• Integra Lifesciences I, Ltd, et al v. Merck KGaA, et al (Supreme Court Decisions - June 15, 2005)
  • June 17, 2005
  • Law Firm: Dinsmore & Shohl LLP - Cincinnati Office
  • "[W]hoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports any into the United States any patented invention during the term of the patent therefor, infringes the patent." 35 U.S.C. §271(a). Only in limited circumstances are activities which would otherwise fall under this definition of infringement not held to be infringement. An example is in the safe harbor provision of 35 U.S.C.§271(e)(1), which provides that acts of infringement are exempt from liability if the act is "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products". The safe harbor afforded by §271(e)(1) was established as part of the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the "Hatch-Waxman Act", in response to the Court of Appeals for the Federal Circuit's (CAFC's) decision in Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858 (Fed. Cir. 1984) which held that pre-patent expiration tests infringed a patent on a pioneer drug.

    On June 13, 2005, in the case of Merck KGaA v. Integra, the Supreme Court held that §271(e)(1) "provides a wide berth for the use of patented drugs in activities related to the federal regulatory process, including uses reasonably related to the development and submission of any information under the FDCA", and "exempts from infringement the use of patented compounds in preclinical research, even when the patented compounds do not themselves become the subject of an FDA submission."

    Merck had relied on the safe harbor provision of §271(e)(1) to exempt its research activities from patent infringement when it was sued by Integra Lifesciences (Integra). In its decision, the Supreme Court held that "use of patented compounds in preclinical studies is protected under §271(e)(1) at least as long as there is a reasonable basis to believe that the compound tested could be the subject of an FDA submission and the experiments will produce the types of information relevant to an IND or NDA".

    As background, Integra owns several patents related to a tri-peptide segment of fibronectin, referred to as the "RGD peptide". The RGD peptide attaches to receptors on cell surface proteins called integrins, thereby promoting cell adhesion to substrates in culture and in vivo.

    Dr. Cheresh, a Scripps scientist, discovered that blocking the receptors inhibits angiogenesis, the growth and proliferation of blood vessels. Recognizing the importance of Dr. Cheresh's research, Merck entered into an agreement with Scripps and Dr. Cheresh to identify potential drug candidates that might inhibit angiogenesis. The research eventually led to the discovery of several drug candidates. The candidates were evaluated using tests which assessed the action of the cyclic RGD peptide, including the histopathology, toxicology, circulation, diffusion, and half-life of the peptide in the bloodstream.

    Believing that the research being conducted by the Merck-Scripps Agreement infringed its RGD peptide-related patents, Integra offered Merck licenses to its patents. When Merck declined, Integra sued.

    At trial, Merck argued that its research was exempt from infringement under the safe harbor afforded by 35 U.S.C. §271(e)(1). The district court disagreed, determining that the exemption did not embrace Merck's infringing activity and the jury awarded Integra a reasonable royalty of $15,000,000. Merck appealed. On appeal, the CAFC also held that Merck's discovery-based research was not exempt from infringement under the safe harbor provisions of §271(e)(1).

    The CAFC ruled that the safe harbor did not extend to exploratory research, but only to later-phase, human trials typically involving generic drugs. The court noted that "the express objective of the 1984 Act was to facilitate the immediate entry of safe, effective generic drugs into the marketplace upon expiration of a pioneer drug patent", while maintaining a de minimis impact on the patentee's right to exclude. As such, the Act was designed to create a safe harbor for those pre-patent expiration tests necessary and "reasonably related to" activities to satisfy Federal law.

    The court reasoned that since Merck's research was not clinical testing to satisfy Federal law, but was only general biomedical research to identify new pharmaceutical compounds, the Scripps research was not "solely for uses reasonably related to the development and submission of information under a Federal law." The CAFC further stated that the safe harbor afforded by §271(e)(1) "does not globally embrace all experimental activity that at some point, however attenuated, may lead to an FDA approval process." In its arguments before the Supreme Court, Merck argued that the safe harbor provision should be interpreted broadly to cover any research "directed at developing information relevant to an IND application". Under such an interpretation, Merck argued that the allegedly infringing experiments using the RGD peptide in the present case are afforded protection under the safe harbor because (i) it was reasonably believed that the compound, which was evaluated using tests that assessed the action of the cyclic RGD peptide, was a viable drug candidate, and (ii) the experiments produced information that is relevant to an IND application. Merck's arguments were supported by many pharmaceutical and biotechnology companies. In addition, the AARP stated in its amicus brief supporting Merck that "[I]f this decision stands, the inevitable effect will be that the costs of drug development will be driven up even further and it will serve to delay the development of new medicines". Integra unsuccessfully attempted to shift the direction of the Court's review by arguing that the case should be reviewed to determine if Merck's activities were reckless and not whether certain experimental activities may fall within the scope of FDA requirements. However, universities and smaller biotechnology companies, which develop scientific tools used in pharmaceutical research, hold steadfast by arguing that their industry would go bankrupt if larger companies are given freedom to use their patented work without first paying a licensing fee.

    Holding that the CAFC applied the wrong standard in determining whether Merck's activities were covered under §271(e)(1), the Supreme Court vacated the decision of the CAFC and remanded the case so that the trial evidence may be reviewed under the standard set forth in the jury instruction and developed in more detail by the Supreme Court.