Source: http://openjurist.org/331/f3d/860/integra-lifesciences-ltd-v-merck-a
Timestamp: 2015-08-04 11:59:45
Document Index: 659183739

Matched Legal Cases: ['§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 1295', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271']

331 F3d 860 Integra Lifesciences Ltd v. Merck a | OpenJurist
331 F. 3d 860 - Integra Lifesciences Ltd v. Merck a Home
331 F3d 860 Integra Lifesciences Ltd v. Merck a 331 F.3d 860
INTEGRA LIFESCIENCES I, LTD. and The Burnham Institute, Plaintiffs-Cross Appellants, andTelios Pharmaceuticals, Inc., Plaintiff-Appellee,v.MERCK KGaA, Defendant-Appellant, andThe Scripps Research Institute and Dr. David A. Cheresh, Defendants.
No. 02-1052.
No. 01-1065.
Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for defendant-appellant Merck KGaA. With him on the brief were Thomas H. Jenkins, David A. Manspeizer, and Rachel H. Townsend. Of counsel on the brief were M. Patricia Thayer, Heller Ehrman White & McAuliffe, LLP, of San Francisco, CA; and William C. Rooklidge, Howrey Simon Arnold & White, LLP, of Irvine, CA. Of counsel was Esther H. Lim, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC.
Mauricio A. Flores, Campbell & Flores LLP, of San Diego, CA, argued for plaintiffs-cross appellants Integra LifeSciences I, Ltd. and The Burnham Institute. With him on the brief was David M. Beckwith. Of counsel on the brief were Raphael V. Lupo, Mark G. Davis, and Natalia V. Blinkova, McDermott, Will & Emery, of Washington, DC. Of counsel was Donna M. Tanguay.
Opinion for the court filed by Circuit Judge RADER. Concurring-in-part, dissenting-in-part opinion filed by Circuit Judge PAULINE NEWMAN.
Following a jury trial, the United States District Court for the Southern District of California ruled that Merck KgaA (Merck) infringed U.S. Patent Nos. 4,988,621 ('621 patent), 4,792,525 ('525 patent) 5,695,997 ('997 patent), 4,879,237 ('237 patent), and 4,789,734 ('734 patent), belonging to Integra Lifesciences I, Ltd., the Burnham Institute and Telios Pharmaceuticals, Inc.1 (Integra). The district court held that subsection (e) of 35 U.S.C. § 271 did not immunize Merck against liability for infringement of the '525, '237, '997, and '734 patents. See 35 U.S.C. § 271(e)(1) (2000). The district court, however, granted Merck's motion for summary judgment of invalidity of claim 2 of the '621 patent. Integra LifeSciences I Ltd. v. Merck KGaA, 50 USPQ2d 1846, 1850, 1999 WL 398180 (S.D.Cal.1999). The jury awarded a reasonable royalty of $15,000,000. Because the district court correctly construed the claims and determined that Merck's infringing activity did not fall within the safe harbor of § 271(e), this court affirms those aspects of the district court's order. Because substantial evidence does not support the jury's reasonable royalty award, however, this court remands for further consideration of damages.
Integra owns the '621, '525, '997, '237, and '734 patents, all of which are related to a short tri-peptide segment of fibronectin having the sequence Arg-Gly-Asp (in single-letter notation, referred to as the "RGD peptide"). The RGD peptide sequence promotes cell adhesion to substrates in culture and in vivo. The RGD sequence promotes this beneficial cell adhesion by interacting with &#945;v&#946;3 receptors on cell surface proteins called integrins. In sum, the RGD sequence attaches to the &#945;v&#946;3 receptors on the surface of cells. This bond adheres the cells to the substrate containing RGD. In theory, inducing better cell adhesion and growth should promote wound healing and bio-compatibility of prosthetic devices. In addition, blood vessels grow new branches due to controlled interactions with integrins.
Dr. David Cheresh, a scientist at Scripps, discovered that blocking &#945;v&#946;3 receptors inhibits angiogenesis, the process for generating new blood vessels. Inhibiting angiogenesis showed promise as a means to halt tumor growth by starving rapidly dividing tumor cells. Similarly, anti-angiogenic therapies might also treat diabetic retinopathy, rheumatoid arthritis, psoriasis, and inflammatory bowel disease.
Merck recognized the importance of Dr. Cheresh's discovery, and hired Scripps and Dr. Cheresh to identify potential drug candidates that might inhibit angiogenesis. Dr. Cheresh's research showed that cyclic peptide EMD 66203 displayed good inhibition of &#945;v&#946;3 receptors. Merck then entered into an agreement with Scripps to fund the "necessary experiments to satisfy the biological bases and regulatory (FDA) requirements for the implementation of clinical trials" with EMD 66203 or a derivative thereof. The agreement contemplated commencing clinical trials with a drug candidate within three years.
