BNA's Patent Trademark&Copyrigh - Court Holds §271(e)(1) Creates Broad Safe Volume 70 Number 1725 Friday, June 17, 2005Page 198 ISSN 1522-4325 News Supreme Court/Patents Court Holds §271(e)(1) Creates Broad Safe Harbor for Regulatory-Related Use of Patents An exemption from patent infringement "for uses reasonably related to the development and submission of information" to federal regulatory agencies creates a broad safe harbor for the use of patented pharmaceuticals by those with an eye on developing medications that may be the subject of applications with the Food and Drug Administration or other regulatory approval processes, the U.S. Supreme Court ruled unanimously June 13 (Merck KGaA v. Integra Lifesciences I Ltd., U.S., No. 03-1237, 6/13/05). Thus, the court ruled, the exemption applies when a researcher is seeking out new compounds in the hope of identifying possible pharmaceuticals in the near future, and is not limited to situations in which a potential medication has already been identified and is being tested in order to obtain FDA approval. Vacating a ruling by the U.S. Court of Appeals for the Federal Circuit that the safe harbor did not apply because the research in question was merely "general biomedical research to identify new pharmaceutical compounds" and not "clinical testing," the court, in an opinion by Justice Antonin Scalia, said that mere basic research that is not done with the intent of identifying possible candidates for future FDA approval is not covered by the exemption. However, the court said, infringement does not occur merely because the research does not ultimately result in any submissions to the FDA for investigational new drug applications or new drug applications. Furthermore, the court emphasized that the Section 271 exemption is not limited to research for the purposes of FDA applications. The exemption is broad enough to cover research "'reasonably related' to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs." Merck Used Patented Peptides to Find New Drug A scientist at the Scripps Research Institute discovered that blocking the receptors on certain cells inhibits angiogenesis, or new blood vessel generation, thereby showing promise as a means to halt cancerous tumor growth and for treatment of diabetic blindness and other diseases. Merck, a German company formerly affiliated with Merck & Co., hired Scripps to continue their research to try to identify potential drug candidates that might inhibit angiogenesis. Scripps's research, which led to the choice of the cyclic RGD peptide EMD 121974, included tests that assessed the action of the peptides and the proper mode of administering them for optimum therapeutic effect. Integra sued, claiming that this use of their patented RGD peptides constituted patent infringement. A jury handed down a verdict of infringement with regard to four of the Integra patents. Merck claimed the safe harbor under 35 U.S.C. §271(e)(1), which states: It shall not be an act of infringement to ... use ... a patented invention ... 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 or veterinary biological products. Judge James M. Fitzgerald of the U.S. District Court for the Southern District of California determined that the infringement exemption at Section 271(e)(1) did not apply to Merck's use of the RGD peptides. Judge Fitzgerald denied Merck's motion for judgment as a matter of law, and Merck appealed. The Federal Circuit affirmed Judge Fitzgerald's ruling. Integra Lifesciences I Ltd. v. Merck KGaA, 331 F.3d 860, 66 USPQ2d 1865 (Fed. Cir. 2003) (66 PTCJ 200, 6/13/03 ). Several months later, the appeals court issued an errata order, clarifying that it did not rule that the infringement exception was limited to activities related to the approval of generic drugs (67 PTCJ 128, 12/12/03 ). Merck then filed a petition for certiorari with the Supreme Court, asking whether the Federal Circuit erred in ruling that the Section 271 exemption did not apply in this case. Merck argued that its research was intended to produce a drug to eventually be submitted to the FDA for approval and that denying the exemption would delay the availability of the drug for medical treatment (67 PTCJ 465, 3/19/04 ). The Supreme Court heard oral argument April 20 (69 PTCJ 648, 4/22/05 ). Text of Statute Does Not Support Distinction The court vacated the appeals court's holding, removing out the distinction between "clinical" and "pre-clinical" trials for the purposes of the Section 271(e)(1) safe harbor. In reaching this conclusion, Scalia relied heavily on the plain language of the statute, calling 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 Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq., which regulates pharmaceuticals. The words of the statute, Scalia said, do not support the conclusion that pre-clinical studies are different from trials on human subjects, known as clinical studies. The court said: This necessarily includes preclinical studies of patented compounds that are appropriate for submission to the FDA in the regulatory process. There 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 it could be included. The court rejected Integra's argument that the only research of interest to the FDA at the IND submission stage is that pertaining to safety and, thus, only human trials can be seen as "reasonably related" to FDA submissions. The court said: We do not understand the FDA's interest in information gathered in preclinical studies to be so constrained. To be sure, its regulations provide that the agency's "primary objectives in reviewing an IND are ... to assure the safety and rights of subjects," ... but it does not follow that the FDA is not interested in reviewing information related to other characteristics of a drug. ... Moreover, the FDA does not evaluate the safety of proposed clinical experiments in a vacuum; rather, as the statute and regulations reflect, it asks whether the proposed clinical trial poses an "unreasonable risk." ... This assessment involves a comparison of the risks and the benefits associated with the proposed clinical trials. The court noted that in executing such a risk-benefit analysis, the FDA considers the applicant's own analysis of the risks and benefits, which "necessarily includes preclinical studies of a drug's efficacy in achieving particular results." Next, the court rejected Integra's argument that Merck's research here did not qualify because it was not conducted in conformance with the FDA's "good laboratory practices" regulations. The court determined that the good laboratory practices did not apply to preclinical studies and that noncompliant studies are submissible to the FDA so long as the reasons for noncompliance are explained. Advance Knowledge of Success Not Required The court stated that it did not "quibble" with the Federal Circuit's assertion that the exemption "does not globally embrace all experimental activity that at some point, however attenuated, may lead to an FDA approval process." However, the court said, this does not mean that the safe harbor does not apply when the substances being experimented on are not eventually submitted to the FDA for approval. Scalia noted that a researcher cannot know in advance when experiments will succeed in producing a safe and effective pharmaceutical. Otherwise, the court said, the exemption would be "illusory." The key to the exemption is that the experiments are "reasonably related" the FDA submissions, and the court set forth the parameters of this standard: At least where a drugmaker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA, that use is "reasonably related" to the "development and submission of information under ... Federal law." The exemption even applies when the results of a particular experiment are not ultimately submitted to the FDA, the court said. In a footnote, Scalia acknowledged the Federal Circuit's suggestion that limiting the scope of Section 271(e)(1) is necessary to avoid devaluing patents on "research tools." However, the court found no need to address the extent of a research tool exemption under Section 271(e)(1), reasoning that Integra did not argue that its RGD peptides were used as research tools, and "it is apparent from the record that they were not." The court vacated the Federal Circuit's ruling and remanded the case for further proceedings. The text of the court's syllabus and opinion is in the text section and at http://pub.bna.com/ptcj/MercksyllabusJune13.pdf; and http://pub.bna.com/ptcj/MerckopinionJune13.pdf. By Anandashankar Mazumdar _____________________________________________________________________ Contact customer relations at: customercare@bna.com or 1-800-372-1033 ISSN 1522-4325 Copyright © 2005, The Bureau of National Affairs, Inc. 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