United States: The Effect of the Supreme Court’s Decision in Merck KGaA v. Integra Lifesciences I, Ltd. on the §271(e)(1) Safe Harbor to Patent Infringement

On June 13, 2005 the Supreme Court issued its decision in Merck KGaA v. Integra Lifesciences I, Ltd., No. 03-1237, 545 U.S. ___ (June 13, 2005). The decision addresses whether uses of patented inventions in preclinical research are exempted from infringement by 35 U.S.C. §271(e)(1) when the results of the preclinical research are not ultimately included in a submission to the Food and Drug Administration (FDA). The Court’s opinion discusses the relationship between the §271(e)(1) exemption and requirements for preclinical testing imposed by the FDA. The Court’s decision is likely to have a substantial effect on both research and development using patented inventions and the patent holders of such inventions.

In the underlying action, Integra accused Merck of infringing five patents relating to the RGD peptide by having conducted tests to measure the efficacy, specificity, and toxicity of certain RGD peptides as angiogenesis inhibitors. Merck claimed these tests fell within the exemption afforded by §271(e)(1). Merck lost this issue in the trial court, and appealed to the Court of Appeals for the Federal Circuit (Federal Circuit).

In a somewhat surprising decision, the Federal Circuit rejected the exemption defense, ruling that §271(e)(1) is limited to activities directly related to the submission of data to the FDA.

The Supreme Court vacated the Federal Circuit’s decision. In doing so, the Supreme Court acknowledged that §271(e)(1) grants "a wide berth for the use of patented drugs in activities related to the federal regulatory process." And, contrary to previous Federal Circuit decisions, the Supreme Court held that §271(e)(1)’s research exemption applies to "all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA." This includes:

• Preclinical studies of patented compounds that are appropriate for submission to the FDA in the regulatory process.

• Any tests that are intended to produce the types of information that are relevant to an investigatory new drug application (IND) or a new drug application (NDA) such as pharmacological, toxicological, pharmacokinetic, and biological quantities of the drug in animals, safety related experiments and preclinical studies of a drug’s efficacy in achieving particular results.

• Research on a patented compound that, if successful, would be appropriate to include in a submission to the FDA, where a drug maker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect.

While the Supreme Court’s decision recognizes a broader §271(e)(1) exemption than under the Federal Circuit’s previous ruling, the Court noted that §271(e)(1) does not embrace all experimental activity, even if at some point that activity might lead to an FDA submission. The Court noted, as an example, that the exemption does not cover basic scientific research on a particular compound, performed without the intent to develop a particular drug or a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce.

The Merck decision offers potentially expansive protection for testing patented drugs and medical devices for specific uses. At the same time, the decision limits the enforcement options available to patent holders when they become aware of potentially infringing activity. For example, upon learning of otherwise infringing uses of patented compounds in drug discovery processes, patentees may be limited to seeking redress solely from manufacturers or distributors of the compounds, as opposed to seeking redress from the ultimate users of the compounds.

Following Merck, the key inquiry focuses on distinguishing between researchers who are using a patented compound to develop a specific product or cause a desired physiological effect that may be the subject of a future submission to the FDA (conduct protected by §271(e)(1)), and researchers who are testing the general properties and capabilities of the patented compound in a manner wholly unrelated to FDA submissions (conduct that constitutes patent infringement).

To take advantage of §271(e)(1) post-Merck, R&D companies would be well-advised to (1) create documentation prior to testing that evidences a reasonable basis for believing a compound or device will produce a particular physiological effect through a particular biological process, and (2) conduct tests that will produce information that could be submitted (regardless of whether or not it actually will be submitted), or used to develop information that could be submitted, to the FDA.

In the post-Merck world, patent holders should focus investigative efforts on determining the intent behind a potential infringer’s use of a patented compound as well as on identifying any data accumulated by the potential infringer. That information will be key to determining whether otherwise infringing activities are protected by §271(e)(1).

Patent owners will certainly argue that §271(e)(1) does not cover general fishing expeditions where researchers are experimenting with patented products to find unknown, unspecified uses. However, Merck does not prohibit researchers from using results of research tests intended for the development of a specific drug as the basis for developing a different drug. This suggests that in some cases, researchers may obtain knowledge that provides a reasonable basis for believing a patented compound will produce a given result beyond what could be reasonably inferred without any prior testing.

Finally, for those who hold patents that cover "research tools," or researchers who intend to use patented tools, the Supreme Court’s ruling in Merck provides no clear guidance. The Merck decision, by its own admission, does not address "whether, or to what extent, §271(e)(1) exempts from infringement the use of ‘research tools’ in the development of information for the regulatory process." Thus, some caution should be taken before accepting that "all uses of patented compounds" reasonably related to the submission of information to the FDA are exempted from infringement under §271(e)(1). Nor should anyone assume that sales of research tools to those engaged in drug discovery are automatically exempted from infringement under §271(e)(1). The Supreme Court has reserved those issues for another day.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.