Case Name: Merck KGaA v Integra Lifesciences I, Ltd.
Case Cite: 545 U.S. 193 (2005)
Facts:
Integra owns five patents related to RGD peptides, which were known to induce cell adhesion with cell surface receptors known as integrins. Dr. David Cheresh, a professor at the Scripps Research Institute (Scripps), discovered that angiogenesis could be inhibited by blocking the cellular surface receptors that interact with the RGD peptides. Inhibiting angiogenesis was seen as way to treat a wide range of diseases including cancer. In 1995, Dr. Cheresh, Scripps, and Merck entered into an agreement for Dr. Cheresh to study the anti-angiogenic properties of various types of RGD peptides. The agreement was to last three years and was intended to end with a Food and Drug Administration (FDA) application for a new drug based in part on the research conducted by Dr. Cheresh at Scripps. However the research conducted by Dr. Cheresh was not aimed specifically at determining the safety of the various drug candidates but rather was aimed at determining which compound was the best potential drug candidate. Under the agreement with Merck, preclinical safety experiments were to be conducted by Merck at its own laboratories once a compound was selected based on Dr. Cheresh's research. This research ultimately demonstrated that one specific RGD molecule, EMD 121974, had characteristics superior to the other potential RGD molecules. Consequently, Merck took certain steps to obtain regulatory approval for EMD 121974.
Procedural Posture:
On July 18, 1996 Integra filed a patent infringement suit against Merck, Scripps, and Dr. Cheresh in the District Court for the Southern District of California alleging the research conducted by Dr. Cheresh infringed its patents related to RGD peptides. Integra sought damages from Merck and a declaratory judgment against Dr. Cheresh and Scripps. Merck argued it did not infringe Integra’s RGD peptide patents and even if it did they were protected by the common-law research exemption and 35 U.S.C. § 271(e)(1) safe harbor (which states there is no patent infringement if use of the patent 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). The district court held, as a matter of law, all but one of the defendants' activities before 1995 "were protected by the common-law research exemption. However, the district court found that there was a question of fact regarding whether 271(e)(1) protected the defendants' other activities and submitted that question to the jury. The jury found that the defendants' uses of the RGD peptides after 1995 infringed Integra's patents and that the research conducted by the defendants was not protected by 271(e)(1). Following a denial of the defendants' post-trial motion for a judgment as a matter of law on the 271(e)(1) issue, the defendants appealed. A split panel of the Court of Appeals for the Federal Circuit affirmed the district court's ruling that the defendants' research was not protected by 271(e)(1). The defendants then appealed to the Supreme Court seeking a determination that the research activities conducted by Dr. Cheresh were encompassed by the statutory research exemption of 271(e)(1).
Holding:
The Court held that 35 U.S.C. 271(e)(1) safe harbor (1) applies to and hence no infringement for uses of patented inventions in preclinical studies that are appropriate for submission to the FDA in the regulatory process; (2) is not limited to only preclinical data pertaining to safety of drug in humans; and (3) does not categorically exclude either experimentation on drugs that are not ultimately the subject of an FDA submission or the use of patented compounds in experiments that are not ultimately submitted to the FDA. According to the Supreme Court, that section covers an accused infringer who uses a patented compound in research that if successful would be appropriate to include in a submission to the FDA. Because the Federal Circuit applied a much narrower submissions standard, the Supreme Court remanded.
Analysis:
The question in this case was to determine whether uses of patented inventions in preclinical research, the results of which are not ultimately included in a submission to the FDA, are exempted from infringement by 35 U.S.C. § 271(e)(1). The Supreme Court found the Federal Circuit’s construction of 271(e)(1) to be overly restrictive because it would only protect use of a compound if it is submitted to the FDA. The Supreme Court agreed with the Federal Circuit that 271(e)(1) is not broad enough to protect all experimental activity that may at some distant point in the future be relevant to a submission to the FDA. Instead the Court based its protection from the statute for research reasonably related to submission or FDA approval. Under the reasonably related language, the Court still allowed use of this safe harbor even if the compound was never the subject of a submission to the FDA. The Court reasoned that the trial and error of research on potential drug candidates justified the safe harbor protection for research that ultimately does not pan out and lead to FDA submission. The Supreme Court realized that one of the primary reasons for a drug manufacturer to conduct preclinical experiments is to get a more complete picture of a compound's properties; this allows a drug manufacturer to make the decision to pursue an IND after the manufacturer has better data regarding the properties of the compound. Because a drug manufacturer usually cannot be certain whether a compound will be suitable for an IND until after analyzing the results of the preclinical experiments, a lack of filing with the FDA does not destroy the use of the exemption.
