Patents Act.

The Pledge did not expire in accordance with its terms before the March 2022 Statement (see my conclusion in paragraph 44 above). However, given my conclusions in paragraph 65, the consent given by the Pledge was revoked by the March 2022 Statement. In United Wire v Screen Repair Services [2001] RPC 24, Aldous LJ, said at [25] (emphasis added):

However, a person will infringe the patentee’s rights if he does, without the patentee’s consent, an infringing act. Consent must mean contractual consent and it would not be right to conclude that a patentee who sells a product thereby consents to infringing acts being carried out.

Neither party referred to this authority in their written or oral submissions. I have concluded that Aldous LJ’s statement is not inconsistent with my decision in paragraph 187. First, his statement was not part of the ratio decidendi since the case was not concerned with the question whether consent had to be contractual in order to “count” for the purposes of s60. Second, read in context Aldous LJ was simply concluding that, where a patentee enters into a contract for sale of patented goods, it does not follow that the contract amounts to consent to infringing acts. That conclusion is not inconsistent with the proposition that simple, non-contractual, consent is sufficient to provide a defence to acts which would otherwise be infringing.

Further, whilst it was not advanced by counsel for Pfizer/BioNTech in oral submissions, Pfizer/BioNTech’s opening skeleton argument included a submission that if Moderna was entitled to withdraw its consent by way of the March 2022 Statement, it was required to give Pfizer/BioNTech a reasonable amount of time to cease their infringements. Pfizer/BioNTech relied on Costa v Dissociadid Ltd [2022] EWHC 1934 (IPEC) [71-82]. In that case, the conduct of the parties was found to have established a “bare licence” which would terminate only after a reasonable period had passed following notice of revocation (citing Mellor v Watkins [1873-74] LR9 QB 400).

However, the “bare licence” in Costa was in the nature of a contract, formed by conduct, containing a term requiring reasonable notice to be given of termination. As will be seen from the section that follows, I reject Pfizer/BioNTech’s pleaded case on the existence of a contract. It follows that there is no contract conferring “consent” in this case and, accordingly, no contractual requirement on Moderna to give Pfizer/BioNTech any kind of notice of revocation of the Pledge.

My conclusion on this topic is that Pfizer/BioNTech had non-contractual consent to perform acts that would otherwise infringe the Patents between 8 October 2020 and 7 March 2022.

There was no unilateral contract between Moderna and Pfizer/BioNTech under Massachusetts law because:

Accordingly, there was no Massachusetts law contract to alter the conclusion set out under “Simple Consent” above that Moderna’s consent was revocable and revoked by the March 2022 Statement.

A fundamental problem with Pfizer/BioNTech’s case based on the Federal Law Waiver is that it reduces to a matter of labelling.

Even if the Pledge is labelled as a Federal Law Waiver that would simply provide an “affirmative judge-made defence” if proceedings were brought in the US federal court for infringement of US patents. However, these proceedings are taking place in England and concern infringement of UK patents. English law does not have the same concept of “waiver of rights” as appears in US federal law.

The contrast with the argument based on the Unilateral Contract is instructive. If there were a Unilateral Contract, it would be open to Pfizer/BioNTech to argue that the “consent” they had pursuant to that contract was irrevocable, at least until the contract expired in accordance with its terms. In that case, although the question before the court would still be concerned with “consent” under s60 of the Patents Act, the Unilateral Contract would give that “consent” an added dimension, in the nature of irrevocability, arising because the English courts are prepared in principle to give effect to contracts governed by foreign law.

The argument based on the Federal Law Waiver is incapable of giving rise to any added dimension of irrevocability because, at most, any Federal Law Waiver would operate as a defence and, moreover, only as a defence to infringement proceedings in the US federal courts.

Therefore, even if I had held that Moderna’s actions answered to the definition of a “waiver of rights” under US federal law, that would not have altered my conclusions set out under “Simple Consent” above. Even if there were conduct amounting to a US federal law waiver, that would not as a matter of English law, render the “consent” that Moderna had given irrevocable.

In any event, the Pledge did not answer to the definition of a US federal law waiver. To the extent it did, the waiver was retracted in the March 2022 Statement.