Merck v. Integra

Yesterday’s unanimous Supreme Court opinion in Merck v. Integra Lifesciences is a win for science, but may not be a win for Merck.

As for science, the Court takes the following language, from Section 271(e)(1) of the Patent Act:

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 to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs . . . .

(emphasis added)

and gives it the following gloss, which is adapted from the Justice Department’s amicus submission:

We thus agree with the Government that the use of patented compounds in preclinical studies is protected under §271(e)(1) as long as there is a reasonable basis for believing that the experiments will produce “the types of information that are relevant to an IND or NDA.”

(emphasis added)

It seems to me that the interpretation makes the outcome turn on what scientists believe, rather than on what outside observers believe. Generally, I think that’s good for science.

As for Merck, remember that the case now goes back to the Federal Circuit, and remember that the Federal Circuit affirmed the district court on the Section 271(e)(1) issue. The Supreme Court concludes, at the very end of the opinion, that the relevant jury instruction given by the district court is consistent with its “reasonable basis for believing” interpretation of Section 271(e)(1). According to the district court, for Section 271(e)(1) to apply, there must be

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 approve the product in question.

(emphasis added)

Justice Scalia wrote the opinion, and I wonder whether he wrapped things up a bit quickly here. Scalia has long reveled in the close analysis of statutory text and administrative material that forms the centerpiece of the opinion, but he has never been regularly attentive to tying up the loose ends of his interpretations into neat bundles for the courtroom. Did the Court really mean to endorse that “relatively directly” language from the jury instruction, and if so, what does it mean? At trial, the jury found that Merck’s infringement was not immunized by Section 271(e)(1), and the district judge denied a motion to set aside the verdict, on the ground that the evidence was sufficient to show that the connection between the experiments and FDA review “was insufficiently direct.” The Court of Appeals affirmed the district court on this point, using an interpretation of Section 271(e)(1) that the Supreme Court has now concluded was too narrow. If I were Integra’s lawyer, I would be planning to argue to the Federal Circuit, again, that the district court got it right, and that the Supreme Court has agreed. Merck may have won the war, but it may yet lose the battle.

One thought on “Merck v. Integra

  1. I would agree that Merck KGaA did win this battle, but may likely lose the final decision.

    Although a strict constructionist, Justice Scalia did not analyze the word “solely” in 271(e)(1). However, by allowing that the jury instruction in Merck v. Integra was not inconsistent with the Supreme Court decision, Justice Scalia generated a mechanism to re-introduce “solely.” The various acts of Merck were separated in the jury questions, and the jury asked whether each act was reasonably related to FDA submission. The jury found some acts that were not.
    If this approach wins on remand, the scope of the 271(e)(1) exception may not be as broad as some consider.

    Note that the parties in Merck v. Integra had focussed on issues other than those in the Federal Circuit decision. Also, the Supreme Court did not consider that the Federal Circuit decision relied on a clinical/preclinical distinction.

    A separate issue is whether “research tool” patents will fall within the scope of the 271(e)(1) exception. The court did not decide the issue.

    See also, Imagine: No More Indecision in Intellectual Property Cases, Intellectual Property Today, pp. 8-10 (August 2005), available http://www.iptoday.com.

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