 The U.S. Supreme Court in June delivered a unanimous opinion in Merck KG aA vs. Integra Lifesciences I Ltd. et al. that defined the "wide berth" of the "safe harbor" or exemption from patent infringement granted by Congress under the Hatch-Waxman Act. The safe harbor allows a company to accelerate the development of a product by doing testing with a patented invention - usually the drug or device the second company wishes to market after the patent expires - to do much of the development, animal and human testing necessary to support a marketing application to the FDA. In Merck, the court expanded on the reasoning employed in prior cases and left no doubt that patented inventions could be used by others in virtually any research that might lead to the submission of such a marketing application to FDA for all but new animal drugs and veterinary biological products. The reasoning employed by the court also leads to the conclusion that patented inventions used indirectly in such research may be covered, although that specifically was not decided in the case. The safe harbor legislation the court interpreted is set forth at 35 U.S.C. Section 271(e)(1). It provides that:
"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 (other than a new animal drug or veterinary biological product, as those terms are used in the Federal Food, Drug and Cosmetic Act [FDCA] and the Act of March 4, 1913, which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology or other processes involving site-specific genetic manipulation techniques) 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."
The Request
In the case before the court, a researcher working with Merck used a patented peptide produced by Integra that promoted cell adhesion in an attempt to inhibit angiogenesis, a process where new blood vessels sprout from existing vessels. As described by the court, angiogenesis plays a critical role in solid tumor cancers, diabetic retinopathy and rheumatoid arthritis.
The researcher reached a stage of his work where he made a proposal to Merck to test the peptide - and others produced by Integra - in vitro and in vivo as potential drug candidates. He tested the peptides for three years, in addition to a monoclonal antibody he had developed and organic mimetics.
The peptides were used as positive controls in the latter two tests. Merck then put one of the peptides into the regulatory review process by discussing the research with FDA as well as with the National Cancer Institute (NCI). The court stated that NCI had filed an Investigation New Drug (IND) application for the peptide.
The Rejection
Integra claimed Merck infringed its peptide patents and challenged Merck's defenses on several grounds, including one in which the activities Merck engaged in were within the safe harbor. The court rejected all of the arguments, and in the process defined a broad application of the safe harbor.
First, the court offered a general description of the extent of the exemption from patent infringement provided by Section 271(e)(1). To the court, the provision created "a wide berth" for the use of patented drugs in activities related to the federal regulatory process. Justice Scalia, writing for the court, expanded the wording of the statute by stating that it extends to all uses reasonably related to the development and submission of any information under the FDCA. Section 271(e)(1) does not mention the word "any."
The court went on that the safe harbor extended to preclinical tests of patented inventions "appropriate for submission" to the FDA in the regulatory process. Scalia dispelled any lingering doubts about the testing covered by the exemption: "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 opinion stressed that not only does the exemption cover all phases of testing, it covers all types of tests. Integra had argued that if the exemption applied to preclinical testing, it was only for safety testing. Justice Scalia rejected that argument out of hand.
All data garnered could be relevant, he said, and the language of the FDCA required the submission of most of its data in the application being filed. Moreover, the decision to conduct a clinical trial involved a risk/benefit assessment by the clinician and the review board, and the efficacy and other testing was highly relevant to that assessment.
Integra next contended that the preclinical tests should not be exempt because they were not conducted in conformance with Good Laboratory Practices (GLP). Scalia made short work of that contention: The GLPs applied only to safety tests, and even as to those, if the applicant did not conform, it simply had to provide a brief statement of the reason for noncompliance. The court then answered a number of arguments, the thrust of which was to say that the testing done for Merck should not be exempt because it was not solely for uses reasonably related to the development and submission of information in a submission to FDA. The arguments posed gave the court the opportunity to illustrate just how wide the berth in the safe harbor was for the use of patented inventions:
• It includes experiments on drugs that are not ultimately the subject of an FDA submission and to experiments using patented compounds that are not ultimately submitted to FDA. That must be the case because a company has no way of knowing whether an initially promising compound will prove successful.
• The statute does not relate only to research relevant to filing an application for approval of a generic drug.
• An experiment does not have to be in a submission to FDA to be exempt.
Finally, the court formulated the test for being a reasonably related use covered by the safe harbor as being whether the party conducting the research "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 FDA." Here again, Scalia expanded on the language of the statute that does not mention any reasonable belief test. In the end, the court cited with approval the jury instruction given by the trial judge regarding how to prove that activity came within the safe harbor: "Prove by a preponderance of the evidence that it would be objectively reasonable for a party ... to believe that there was a decent prospect that the accused activities would contribute, relatively directly, to the generation of the kinds of information that are likely to be relevant in the processes by which the FDA would decide whether to approve the product in question."
Combining the language of the jury instruction with the words of Scalia, it would appear that a party could use the patented invention of another in research aimed at obtaining marketing approval for a product if that party has an objectively reasonable basis for believing that there is a decent prospect that the compound being studied would work for the purpose intended. Additionally, if it believed that the use of the invention would contribute, relatively directly, to the generation of information that would likely be relevant and be appropriate to include in a submission, whether it is actually so included or not.
