On Wednesday, April 20, the Supreme Court will hear oral arguments in Merck KGaA v. Integra Lifesciences, No. 03-1237, an important intellectual property case that will help define the boundary between patent infringement and protected scientific research.

Under the Drug Price Competition and Patent Term Restoration Act of 1984, "It shall not be an act of [patent] infringement to make, use, offer to sell, or sell a patented invention solely for uses reasonably related to the development and submission of information" to the Food and Drug Administration. 35 U.S.C. § 271(e)(1). The issue in Merck is whether pre-clinical animal studies that might eventually lead to FDA filings about the development of new drugs are exempt from patent infringement liability under the "safe harbor provision" in § 271(e)(1).

At trial, a jury rejected Merck"™s safe harbor defense and awarded Integra a "reasonable royalty" of $15 million for patent infringement. The Federal Circuit reversed and remanded on damages, but affirmed the finding of patent infringement. Merck KGaA v. Integra Lifesciences, 331 F.3d 860 (Fed. Cir. 2003).

Over fifteen amicus briefs have been filed in this case, and the United States has filed both certiorari and merits briefs on behalf of Merck. A good overview of the amicus briefs is provided here.

At the time this case arose, Integra owned several patents for peptide compounds. Dr. David Cheresh of the Scripps Institute had been experimenting with these patented compounds and had made several promising discoveries, including their possible use in cancer treatment. Merck KGaA subsequently hired Cheresh to continue his research and to identify possible drugs that might be derived from his work. When it learned about this research, Integra offered to license its patents to Merck, but Merck refused and Integra filed suit for patent infringement.

The Federal Circuit found Merck liable for patent infringement, holding that the safe harbor in § 271(e)(1) did not apply here because Merck"™s research was not "solely for uses reasonably related to the development and submission of information" to the FDA. The court noted that the primary purpose of the statute in question was to ensure that generic drugs could enter the market as soon as possible after the patent expired on a name-brand drug. By allowing generic companies to perform FDA-required tests on patented drugs before the patent expired, Section 271(e)(1) was intended to speed up the regulatory approval process for generic drugs. According to the court, legislative history indicates that the provision is only intended to have a de minimis effect on patent rights, and the presence of the word "solely" indicates that the statutory safe harbor is limited to cases involving research for the FDA. Overall, the Federal Circuit noted that "§ 271(e)(1) simply does not globally embrace all experimental activity that at some point, however attenuated, may lead to an FDA approval process." The court held that Merck"™s research was patent infringement because it constituted "general biomedical research" rather than "clinical testing to supply information to the FDA." Judge Pauline Newman dissented, arguing that this research should be protected by either § 271(e)(3) or a "common law research exception."

The fundamental issue in this case is how much research can be done using patented substances without constituting infringement. Both parties agree that § 271(e)(3) protects Merck"™s research in connection with its FDA Investigatory Drug Application, which was filed in 1998 for one of the drugs identified by Dr. Cheresh"™s research. However, the parties strongly disagree over whether Merck and Cheresh"™s earlier pre-clinical research is also protected by the safe harbor.

In its brief, found here, Merck emphasizes that all it was using the patented compounds for was research and experimentation "“ it had not marketed the resulting drugs for sale, and it will not gain any commercial benefit from the drugs until after Integra"™s patents expire. Merck gives a detailed description of the FDA drug approval process, and notes that much early research is conducted with an eye towards securing FDA approval for further drug tests. The brief simply states that "Dr. Cheresh"™s experiments yielded exactly the sort of information that is of interest to the FDA." Merck also notes that its researchers had met with the FDA long before the application was filed to discuss the types of studies that would be helpful in securing approval of the drug. Additionally, the experiments provided valuable information that was actually used in FDA regulatory filings "“ especially information about safety, efficacy, pharmacology, and pharmacokinetics.

In short, Merck argues that § 271(e)(3) is a broad exemption from patent infringement that covers any use of a patented product "reasonably related to the development and submission of information" to the FDA. Merck criticizes the Federal Circuit for using vague legislative history and "statutory purposes" to limit this seemingly broad language to generic drugs. Applying its proposed rule to the facts, Merck concludes that all of the animal experiments in question were "reasonably related" to information that was being gathered for future submission to the FDA, and thus its use should be protected by the § 271(e)(3) safe harbor.

As it had at the cert. stage, the United States also filed an amicus brief supporting Merck. The brief argues that data from pre-clinical studies must be submitted to the FDA as part of an Investigational New Drug Application (IND), and therefore any drug development research beyond "basic research" should fall within the safe harbor of § 271(e)(3). Here, the experiments in question by Cheresh and Merck had progressed significantly beyond basic research to include many drug development studies that are highly relevant to FDA submissions.

Integra"™s brief presents a very different picture, arguing that the experiments in question were not intended for FDA regulatory filings but were merely a "basic research program to search for new drugs," and thus the safe harbor of § 271(e)(3) should not apply. Integra attempts to frame Merck"™s merits brief as a mere "sufficiency of the evidence" point, and it argues that the evidence presented at trial was indeed sufficient to support the jury"™s finding that Merck"™s experiments do not warrant protection under § 271(e)(3). The Integra brief claims that Merck could not have reasonably thought, at the time of its challenged experiments, that the results would be used in the preparation of FDA filings. First, Merck"™s facilities did not meet certain FDA-mandated standards. Additionally, Merck"™s experiments involved chickens, which are not animals that are considered to have "predictive value" for drug safety in humans. Integra also notes that Merck"™s experiments could not have been used for FDA efficacy tests, since preclinical data are generally not used to measure efficacy. The Integra brief also questions the credibility of Merck"™s expert witnesses, noting that several of them had their credibility significantly challenged at trial. Overall, Integra concludes that the evidence presented at trial was sufficient to support the finding of patent infringement against Merck.

In the author"™s opinion, it is quite difficult to ignore the underlying equities of this case: as Merck frequently reminds us in its brief, it was using the patented compounds at issue in order to perform research that will soon be incorporated into cutting-edge cancer treatments. Yet one cannot use mere expediency or utility to justify a diminution of intellectual property rights. After all, Integra might not have invented the peptide compounds in the first place if it were not guaranteed exclusive use by the patent laws. Merck"™s argument about the promise of its research is certainly persuasive, but it ignores the crucial role of intellectual property law in protecting incentives to create (as Merck undoubtedly knows all too well).

Thus, although this case features big-picture issues of scientific research and intellectual property, it ultimately boils down to a traditional question of statutory interpretation. Merck asserts that the plain text of § 271(e)(3) is broad enough to include the research at issue here, since the animal studies using the patented compounds were "reasonably related" to Merck"™s future FDA filings. Integra (as well as the Federal Circuit) would look beyond the text to legislative history and the purpose of the statute, which may indicate that § 271(e)(3) is a narrow provision that is primarily intended to help generic drugs gain faster FDA approval.

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