Merck KGaA v. Integra Lifesciences I, Ltd. (2005)

Merck v. Integra: The Supreme Court Misses A Golden Opportunity

    By Kevin Noonan --

The Supreme Court missed an opportunity to bring some certainty to the law concerning the scope of the "safe harbor" provisions of 35 U.S.C. § 271(e)(1) in its recent decision in Merck KGaA v. Integra Lifesciences I, Ltd., which was decided June 13, 2005.

The case involved a patent infringement lawsuit against Merck for using Integra's technology.  Specifically, Merck developed new antitumor agents from "RGD" peptides that inhibit angiogenesis.  The Federal Circuit affirmed the District Court's decision that the work did not fall within the § 271(e)(1) safe harbor because it was not "reasonably related" to obtaining regulatory approval as required by the statute.  The Federal Circuit stated that Merck's work was too far "back down the chain of experimentation" leading to the discovery of new drugs to fall within the scope of the exemption.

The Supreme Court disagreed.  The Court found no statutory basis for making a distinction between preclinical and clinical activities.  The Court held that the plain wording of the statute made it "apparent" that the exemption "extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the Food, Drug and Cosmetic Act]."  The Court asserted that "[t]here is simply 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 is could have been included."

The consequences of the Supreme Court's decision favor neither small biotech companies nor innovator pharmaceutical companies.  As construed by the Court, whether any particular activity falls within the § 271(e)(1) safe harbor will depend on the reasonableness of the relationship between the infringing activity and the development of information for submission to the FDA.  Thus, every activity using a patented compound will have been done (in retrospect) "with the intent to develop a particular drug," and the safe harbor's availability will decrease any incentive to license third party technology.  The profits from any such drug will provide ample incentive to litigate for small biotech companies whose compounds are used in drug development.  Unless Congress acts to better define the scope of § 271(e)(1), it is safe to predict that the Supreme Court's Merck decision will provoke more litigation involving the permissible use of patented technology in drug development.

Merck KGaA v. Integra Lifesciences I, Ltd. (2005)
Opinion by Justice Scalia

A more thorough discussion of this topic can be found in Dr. Noonan's article in the Fall 2005 issue of The Patent Lawyer.