The case of Merck KGaA vs Integra LifeSciences, is at the centre of a debate that has far reaching consequences within the pharmaceutical industry. Merck is accused of infringing a patent it holds on molecules that Merck has been using for research. The German company has argued that a federal law gives them a certain degree of freedom to experiment.
The resulting decision could open the door to large drug companies such as Eli Lilly, Wyeth and Pfizer, who have expressed the desire for greater freedom when developing new drugs. Biotechnology firms however have demanded greater legal protection in the highly competitive industry.
Merck has the support of the Bush administration, which filed a brief stating a decision for Integra would "restrict significantly the development of new drugs."
"A researcher aware of a promising new cure involving a patented invention could not undertake the research necessary to develop the drug."
Integra sued for patent infringement after Merck participated in animal trials for a cancer treatment as part of a ten-year plan towards a marketable therapy. The peptides, or biological molecules, contain a specific amino acid sequence that researchers hope could inhibit tumours.
Merck anticipation of the patent's 2006 expiry date is at the centre of this argument. Did Integra's patent prohibited Merck from beginning research into a new drug, even if it could not be marketed until after the patent expired?
The question is sure to have been raised by pharma CEO's who have been watching this case closely. Merck's justification centres on a Food and Drug Administration (FDA) ruling for trials "reasonably related" to a future drug application. Merck had stated it would promote the innovation of advanced treatments while respecting the rights of the patent holder.
The US Court of Appeal however ruled that the FDA exemption did not extend to initial exploratory research, only later phase human trials involving generic drugs.
In a friend-of-the-court filing, Invitrogen, which develops scientific tools for use in drug research, said that their $26 billion industry would go bankrupt if larger companies are given freedom to poke around their patented work without paying a licensing fee first.
"The patent system, as it presently operates, provides the incentive necessary to fuel the development of innovative and beneficial research tools by granting an inventor the exclusive right to control the use of his invention for a limited time," Invitrogen stated.