However, this uncertainty does not exist when the research is conducted by a generic drug manufacturer on a compound that has already been approved by the FDA. Consequently, the Federal Circuit's interpretation of 271(e)(1) would force the non-generic drug manufacturer to bear the risk of facing patent infringement liability for conducting preclinical research if that research does not pan out. The Supreme Court concluded that such a rule would limit assurance of exemption from infringement liability to the activities necessary to seek approval of a generic drug. According to the Court, the statute covers more than just experiments necessary for the approval of generic drugs and applies towards non-generic manufactures as well even if the research conducted on the compound is never submitted to the FDA. The Court explained that in 271(e)(1) Congress exempted from infringement all uses of patented compounds reasonably related to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs, not just uses relevant to the approval of generic products. Therefore, it would be incorrect to interpret 271(e)(1) in such a way that limits its protection only to generic drug manufacturers.
Lastly, the Supreme Court expressly refused to give any guidance regarding the status of the use of research tools under the statutory research exemption of 271(e)(1) because Integra never argued the RGD peptides were research tools.
The Supreme Court adopted a three element test to determine if a patent’s use is exempt from infringement under 271(e)(1). First, a defendant attempting to invoke the protection must find a regulatory basis to bring the allegedly infringing research within the safe harbor. Second the defendant must show the allegedly infringing research was performed with the intent to develop a particular drug. Third the defendant must show a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce.
The regulatory basis element would be satisfied if data generated from the infringing research would be the type of data that FDA regulation deems appropriate to include in a submission to the FDA. Here the Supreme Court allowed non safety preclinical to take advantage of the exemption, which Integra argued should not be appropriate under this exemption.
The second element is established if the subjective intent of the infringer is that their infringing research was reasonably related to a submission to the FDA. The Supreme Court did not give much guidance here but as long as the research is done with a specific intent to develop a drug and not just for general research purposes.
The third element requires that the defendant's intent to develop a drug was a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce. This element ties the test for protection to 271(e)(1) by defining reasonably related in terms of what would be reasonable for a scientist to believe the outcome of the potentially infringing research would be. The Court stated that this element would be met when an infringer has a reasonable basis for believing that a patented compound may work to produce a particular physiological effect. This element ensures that only research on compounds about which a significant amount is known has the ability to qualify for protection under 271(e)(1). Research to screen a large number of compounds, or research to discover completely novel uses of old compounds, would probably fail to be protected under 271(e)(1) under the objective element.
Additional Support Provided by Borchardt, James The Journal of Corporation Law, (Summer, 2007)
Case Cite: 545 U.S. 193 (2005)
Facts:
Integra owns five patents related to RGD peptides, which were known to induce cell adhesion with cell surface receptors known as integrins. Dr. David Cheresh, a professor at the Scripps Research Institute (Scripps), discovered that angiogenesis could be inhibited by blocking the cellular surface receptors that interact with the RGD peptides. Inhibiting angiogenesis was seen as way to treat a wide range of diseases including cancer. In 1995, Dr. Cheresh, Scripps, and Merck entered into an agreement for Dr. Cheresh to study the anti-angiogenic properties of various types of RGD peptides. The agreement was to last three years and was intended to end with a Food and Drug Administration (FDA) application for a new drug based in part on the research conducted by Dr. Cheresh at Scripps. However the research conducted by Dr. Cheresh was not aimed specifically at determining the safety of the various drug candidates but rather was aimed at determining which compound was the best potential drug candidate. Under the agreement with Merck, preclinical safety experiments were to be conducted by Merck at its own laboratories once a compound was selected based on Dr. Cheresh's research. This research ultimately demonstrated that one specific RGD molecule, EMD 121974, had characteristics superior to the other potential RGD molecules. Consequently, Merck took certain steps to obtain regulatory approval for EMD 121974.
Procedural Posture:
On July 18, 1996 Integra filed a patent infringement suit against Merck, Scripps, and Dr. Cheresh in the District Court for the Southern District of California alleging the research conducted by Dr. Cheresh infringed its patents related to RGD peptides. Integra sought damages from Merck and a declaratory judgment against Dr. Cheresh and Scripps. Merck argued it did not infringe Integra’s RGD peptide patents and even if it did they were protected by the common-law research exemption and 35 U.S.C. § 271(e)(1) safe harbor (which states there is no patent infringement if use of the patent 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). The district court held, as a matter of law, all but one of the defendants' activities before 1995 "were protected by the common-law research exemption. However, the district court found that there was a question of fact regarding whether 271(e)(1) protected the defendants' other activities and submitted that question to the jury. The jury found that the defendants' uses of the RGD peptides after 1995 infringed Integra's patents and that the research conducted by the defendants was not protected by 271(e)(1). Following a denial of the defendants' post-trial motion for a judgment as a matter of law on the 271(e)(1) issue, the defendants appealed. A split panel of the Court of Appeals for the Federal Circuit affirmed the district court's ruling that the defendants' research was not protected by 271(e)(1). The defendants then appealed to the Supreme Court seeking a determination that the research activities conducted by Dr. Cheresh were encompassed by the statutory research exemption of 271(e)(1).
