Patents Might Not Apply to Research

Patent Law

August / September 2005 By: Mark Baron Volume 3 Number 4

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In a decision widely anticipated by pharmaceutical, biotechnology and medical device industries, the Supreme Court granted drug developers increased latitude in their research activities by broadly interpreting the scope of the statutory exemption from patent infringement for research involving patented compositions for uses reasonably related to the development and submission of information to the Food and Drug Administration.

Directly impacting drug research strategy, the decision clarifies the permitted non-licensed use of patented technology in the drug development process, and continues a Supreme Court trend of broadly interpreting the patent exemption for research related to FDA submissions. Although solely addressing the use of patented compositions, companies with any interest in the FDA regulatory process should be mindful of its implications in formulating intellectual property licensing, enforcement and liability-avoidance strategies.

The case, Merck KgaA v. Integra LifeSciences I, Ltd., revolves around a nexus of events involving five patents owned by Integra Lifesciences and others relating to polypeptides and their uses. After Merck declined to take a license on the patents, the patent owners filed a patent infringement suit against Merck and others, alleging that research funded by Merck infringed the Integra patents.
In its defense, Merck argued that it was exempt from infringement under a provision of the Patent Act that allows research where information is to be submitted to the FDA.

The research involved the use of the patented compositions and methods of inhibiting angiogenesis, the process by which new blood vessels sprout from existing vessels with the hope of reversing cancerous tumor growth. Based on the success of that research, Merck agreed to expand the research to develop angiogenesis inhibitors, which would culminate with submission of an investigational new drug application (IND) to the FDA. The Integra compositions however, were not ultimately chosen for the IND submission. The district and appellate courts ruled in the patent owners' favor finding infringement and no exemption, largely because the research was never submitted to the FDA.

While it is generally an act of patent infringement to make, use, offer to sell or sell any patented invention during the term of the patent without the consent of the patent owner, the question before the Supreme Court was whether research, which was intended to be the subject of an IND but never matured to that stage, is exempt from patent infringement under a statutory exemption. The exemption says, "It shall not be an act of infringement to make, use, offer to sell or sell within the United States or import into the United States 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" (emphasis added).

A federal law requiring submission of information relating to the manufacture, use or sale of drugs is the Federal Food, Drug and Cosmetic Act (FDCA). Under the act, drug manufacturers must request FDA approval to perform human clinical trials by submitting an IND. Further in the drug approval process, the manufacturer must submit a new drug application to the FDA, which includes results of investigations relevant to drug efficacy and safety.

The Supreme Court vacated the federal circuit decision and remanded the case with instructions indicating that Merck's research fell within the exemption.
The court broadly interpreted the scope of the patent infringement exemption to include certain preclinical research and development activities, whether or not ultimately the subject of an FDA submission. "Properly construed, [the exemption] leaves adequate space for experimentation and failure on the road to regulatory approval: 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 the FDCA. The scope of the Merck decision is directed to exempting the use of "patented compounds" in research, but it is worth noting that this same statutory exemption has been previously interpreted to apply to the submission of information needed to obtain premarket approval of medical devices under the FDCA. Extrapolation of the two precedents to expand the scope of the Merck decision may lead to the facile conclusion that the Supreme Court has lessened the value of patents. However, researchers should proceed with extreme caution in reliance on any such sweeping interpretation. The Supreme Court expressly declined to decide whether the exemption is available for use of patented research tools; and medical devices were not the subject of the decision. Dependence on Merck beyond its facts, therefore, could lead to substantial liability.

While the full scope of the Merck decision is yet to be determined, it appears that patent strength has not been significantly altered. The exemption does not permit any purely commercial activity and can not be construed yet to exempt research using patented research tools or medical devices. Entities with patent portfolios in drug research-related technology can continue to derive value from their patents with the ability to license the technology and to prevent infringing commercial activity.

Researchers, however, may institute policies in line with Merck to insulate themselves from liability. Procedures should be installed to require documentation of the intent of the research at its onset. The documentation should demonstrate that the goal of the research is submission of the results to the FDA, that there is a reasonable basis for believing that a patented compound may work by means of a particular biological process to produce a particular physiological effect and that the patented compound is being used in research that, if successful, would be appropriate to include in a submission to the FDA.

Mark Baron is an associate in Kirkpatrick & Lockhart Nicholson Graham LLP's Boston office specializing in intellectual property law. Christine R. Etheridge and Mark R. Leslie also contributed to this article.