Analysis: Reversal coming in patent case?

By Lyle Denniston
on Apr 20, 2005 at 11:52 am

An opaque and frequently meandering hearing in the Supreme Court Wednesday on a major dispute over drug patents left the impression that pharmaceutical research laboratories may get more legal protection than the Court of Appeals-Federal Circuit was prepared to give them. With Justice Sandra Day O’Connor leading the charge, a fairly strong prospect emerged for a reversal of the Circuit Court’s June 2003 decision on the meaning of a “safe harbor” Congress provided against drug patent infringement.

The case was Merck KGaA v. Integra Lifesciences (docket 03-1237), testing how far back in the research chain on future drugs Congress meant to go in 1984 in insulating some research from claims of infringing existing “pioneer” drug patents. Merck, a German pharmaceutical company found not eligible for that exemption for research on a substance bearing on the process for the growth of new blood vessels, petitioned the Court to overturn the Federal Circuit.

Near the end of the hearing, Justice O’Connor suggested that the Circuit Court may have been wrong in three ways in interpreting the scope of the infringement “safe harbor” – that the exemption was based on the assumption that Food and Drug Administration in reviewing drug applications would “consider safety and nothing else,” that the exemption only applied to research on generic drugs, and that “there was a cut-off point” for exemption, so that it did not cover pre-clinical trial studies (that is, animal studies). “If they were wrong about it, it is open to us to say so and send it back,” O’Connor told an attorney for Merck’s challenger, Integra Lifesciences, Mauricio A. Flores of Irvine, Calif.

The hearing, though, did not point certainly to a victory for Merck. At least four members of the Court seemed troubled that, at the trial on the infringement claim, Merck’s attorneys had not objected to a jury instruction that seemed to narrow significantly the scope of “safe harbor” protection. Justice David H. Souter, for example, commented: “The instruction you agreed to included a limitation that is not in the statute. If we read the statute more broadly than the instruction, you [Merck] would get something you are not entitled to, because you accepted the instruction.” He told Merck’s attorney, E. Joshua Rosenkranz of New York, “That appears to be the law of the case as to what the statute means” – thus indicating that Merck was not free to argue a more expansive definition. Souter’s skepticism on this point appeared to be shared, at least in part, by Chief Justice William H. Rehnquist and Justices O’Connor and Antonin Scalia.

The hearing did take a significant detour from the core issue about the “safe harbor” into a discussion of the overall FDA drug approval process, and especially how much FDA focuses on whether new drugs will actually work as well as be safe, but the overall focus of the one-hour review was on the infringement exemption.

Attorney Flores for Integra appeared to make little headway with an attempt to convince the Court that the Federal Circuit itself had not actually taken a position on how far the exemption was to reach. He argued that the appeals court had focused solely on whether there was any error in the District Court decision against Merck. The Chief Justice noted that the appeals court majority had spent ten pages discussing that issue, and Justice Ruth Bader Ginsburg noted that the dissenting judge on the appeals panel had thought the majority had ruled directly on the issue.

Merck’s claim to the exemption was strongly supported by the U.S. government as an amicus. Assistant Solicitor General Daryl Joseffer mounted a brief, but penetrating, assault on the Federal Circuit’s conclusions. Justice O’Connor, in several comments, relied upon the government’s view in part of her criticism of the panel decision.