United States: Merck v. Integra: The Supreme Court Holds That the § 271(e)(1) Safe Harbor Extends to Preclinical Studies

On June 13, 2005, the Supreme Court of the United States issued the landmark decision Merck KGaA v. Integra Lifesciences I, Ltd ¹ In a unanimous opinion, the Court broadly interpreted the scope of the safe harbor provision, 35 U.S.C. § 271(e)(1), which creates an exemption from patent infringement for use of 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." The Court held that the exemption extends to preclinical studies of patented compounds that are appropriate for submission to the FDA in the regulatory process. This includes both preclinical data pertaining to the safety of drugs in humans, and preclinical studies related to a drug’s efficacy, mechanism of action, pharmacology, and pharmacokinetics.

The Court vacated a decision by the Federal Circuit, which had limited the § 271(e)(1) exemption to research activities that supply information for submission to the FDA. The Court opined that the exemption does not categorically exclude either experimentation on drugs that are not ultimately the subject of an FDA submission or use of patented compounds in experiments that are not ultimately submitted to the FDA. Nevertheless, the Court acknowledged that the scope of § 271(e)(1) does not include all experimental activity that at some point, however attenuated, may lead to an FDA approval process. It does not cover basic research that is not done with the intent of identifying possible candidates for future FDA approval. The Court also specifically declined to address the question whether the safe harbor could extend to allow use of patented research tools in drug development.

Integra involves a short tripeptide segment of fibronectin (the "RGD peptide") that mediates interaction between fibronectin and a cell surface receptor integrin during angiogenesis, a process essential for tumor growth. In the late 1980s, Dr. David Cheresh at the Scripps Research Institute ("Scripps") discovered that blocking integrin receptors on the cell surface inhibits angiogenesis, thereby showing promise in cancer therapy. In 1988, Merck KGaA ("Merck", a German company unrelated to Merck & Co. in the United States) entered into an agreement with Scripps to fund research for identifying potential drug candidates that might inhibit angiogenesis. This research led to the discovery of a cyclic RGD peptide (EMD 66203) as a potential drug candidate. In 1995, Merck and Scripps entered into a second agreement to fund the "necessary experiments to satisfy the biological bases and regulatory (FDA) requirements for the implementation of clinical trials" with EMD 66203, or a derivative thereof². The agreement contemplated commencing clinical trials with a drug candidate within three years. From 1995 to 1998, Scripps scientists conducted several in vivo and in vitro experiments on EMD 66203 and two other closely related cyclic RGD peptides. The tests measured the efficacy, specificity, and toxicity of the cyclic RGD peptides as angiogenesis inhibitors, and evaluated their mechanism of action and pharmacokinetics in animals. An Investigational New Drug ("IND") application for one of the cyclic RGD peptides, EMD 121974, was filed with the FDA in 1998.³

In July 1996, Integra Lifesciences I, Ltd. ("Integra"), owner of several patents on RGD peptides, sued Merck for patent infringement.⁴ Merck responded that its work with Scripps fell under the § 271(e)(1) safe harbor. At trial, the jury found Merck liable for patent infringement, and further that Merck had failed to show that its post-1995 activities were exempted by § 271(e)(1).⁵ In a post-trial motion, the district court denied Merck’s motion for judgment as a matter of law, reasoning that there was sufficient evidence to support the jury’s finding on the § 271(e)(1) issue. Merck appealed.

A divided panel of the Federal Circuit affirmed the district court’s finding of liability.⁶ The court held that the § 271(e)(1) safe harbor does not reach back down the chain of experimentation to embrace any exploratory research that may rationally be a predicate for future FDA clinical tests. Because the Scripps work was "not clinical testing to supply information to the FDA, but only general biomedical research to identify new pharmaceutical compounds," the court found that the safe harbor does not apply. The court reasoned that the FDA had no interest in the "hunt" for drugs that may or may not later undergo clinical testing for FDA approval.⁷ The court also reasoned that if the safe harbor exemption were expanded to include Merck’s activities, it would "effectively vitiate the exclusive rights of patentees owning biotechnology research tool patents." ⁸

The Supreme Court granted certiorari on the issue of "whether uses of patented inventions in preclinical researches, the results of which are not ultimately included in a submission to the Food and Drug Administration (FDA), are exempted from infringement by 35 U.S.C. § 271(e)(1)."⁹ In a unanimous opinion written by Justice Scalia, the Supreme Court vacated the decision by the Federal Circuit and ruled that the § 271(e)(1) safe harbor extends to preclinical studies of patented compounds that are appropriate for submission to the FDA.

At the outset, the Court stated that the statute provides a wide berth for the use of patented drugs in activities related to the federal regulatory process. The Court found it apparent from the statutory text that the exemption extends to "all uses of patent inventions that are reasonably related to the development and submission of any information under the [Food, Drug, and Cosmetic Act]."¹⁰ The Court indicated that there was simply no room in the statute for excluding certain information from the exemption on the basis of either 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 information that is of interest to the FDA at the IND submission stage is information pertaining to the safety of the drug in humans, finding that the FDA’s interest in information gathered at the preclinical stage is not so constrained. The Court reasoned that, although the regulation provides that the agency’s "primary objectives in reviewing an IND are . . . to assure the safety and rights to subjects," the evaluation cannot be carried out in a vacuum, but rather requires comparison of the risks and benefits associated with the proposed clinical trials. This, according to the Court, would necessarily include a review of preclinical studies of a drug’s efficacy in achieving particular results.

