Patent Brouhaha Snares Drug Firms

BIOPHARMACEUTICALS

The Supreme Court began hearing arguments last week in a case that tests the limits of an exemption that allows pharmaceutical and biotechnology firms to use each other's tools without infringing biotechnology patents in their quest for new therapies.

It is a case that "may have an adverse effect on [biotech] tool companies and makers of test kits," says John R. Van Amsterdam, a partner in the Boston law firm of Wolf, Greenfield & Sacks. The firm, which specializes in intellectual property matters, has many biotechnology clients "who should be very interested in this case."

Many biotech toolmakers do not want drugmakers to get away without paying licenses on preclinical research, explains Charles E. Miller, a partner in the intellectual property group of Dickstein, Shapiro, Morin & Oshinsky.

Integra Life Sciences, a medical device company, charges that Germany's Merck infringed on patents covering three amino acids and their receptors that mediate cell adhesion. Discovery of the RGD peptide sequence has led to the development of clot-busting drugs to treat heart attack and stroke victims by preventing platelet aggregation. Merck was investigating a drug to inhibit angiogenesis as a means to halt tumor growth and used tests assessing the action of the RGD peptides in the bloodstream.

The discoverer of the sequence, Erkki Ruoslahti, patented the peptide sequence in the mid-1980s while working at the Burnham Institute, San Diego. Coincidentally, he received the Japan Prize in Cell Biology last week for his work on the RGD peptides. Integra ultimately acquired the patents. In the late-1990s, Integra learned that Merck had contracted with David A. Cheresh at Scripps Research Institute to investigate a new Merck drug. Integra offered Merck licenses to its five RGD patents.

Merck insisted that the work at Scripps was covered under the "safe harbor" provisions of the Hatch-Waxman Act of 1984. It exempts developers of new drugs from having to take licenses on patented techniques "solely for uses reasonably related to the development and submission of information under federal law which regulates the manufacture, use, or sale of drugs."

In 1996, Integra filed suit against Merck. In 2000, a jury awarded Integra $15 million in damages. The U.S. Court of Appeals for the Federal Circuit affirmed the lower court's ruling but lowered the award to $6.4 million.

In a brief filed for its appeal to the Supreme Court, Merck argues that any research "directed at developing information relevant to an investigational new drug application should fall under safe harbor."

Integra's brief, however, contends: "This case did not arise from a decision by Merck to perform experiments designed to satisfy FDA regulatory requirements. ... This case arose from Merck's reckless decision to hire [Scripps] to embark on a basic research program for new drugs."