Holding:
The Court held that 35 U.S.C. 271(e)(1) safe harbor (1) applies to and hence no infringement for uses of patented inventions in preclinical studies that are appropriate for submission to the FDA in the regulatory process; (2) is not limited to only preclinical data pertaining to safety of drug in humans; and (3) does not categorically exclude either experimentation on drugs that are not ultimately the subject of an FDA submission or the use of patented compounds in experiments that are not ultimately submitted to the FDA. According to the Supreme Court, that section covers an accused infringer who uses a patented compound in research that if successful would be appropriate to include in a submission to the FDA. Because the Federal Circuit applied a much narrower submissions standard, the Supreme Court remanded.
Analysis:
The question in this case was to determine whether uses of patented inventions in preclinical research, the results of which are not ultimately included in a submission to the FDA, are exempted from infringement by 35 U.S.C. § 271(e)(1). The Supreme Court found the Federal Circuit’s construction of 271(e)(1) to be overly restrictive because it would only protect use of a compound if it is submitted to the FDA. The Supreme Court agreed with the Federal Circuit that 271(e)(1) is not broad enough to protect all experimental activity that may at some distant point in the future be relevant to a submission to the FDA. Instead the Court based its protection from the statute for research reasonably related to submission or FDA approval. Under the reasonably related language, the Court still allowed use of this safe harbor even if the compound was never the subject of a submission to the FDA. The Court reasoned that the trial and error of research on potential drug candidates justified the safe harbor protection for research that ultimately does not pan out and lead to FDA submission. The Supreme Court realized that one of the primary reasons for a drug manufacturer to conduct preclinical experiments is to get a more complete picture of a compound's properties; this allows a drug manufacturer to make the decision to pursue an IND after the manufacturer has better data regarding the properties of the compound. Because a drug manufacturer usually cannot be certain whether a compound will be suitable for an IND until after analyzing the results of the preclinical experiments, a lack of filing with the FDA does not destroy the use of the exemption.
However, this uncertainty does not exist when the research is conducted by a generic drug manufacturer on a compound that has already been approved by the FDA. Consequently, the Federal Circuit's interpretation of 271(e)(1) would force the non-generic drug manufacturer to bear the risk of facing patent infringement liability for conducting preclinical research if that research does not pan out. The Supreme Court concluded that such a rule would limit assurance of exemption from infringement liability to the activities necessary to seek approval of a generic drug. According to the Court, the statute covers more than just experiments necessary for the approval of generic drugs and applies towards non-generic manufactures as well even if the research conducted on the compound is never submitted to the FDA. The Court explained that in 271(e)(1) Congress exempted from infringement all uses of patented compounds reasonably related to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs, not just uses relevant to the approval of generic products. Therefore, it would be incorrect to interpret 271(e)(1) in such a way that limits its protection only to generic drug manufacturers.
Lastly, the Supreme Court expressly refused to give any guidance regarding the status of the use of research tools under the statutory research exemption of 271(e)(1) because Integra never argued the RGD peptides were research tools.
The Supreme Court adopted a three element test to determine if a patent’s use is exempt from infringement under 271(e)(1). First, a defendant attempting to invoke the protection must find a regulatory basis to bring the allegedly infringing research within the safe harbor. Second the defendant must show the allegedly infringing research was performed with the intent to develop a particular drug. Third the defendant must show a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce.
The regulatory basis element would be satisfied if data generated from the infringing research would be the type of data that FDA regulation deems appropriate to include in a submission to the FDA. Here the Supreme Court allowed non safety preclinical to take advantage of the exemption, which Integra argued should not be appropriate under this exemption.
The second element is established if the subjective intent of the infringer is that their infringing research was reasonably related to a submission to the FDA. The Supreme Court did not give much guidance here but as long as the research is done with a specific intent to develop a drug and not just for general research purposes.
The third element requires that the defendant's intent to develop a drug was a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce. This element ties the test for protection to 271(e)(1) by defining reasonably related in terms of what would be reasonable for a scientist to believe the outcome of the potentially infringing research would be. The Court stated that this element would be met when an infringer has a reasonable basis for believing that a patented compound may work to produce a particular physiological effect. This element ensures that only research on compounds about which a significant amount is known has the ability to qualify for protection under 271(e)(1). Research to screen a large number of compounds, or research to discover completely novel uses of old compounds, would probably fail to be protected under 271(e)(1) under the objective element.
Additional Support Provided by Borchardt, James The Journal of Corporation Law, (Summer, 2007)