The Court further rejected Integra’s argument that § 271(e)(1) should not apply because the experiments in question were not conducted in conformity with the FDA’s "good laboratory practice" regulations. The Court reasoned that the good laboratory practice regulations apply only to experiments on drugs to determine their safety, not to preclinical studies on a drug’s efficacy, mechanism of action, pharmacology, or pharmacokinetics. The Court further indicated that even noncompliant safety-related studies are submissible to the FDA, so long as the reason for noncompliance is provided.

The Court stated that it did not "quibble" with the Federal Circuit’s assertion that the § 271(e)(1) exemption "does not globally embrace all experiment activities that at some point, however attenuated, may lead to an FDA approval process."¹¹ It added that basic research on a particular compound, performed without the intent to develop a particular drug or without a reasonable belief that the compound will cause the sort of physiological effect that the researcher intends to induce, would not fall under the safe harbor. On the other hand, the Court held that the § 271(e)(1) safe harbor is not categorically inapplicable to either (1) experimentation on drugs that are not ultimately the subject of an FDA submission, or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA. The Court reasoned that, in reality, even at late stages in the development of a new drug, scientific testing is a process of trial and error. Thus, to construe § 271(e)(1) as the Federal Circuit did is to effectively limit assurance of exemption to the activities necessary to seek approval of a generic drug, since this is the only situation where one can know at the outset that a particular compound will be the subject of an eventual application to the FDA. Similarly, the Court pointed out that it is not always clear to parties setting out to seek FDA approval exactly what kinds of information will be required in order to gain FDA approval.

The Court held that the term "reasonably related" in the statute should be broadly interpreted, and discussed how to determine whether use of a patented compound is reasonably related to the development and submission of information to the FDA:

Properly construed, § 271(e)(1) leaves adequate space for experimentation and failure on the road to regulatory approval: At least 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, 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." § 271(e)(1).¹²

The Court stated that the standard set forth in the jury instruction at the trial of this case was consistent with the Court’s construction of the statute, and remanded the case for a determination of sufficiency of the evidence supporting a jury’s finding of no § 271(e)(1) exemption.

In a footnote, the Court declined to address the issue of research tools. The Court stated that Integra had "never argued the RGD peptides were used at Scripps as research tools, and it is apparent from the record that they were not."¹³ Accordingly, the Court found it unnecessary to express a view about "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."¹⁴

The Supreme Court has clarified that the § 271(e)(1) safe harbor protection is not limited to research conducted in clinical trials, and may encompass preclinical studies. The Court further clarified that the preclinical studies that can be exempt under § 271(e)(1) may include both preclinical data pertaining to the safety of drugs in humans and studies related to a drug’s efficacy, mechanism of action, pharmacology, and pharmacokinetics. The fact that preclinical studies are not conducted under "good laboratory practices" set forth in the FDA’s regulations does not disqualify the activities from the safe harbor exemption. The Court also ruled that experimentation on drugs that are not ultimately the subject of an FDA submission, or use of patented compounds in experiments that are not ultimately submitted to the FDA, may be exempt under § 271(e)(1), as long as there is a reasonable basis to believe that the experiment will produce the type of information that is relevant to an FDA submission.

The Court acknowledged that, at some point, the relationship between the experimental activities and the FDA approval process may be too attenuated to warrant an exemption under § 271(e)(1). It has not, however, provided guidance as to how far upstream in the research and development process § 271(e)(1) reaches.

Interestingly, prior to Integra, courts had generally interpreted § 271(e)(1) broadly, finding that lots of activities fall under the safe harbor.¹⁵ One court, for example, had held that preclinical studies that do not produce information for FDA submission are exempt under § 271(e)(1).¹⁶ The Southern District Court of New York in Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc. had gone even further, holding that uses of patented intermediates in screening for new drug candidates were protected by the safe harbor.¹⁷ The Federal Circuit in Integra, for the first time, sought to reverse the trend of broadly interpreting the statute, by placing a limit on the safe harbor.¹⁸ Now that the Supreme Court has vacated the Federal Circuit’s decision, future courts encountering the issue will be left with little guidance as to the outer boundary of the § 271(e)(1) safe harbor.¹⁹

The Court explicitly declined to address the question of whether use of research tools can be protected by the § 271(e)(1) safe harbor. By its terms, § 271(e)(1) applies only to use of "a patented invention." Various amicus briefs filed with the Court, including the Solicitor General’s brief, suggested that patented research tools do not fall within the scope of § 271(e)(1) because they are not "patented inventions" within the meaning of the statute. Notably, although the Court did not express an opinion on the meaning of "patented invention" in the statute, it focused primarily on the situation where the patented invention used by the alleged infringer is the actual or potential subject of FDA regulatory review. Thus, one could certainly argue that, after Integra, § 271(e)(1) remains inapplicable to the use of patented research tools, because most research tools are used as tools to study or develop other compounds for FDA regulatory review, rather than being the subject of FDA regulatory review themselves. This is consistent with the longstanding views of most in the scientific and legal community and with the Solicitor General’s suggestion in its amicus brief. Indeed, even Merck acknowledged in its brief to the Court that "it is not at all clear that use of the research tool would be exempt."²⁰

Finally, and curiously, although the Court seems to have relied heavily on the statutory text of § 271(e)(1), it has given no effect to the term "solely," which occupies a central place in the statute.²¹

Section 271(e)(1), which is part of the 1984 Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Act, was originally designed to expedite FDA approval of generic versions of patented drugs by allowing generic drug manufacturers to perform developmental work and bioequivalency testing prior to patent expiration.²² Despite this narrow legislative intent, courts prior to Integra had broadly interpreted the statute. The Supreme Court in Integra confined its decision to correcting the Federal Circuit’s erroneously narrow interpretation of the safe harbor. The Supreme Court has not delineated the contours of the safe harbor. It thus remains to be seen how future courts will define the reach of § 271(e)(1) following Integra.

Footnotes:

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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