Issue 84 | June 16, 2003
Biotechnology Tool Patent Owners
Breathe Sigh of Relief
 A collective sigh of relief was heard from biotechnology tool patent owners on June 6, 2003, when a Federal Circuit panel clarified the scope of the 35 U.S.C. § 271(e)(1) research exemption afforded to infringing activities that occur early in drug development. Integra Lifesciences I, Ltd. V. Merck KgaA, 2003 U.S. App. LEXIS 11335 (Fed. Cir. 2003) ("Integra Lifesciences"). Much concern regarding the scope of this exemption arose following a district court opinion in Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 2001 U.S. Dist. LEXIS 19361 (S.D. N.Y. 2001) ("BMS"), which held exempt under § 271(e)(1) the use of patented compounds to identify drug candidates for further development and submission for regulatory approval. The exemption under § 271(e)(1) was generally presumed to exempt only infringing activities that occurred downstream in the research and development process, close to the point of submission for regulatory approval. The BMS case caused consternation in the industry by holding that infringing activities occurring far upstream of the regulatory process, even before a candidate for regulatory approval had been identified, were exempt.

In Integra Lifesciences, Integra sued Merck for infringement of several patents relating to compounds thought to eliminate tumor growth and for treating a variety of other diseases. A Merck and Scripps Research Institute ("Scripps") partnership had identified three lead compounds and conducted several in vivo and in vitro experiments that Integra alleged infringed their patents; Merck asserted § 271(e)(1) as a defense. The district court held that the Scripps-Merck activity did not fall under the § 271(e)(1) exemption.

In an opinion written by Judge Radar, the Federal Circuit affirmed the district court. The issue before the Court was the meaning of the term "reasonably related" in the statutory language defining the scope of the exemption as those activities conducted "solely for purposes reasonably related to the development and submission of information under Federal law,"

In construing the meaning of "reasonably related," the court referred to legislative history, which stated that the underlying purpose and intended effect of the statute was to permit "a limited amount of testing so that generic manufacturers can establish the bioequivalency of a generic substitute" while at the same time having a de minimus affect on the patentee's rights.

The Court reasoned that the term "reasonably related" tied the exempt activities to the submission of information to the FDA and opined that while infringing activities that enjoy the safe harbor of § 271(e)(1) need not directly produce data that is submitted to the FDA, activities that do not directly produce such data "strain the relationship to the central purpose of the statute." In particular, the Court stated "[t]he FDA has no interest in the hunt for drugs that may or may not later undergo clinical testing for FDA approval." Integra Lifesciences, 2003 U.S. App. LEXIS 11335 at *15. To view it otherwise, the court stated, would vitiate the exclusive rights of a whole class of patentees owning biotechnology tool patents, in direct conflict with the legislative intent that the exempt activity have only de minimis effect on patent owners' rights.

Thus, the reasoning and holding in this case sets a clear limit on how far upstream in the research and development process the § 271(e)(1) exemption reaches. The Federal Circuit has set as a minimum that a clinical drug candidate must have been identified for the exemption to apply, de facto overruling the decision in the BMS case. The area of otherwise-infringing activities that lies between drug discovery and activities that directly generate data submitted to the FDA remains somewhat gray, however, particularly as the activities get closer in time and nature to the identification of the lead candidate.

For a more expansive analysis of this case, click here. For a general discussion of § 271(e)(1), the reader is referred to Noonan, Greenfield, and Zuhn, Paradise Lost: The Uncertain Future of Research Tool Patents, 15 INTELL. PROP. & TECH. L.J. 1 (2003).

For more information on this topic, please contact Michael S. Greenfield (greenfield@mbhb.com) or Kevin E. Noonan (noonan@mbhb.com). Both are partners at the law firm of McDonnell Boehnen Hulbert & Berghoff.

The information contained in this email is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.