The court did acknowledge that there was a situation where the safe harbor or exemption from patent infringement would not protect a party using another person's patented invention: "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, is surely not 'reasonably related to the development and submission of information' to the FDA."
Wide Indeed
When one examines the language the court used in describing the "wide berth" provided by the exemption, it is difficult to imagine what type of research would not be covered, particularly if the researchers involved are meticulous in documenting their reasoning for pursuing tests of a particular patented invention.
By the time the product to be used has been patented and then made available, a great deal is known about its characteristics and its performance. Starting from that base, our hypothetical researcher would construct and memorialize an argument that - based on what was known of the patented invention - the product should, or even might, be useful in doing "x," and that would be something that might reasonably be included in a marketing submission.
After the testing, it might be that the researcher is proved wrong. That should not matter if he or she had documented a reasonable belief that it would work and lead to the generation of information that might be included in an application. As Scalia said in the opinion: "[E]ven at late stages in the development of a new drug, scientific testing is a process of trial and error. In the vast majority of cases, neither the drugmaker or its scientists have any way of knowing whether an initially promising candidate will prove successful over a battery of experiments. That is the reason they conduct the experiments."
Relatively Simple Steps
So, it would appear that a company could afford itself substantial protection from successful infringement claims by taking relatively simple steps whenever it is proposed to use a patented invention of another in its drug development program. The procedure would highlight the fact that a patented invention was going to be used.
The researchers would then be directed to document their basis for believing that the invention would perform as intended, and why that would be a meaningful step in gathering data for submission of an application such as an IND or a New Drug Application (NDA). The documentation would be reviewed by patent counsel and others in the company before any use began.
If that is done, it should be difficult for the patent holder to prevail, unless the work is general research and the documentation a fabrication.
The testing could relate to any phase of the drug development process because the court made it abundantly clear that there were no restrictions in that regard. The testing would not have to succeed, and the results of the test would not have to be included in a submission.
The main thing the company would have to demonstrate would be that it reasonably believed the data would contribute, "relatively directly," to information that "likely" might be relevant and appropriate for a submission. The court has made the berth very wide indeed, both as to the type of testing and the stage of development when the testing occurs.
What's Left Unanswered
The Merck decision does not resolve all the questions surrounding the application of the safe harbor. There is still the question of how the lower courts will apply the construction of Section 271(e)(1) announced by the court. A number of phrases could be given differing interpretations simply because the words used by the court are somewhat vague.
For example, a researcher documents that he or she reasonably believes that a patented compound would work. It does not. The patent holder claims that there could be no basis to believe it would work for the purpose being tested. The court states that the researcher must "objectively believe," but what does that mean?
Next, what is a "decent prospect" that the research will lead to information that might be included in a submission? How does one decide whether the use of a patented invention contributed "relatively directly" to the generation of information appropriate for a submission? What makes information "likely to be relevant" to a submission?
In the course of making the berth wide, the court used these phrases that are capable of multiple interpretations, many of them fact-based in a particular case. So there could be a Tower of Babel effect.
On the other hand, judges reading what Scalia wrote likely will be struck with the breadth of the decision, and accordingly may err on the side of inclusion within the exemption.
Another issue left specifically unanswered is whether the safe harbor applies to the use of so-called "research tools" - patented equipment and chemicals designed specifically for use in drug research - often with little application outside of the field.
These research tools include such products as sophisticated chemical testing machines and enzymes that manipulate genes and proteins. A company studying a patented invention would use the tools, not to garner information for a submission for approval of the tool, but to facilitate the generation of information on the patented compound itself.
The court, in a footnote, said it was not addressing the issue.
Pushing the Envelope
What will happen if someone pushes the envelope and uses the research tools without paying royalties? Is that an infringement? Certainly the tools have been designed and promoted as a means to facilitate drug research.
Someone accused of infringement could claim that use of the tool would clearly contribute to the generation of information that would be likely to be appropriate for an FDA submission. On the other hand, there is nothing in the statute or the decision to support the idea that Congress intended to make the safe harbor applicable to such research tools. Nobody will know the answer to these questions until a case winds its way to the court.
Finally, is the Merck decision a bold new step by the court to speed drug development and marketing at the expense of the rights of those who have developed and patented innovative products and tools? That would appear to be a stretch.
The court simply applied reason to statutory language that has few limitations written into it. The court said in so many words that if Congress had intended Section 271(e)(1) to be applied narrowly, it could have written it that way. Because it did not, the court would give the words used in Section 271(e)(1) what the court felt to be their plain meaning.
Michael F. Cole is of counsel at Bergeson & Campbell P.C., a Washington, D.C., law firm concentrating on industrial, agricultural and antimicrobial chemical product approval, regulation and defense, medical product approval and regulation, and associated business issues. He can be reached at 202-557-3800.
|
