Merck KGaA v. Integra LifeSciences

1. Merck KGaA v. Integra LifeSciences Mauricio A. Flores Cathryn Campbell

2. The Plaintiffs • The Burnham Institute: patent owner • Integra LifeSciences: exclusive licensee. www.mwe.com

3. The Plaintiffs’ Technology • Identification of the amino acid sequence RGD as the site where cells attach to the extracellular matrix • Isolated the cellular surface receptors that bind to the RGD site • Identified other RGD-binding cell surface receptors, called “integrins” www.mwe.com

4. U.S. Patent No. 4,792,525 Entitled: TETRAPEPTIDE 8.A substantially pure peptide including as the cell-attachment-promoting constituent the amino acid sequence Arg-Gly-Asp-R wherein R is Ser, Cys, Thr or other amino acid, said peptide having cell-attachment-promoting activity, and said peptide not being a naturally occurring peptide. www.mwe.com

5. The Defendants • Merck KGaA: --Sponsored infringing research at Scripps and infringed by importing RGD peptides • The Scripps Research Institute: --Performed infringing research • Scripps Principal Investigator Dr. David Cheresh: --Performed infringing research www.mwe.com

6. The Trial • 28 trial days • Infringement and validity vigorously contested • Fact issues re FDA Exemption www.mwe.com

7. 35 U.S.C. Section 271(e)(1) NOT “an act of infringement to make use or sell or import into the United States a patented invention . . . 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.” www.mwe.com

8. Instruction to the jury ”To prevail on this defense, [Merck KGaA] must prove by a preponderance of the evidence that it would be objectively reasonable for a party in [Merck’s] and Scripps’ situation 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 to approve the product in question.” Proposed by Integra www.mwe.com

9. Merck’s Evidence • Scientist after scientist testified infringing experiments were: • relevant to safety and efficacy • of various closely related RGD compounds • intended for inclusion in an Investigational New Drug application to the FDA • an essential part of Merck’s drug development program. www.mwe.com

10. Merck had every advantage • Scripps’ reputation in community • No product sales • Sued for trying to cure cancer • Broad standard for FDA Exemption as articulated in jury instruction www.mwe.com

11. Result in the Trial Court • Scripps, Cheresh and Merck found to willfully infringe • Claims against Scripps and Dr. Cheresh dismissed because no damages sought against them • Claims based on infringing acts prior to 1995 dismissed by based on common law exception • $15 million verdict against Merck (later reduced to $6.375 million) www.mwe.com

12. Questions Worth Asking • How could Merck have lost before the jury? • Why didn’t the trial court enter judgment as a matter of law in Merck’s favor based on the testimony of Merck and Scripps scientists? www.mwe.com

13. Answers worth pondering • Credibility: contradictions in sworn testimony • Credibility: admissions re infringing tests • Credibility: admissions that Merck was doing the real FDA work in Germany • Form of Verdict: “Has Defendant Merck KGaA met its burden of proving by a preponderance of the evidence that all of the accused activities are covered by the FDA Exemption?” www.mwe.com

14. Merck Appeals to the Federal Circuit FDA Exemption Claim construction Damages www.mwe.com

15. Merck Argues “Rational Predicate” • Everything in the causal chain of research toward FDA approval is exempt • Integra responds: • not consistent with agreed-upon jury instruction • In effect a general research exemption • Would eviscerate value of research tools www.mwe.com

16. Integra Argues Rule 50, FRCP • Deference to jury assessment of • Weight of evidence • Credibility • Merck responds: • Issue of law not fact www.mwe.com

17. The Federal Circuit Opinion • Ruled that FDA exemption “does not globally embrace all experimental activity that at some point, however, attenuated, may lead to an FDA approval process” • Went on to rely on a narrow interpretation that is inconsistent with the instruction proposed by Integra and given to the jury www.mwe.com

18. The Federal Circuit’s Narrow Interpretation of the FDA Exemption • Should not be interpreted to “encompass drug development activities far beyond those necessary to acquire information” necessary for FDA review of an application to market a generic drug • The FDA has no interest in the hunt for new drugs and does not require information about compounds other than the one featured in an IND application www.mwe.com

19. Judge Newman dissented: • Research should be exempt under either the Common Law Exception or the FDA Exemption. www.mwe.com

20. Merck Petitions Supreme Court for Cert “Cancer. Rheumatoid arthritis. AIDS. Heart disease. Alzheimer’s. Multiple sclerosis. The list could go on for volumes. Deadly diseases, painful disorders, heart wrenching conditions that afflict millions of people. All of them find themselves hoping against hope that someone, somewhere will discover a drug that could cure them or relieve their suffering—and get it to them soon. This case is about how quickly many of those prayers will be answered. The stakes are measurable in millions of lives.” www.mwe.com

