Darmstadt, Germany, June 15, 2005 – LAWFUEL – The Law News Network – After a nine-year legal dispute, Merck KGaA of Darmstadt, Germany, won its appeal to the US Supreme Court. The highest court in the United States ruled June 13 that pharmaceutical companies have the right to use inventions developed by other companies without infringing patents if the use is reasonably related to a drug-approval application. The high court ruled that it is not necessary to pay for use of the technology or wait for years until the patent runs out.
“We are naturally pleased with the ruling and feel it is a victory not only for Merck but also for patients waiting for better treatments for cancer and other illnesses and for the whole biotech and pharmaceutical industry,” said Bernhard Scheuble, chairman of Merck KGaA.
All nine US Supreme Court justices agreed with Merck’s argument that the 1984 US Drug Price Competition and Patent Term Restoration Act (commonly called the Hatch-Waxman Act) did not apply to just generic drug companies who use proprietary research to prepare their products for launch as soon as patents expire on branded pharmaceuticals. In addition, the justices ruled, the law applies to clinical studies and even to testing in animals and test-tube experiments in the pre-clinical phase when the intent is to ultimately seek US Food and Drug Administration approval for the product.
Writing for the court, Justice Antonin Scalia said: “At least where a drugmaker 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.”
The case involves a dispute between Merck KGaA and Integra LifeScience Corp. of Plainsboro, New Jersey. The patents in question covered a class of peptides developed in the 1980s by Burnham Institute of La Jolla, California. Integra later bought the rights to the peptides. In the late 1980s, Merck hired scientists at Scripps Research Institute, also in La Jolla, to advance research on similar peptides to develop a method for blocking the blood supply, and thus the growth potential, for cancerous tumors.
In 1996, the Burnham Institute sued Merck and Integra joined the suit when it acquired Burnham’s peptide patents. Initially, a jury awarded Integra $15 million, which later was reduced to $6.4 million. Merck appealed, eventually to the US Supreme Court.
The Supreme Court returned the case, along with its broader interpretation of the Hatch-Waxman Act, to the lower court for a final ruling on the facts.
The drug that resulted from the further investigation of the peptides, Cilengitide, is being co-developed by Merck and the US National Cancer Institute. This so-called angiogenesis inhibitor is in Phase II clinical trials for the treatment of glioblastoma, an aggressive form of brain tumor. Cilengitide has received orphan-drug status in both the United States and the European Union because of the lack of adequate treatments for this deadly form of cancer. Cilengitide is expected to reach market after the Integra patents expire.
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Merck is a global pharmaceutical and chemical company with sales of EUR 5.9 billion in 2004, a history that began in 1668, and a future shaped by 28,500 employees in 52 countries. Its success is characterized by innovations from entrepreneurial employees. Merck’s operating activities come under the umbrella of Merck KGaA, in which the Merck family holds a 73% interest and free shareholders own the remaining 27%. The former U.S. subsidiary, Merck & Co., has been completely independent of the Merck Group since 1917.