Patenting Bioresearch And Drug Development In the Wake of The U.S. Supreme Court

By Andres F Quintana

The U.S. Supreme Court recently issued a landmark patent decision giving drug companies more leeway to develop new medicines, ruling that compounds patented by rivals do not bar them from starting research on new competing medications. The unanimous ruling in Merck KGaA v. Integra Lifesciences I, Ltd., set aside a lower-court ruling for patent holder Integra LifeSciences Holdings Corp. Integra had sued Germany’s Merck KGaA for patent infringement for using several of Integra’s “RGD peptide” patents in identifying promising new tumor inhibiting drugs. The peptides are biological compounds containing two or more amino acids and form the constituent parts of proteins. Integra had offered Merck licenses on the patents, but Merck declined. At trial, Merck KGaA argued that its use of the patents was protected by 35 U.S.C. §271(e)(1), the so-called “safe harbor” provision of the patent statute, which protects the use of generic patents in work that is “reasonably related” to the development and submission of data to the Food and Drug Administration (FDA). The primary purpose of the law was to bring generic drugs to market sooner. If competitors were permitted to use the patented drugs for research and clinical trials, they could have generic versions readied when the patent expired. The law gives patent holders seventeen years of protection, and the delay for research could, and often does, add years to that time. Following a jury trial, the district court ruled that Merck KGaA infringed on Integra’s patents and that the safe harbor provision did not immunize Merck KGaA against liability.
The U.S. Court of Appeals for the Federal Circuit, the chief patent appellate court, affirmed last year, construing the safe harbor provision narrowly to only include clinical trials leading to FDA drug approval. In recent years, the Federal Circuit has reasoned that Congress intended only to promote the growth of generic drugs when it passed the exemption in 1984. According to the Federal Circuit, to qualify for the exemption, the otherwise infringing activity must directly produce information for submission to the FDA’s safety and effectiveness approval processes. In this case, Merck KGaA was not performing clinical tests to supply information to the FDA, but only general biomedical research to identify new pharmaceutical compounds. Therefore, the research being performed by Merck KGaA was not “solely for uses reasonably related” to clinical testing for the FDA.
The U.S. Supreme Court disagreed with the Federal Circuit. The Court held that the FDA exemption for research is much broader, and drug companies should have more latitude to investigate innovative drugs, not just generics, so long as the research is “reasonably related” to the process of developing information for future drug submission. According to the Court, there is “no room in the statute” for excluding certain information from the exemption on the basis of the phase of research in which it is developed or the particular submission in which it could be included. The provision is now understood to permit most uses of patent-protected inventions related to the generation and submission of any data for FDA approval.
The Supreme Court’s ruling constitutes a major victory for drug companies, since they can now begin drug discovery experiments and research faster, potentially saving millions of dollars in licensing costs associated with startup research. Practically, the ruling should also promote drug discovery research sometimes caused by late patent expiration dates or complex and multi-faceted licensing negotiations. Had the Supreme Court found for Integra instead, however, many pharmaceutical companies would have been forced to either suspend preclinical research programs or relocate relevant departments to countries with historically looser patent protections. Thus, the ruling should further encourage more drug development here in the United States rather than outsourcing it to foreign countries.


About the author:
Andres F. Quintana is a partner in the intellectual property and litigation department of Beverly Hills, California-based Ervin, Cohen & Jessup LLP. He may be reached at aquintana@ecjlaw.com


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