21. Merck Before the Supreme Court • Abandoned its rational predicate theory • Focused its attack on the Federal Circuit’s apparent narrowing of the exemption • Asked the Court to review the evidence and enter judgment in Merck’s favor www.mwe.com

22. The Solicitor General Before the Supreme Court • Agreed with the Federal Circuit’s rejection of “rational predicate” • Disagreed with the Federal Circuit’s narrow interpretation of the FDA Exemption • Argued that Merck was entitled to judgment as a matter of law because the exemption applies once drug research “progresses beyond basic research and begins efforts to develop a “particular drug” www.mwe.com

23. Integra Before the Supreme Court • The Federal Circuit did not narrow the scope of the FDA Exemption, but held that the standard articulated in the jury was correct • The evidence, when reviewed under the rules requiring deference to the jury, was sufficient to sustain the judgment for Integra www.mwe.com

24. Amicus: Wyeth and US Merck • Drug development is like a funnel • Blocking at any point stops the flow of new drugs • Virtually every experiment in drug development after a focus on a specific compound is reasonably related to the FDA process www.mwe.com

25. Amicus: PhRMA • The Federal Circuit’s interpretation of FDA Exemption represents a “direct and substantial” threat to drug development www.mwe.com

26. Amicus: BIO • FDA exemption not limited to generic drugs or required regulatory testing • “Reasonably related” inquiry must be fact-specific • And flexible • E.g. exemption should be applied even where infringer does “more” than what FDA requires. www.mwe.com

27. Amicus: Genentech and Biogen Idec • Biologics require even more preclinical testing than new drugs • Important to exempt such tests www.mwe.com

28. Amicus: Applera • Supported Integra • “Solely for uses” means that the sole purpose should be to develop information for the FDA www.mwe.com

29. Amicus: Invitrogen • Supported Integra • Requested ruling that the FDA Exemption does not extend to patented research tools www.mwe.com

30. The Question Presented in Integra “[W]hether uses of patented inventions in preclinical research, the results of which are not ultimately included in as submission to the Food and Drug Administration (FDA), are exempted from infringement by 35 U.S.C. Section 271(e)(1).” www.mwe.com

31. What The Supreme Court Did NOT Decide • Whether activities that infringe biomedical research tool patents may be exempted • Whether the evidence in the record in this case is sufficient to sustain the verdict in Integra’s favor in light of the rules that require deference the jury’s assessment of the weight of the evidence and the credibility of the witnesses www.mwe.com

32. The Supreme Court’s Decision • The FDA exemption extends to any activity that is reasonably related to the processes by which the FDA makes its decision, including: • Preclinical experiments. • Experiments not ultimately submitted to the FDA. • Experiments on compounds not submitted to the FDA. • Experiments that do not comply with Good Laboratory Practices. • The FDA is concerned with efficacy as well as safety at the preclinical stage. www.mwe.com

33. The Supreme Court’s Decision • The instruction proposed by Integra and given to the jury is not inconsistent with its decision. • Remanded to the Federal Circuit for review the sufficiency of the evidence www.mwe.com

34. Reasonably Related is a flexible concept “Properly Construed, Section 272(e)(1) leaves adequate space for experimentation and failure on the road to regulatory approval: At least where a drug maker has a reasonable basis for believing that a patented compound may work, through a particular 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.” www.mwe.com

35. The Bottom Line • Reasonable means Reasonable – no categorical exclusions or bright line rules • The standard is broad enough so that any company whose witnesses provide a straightforward, credible account of how their activities relate to the FDA process is likely to get the benefit of the exemption www.mwe.com

36. The Bottom Line But the exemption is not a talisman; the party claiming the benefit of the exemption will be required to produce a careful explanation from credible witnesses. www.mwe.com

37. A Carve-Out for Research Tools? The Solicitor General stated: • “The context of Section 271(e)(1) suggests that Congress may not have intended to include research tools within the scope of affected inventions.” • “Including research tools that are used only in experimentation within the scope of Section 271(e)(1) could adversely impact the only exclusive right that exists with respect to such tools – the right to use them in research.” www.mwe.com

38. Defining the Carve-Out An exception to the definition of a “patented invention” ? Based on the use of a patented invention? www.mwe.com

39. Consider Protective Provisions • Reps and warranties • Obligation for sponsor to monitor patents and seek licenses • Indemnification • Sponsor to lead the defense, but institution to receive separate representation www.mwe.com

40. Thank you Mauricio A. Flores mflores@mwe.com Cathryn Campbell ccampbell@mwe.com www.mwe.com