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High Court Boosts Drug Research

Justices say companies are free to use patented compounds in developing medicines. Analysts say ruling may hurt some biotech firms.

June 14, 2005|David Savage and Denise Gellene | Times Staff Writers

WASHINGTON — The Supreme Court gave a boost to big drug companies Monday, ruling that they are free to use compounds patented by rivals in conducting research on new medicines.

The 9-0 decision, which set aside a lower court ruling, should reduce the costs of developing new drugs, experts in patent law said.

AARP and big pharmaceutical manufacturers -- typically opponents -- hailed the decision. They had told the court they were worried that patents could have been used to delay or block lifesaving medicines.

"It's a big win," said Sarah Lock, a senior attorney with AARP. "Consumers are going to end up saving money."

Pharmaceutical Research and Manufacturers of America, which had filed a friend-of-the-court brief, said the ruling supported "the timely development of new medicines."

But legal experts said the decision was a setback for small research-focused biotech firms that depend on patent licensing fees from larger companies.

"This will diminish the value of those patents. It is quite clear they [justices] have expanded the scope" of a 1984 federal law intended to foster drug development, said Stephen Maebius, a Washington patent lawyer.

That law, intended in part to speed approval of generic medicines, granted a federal exemption from patent laws for research on new medications.

Monday's opinion, which sent the case back to the lower court, all but overturns a $6-million verdict against German drug company Merck, which is different from the U.S. company of the same name. Integra LifeSciences Holding Corp., a New Jersey company, had claimed in a lawsuit that the German company's work on a cancer drug had infringed an Integra patent.

Justice Antonin Scalia, writing for the court, said the lower court erred when it narrowed the exemption to include only clinical trials leading to Food and Drug Administration approval of a drug.

The exemption for research is much broader, Scalia wrote.

"Scientific testing is a process of trial and error," he wrote. "In the vast majority of cases, neither the drug maker nor its scientists have any way of knowing whether an initially promising candidate will prove successful over a battery of experiments. That is the reason they conduct the experiments."

The federal shield for drug research "extends to all uses of patented inventions," Scalia said, so long as the research is "reasonably related to development and submission of any information" to the FDA.

The case involved two prominent scientific institutions, which happen to be located across the street from each other in La Jolla. The dispute revolved around a 1982 discovery made at the Burnham Institute and licensed to Integra. A scientist at Scripps Research Institute carried out Merck's research.

Burnham and Scripps had no comment on the Supreme Court decision. Scripps was not named in the lawsuit.

Merck's lawyer was delighted with the ruling.

"This is enormously protective of pharmaceutical research," said E. Joshua Rosenkranz of New York.

"This says we give researchers a wide berth because we want new drugs to flow toward patients."

Integra's lawyer, Mauricio A. Flores of Irvine, pointed out that the Supreme Court did not rule on the facts of the case but sent it back to the lower court. He predicted that his client would ultimately prevail.

"The court rejected a narrow interpretation of the law ... not advocated by Integra," he said. "We were in the unfortunate position of having [the appeals court] affirm our judgment on grounds we didn't urge and in certain cases didn't agree with."

The law was driven in part by the wish to bring generic drugs to market sooner. If competitors could not use the patented drugs for research and clinical trials, they could not prepare generic versions to be ready when the patent expired. The law gives patent holders 17 years of protection, and the delay for research could add years to that time, Congress was told.

In recent years, the U.S. Court of Appeals for the Federal Circuit, the chief patent court, has interpreted the 1984 law as being concerned only with generic drugs.

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Associated Press was used in compiling this report. Savage reported from Washington and Gellene from Los Angeles.

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