Scripps' research led to the discovery of EMD 85189, and then EMD 121974-both derivatives of EMD 66203. Scripps scientists conducted several in vivo and in vitro experiments "to evaluate the specificity, efficacy, and toxicity of EMD 66203, 85189 and 121974 for various diseases, to explain the mechanism by which these drug candidates work, and to determine which candidates were effective and safe enough to warrant testing in humans." In particular, these tests assessed the action of the cyclic RGD peptides, including the histopathology, toxicology, circulation, diffusion, and half-life of the peptides in the bloodstream. These tests also examined the proper mode of administering the peptides for optimum therapeutic effect. In 1997, the Scripps research team chose EMD 121974 as the best candidate for clinical development.
Integra learned of the Scripps Merck agreement. Believing the angiogenesis research was a commercial project that infringed its RGD-related patents, Integra offered Merck licenses to the patents-in-suit. After lengthy negotiations, Merck declined. Integra then sued Merck, Scripps, and Dr. Cheresh. Merck answered that its work with Scripps falls under the safe harbor afforded by 35 U.S.C. § 271(e)(1). Merck also contended Integra's patents were invalid. Before trial, Integra limited its request for monetary damages to Merck's alleged infringement, and sought only a declaratory judgment against Scripps and Cheresh. After the close of all evidence, the district court granted Scripps' and Dr. Cheresh's motion to dismiss Integra's claim for declaratory judgment.
At trial, the jury found Merck liable for infringing the '525, '997, '237, and '734 patents. The district court determined that the exemption of § 271(e)(1) did not embrace the infringing activity between 1994 and 1998.2 The district court, however, granted Merck's summary judgment motion on claim 2 of the '621 patent. The district court invalidated this claim based on anticipation by a 1984 Nature article. The parties filed various post-trial motions. In particular, Merck filed motions for JMOL before and after jury deliberations, asserting, inter alia, that the accused experiments were exempt from infringement under 35 U.S.C. § 271(e)(1); that Integra did not prove infringement of any patents; and that substantial evidence did not support the damages award. The district court denied Merck's motions.
Merck timely appeals, asserting error in the district court's interpretation of § 271(e)(1), in claim construction, and in the refusal to reconsider the amount of the damages award. Integra cross-appeals the denial of its motion for declaratory judgment of infringement by Scripps and Dr. Cheresh, the invalidity finding on the '621 patent, and the court's refusal to enhance the damages award. This court has exclusive jurisdiction. 28 U.S.C. § 1295(a)(1) (2000).
This court reviews statutory interpretation without deference. Vectra Fitness, Inc. v. TNWK Corp., 162 F.3d 1379, 1381, 49 USPQ2d 1144, 1146 (Fed. Cir.1998). Similarly, this court reviews claim construction without deference. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456, 46 USPQ2d 1169, 1172 (Fed. Cir.1998) (en banc). Determining a reasonable royalty is an issue of fact, which this court reverses only in the absence of substantial evidence. Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 517, 36 USPQ2d 1540, 1544 (Fed.Cir.1995); Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1240-41, 9 USPQ2d 1913, 1924 (Fed. Cir.1989). Finally, this court reviews the denial of JMOL following a jury verdict without deference. SIBIA Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349, 1354, 55 USPQ2d, 1927, 1930 (Fed. Cir.2000).
35 U.S.C. § 271(e)(1) defines a safe harbor against patent infringement:
This provision entered title 35 in 1984 as part of the Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, 98 Stat. 1585 (1984) (the 1984 Act). The 1984 Act had two purposes. In the first place, the 1984 Act sought to restore patent term to pharmaceutical inventions to compensate for the often-lengthy period of pre-market testing pending regulatory approval to sell a new drug. These regulatory delays can deprive a patentee of many years of its patent's term. The second reason for the 1984 Act responded to this court's decision in Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858, 221 USPQ 937 (Fed.Cir.1984). Specifically, the Act sought to ensure that a patentee's rights did not de facto extend past the expiration of the patent term because a generic competitor also could not enter the market without regulatory approval. See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 669-70, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). Thus, the 1984 Act permitted those competitors to conduct experiments in advance of the patent expiration as long as those activities were reasonably related to securing regulatory approval. As previously noted by this court, "[s]ection 271(e) permits premarket approval activity conducted for the sole purposes of sales after patent expiration." Hoechst-Roussel Pharms., Inc. v. Lehman, 109 F.3d 756, 763, 42 USPQ2d 1220, 1226 (Fed.Cir.1997).
The House Committee that initiated this provision expressly described the pre-market approval activity as "a limited amount of testing so that generic manufacturers can establish the bioequivalency of a generic substitute." H.R.Rep. No. 857, at 8, reprinted in 1984 U.S.C.C.A.N. at 2692. The Committee further characterized the limits of this provision, noting that the "nature of the interference with the rights of the patent holder" would not be "substantial," but "de minimus [sic]." Id. at 2692, 2714 (stating that "all that the generic can do is test the drug for purposes of submitting data to the FDA for approval. Thus, the nature of the interference is de minimus [sic]."). Thus, the 1984 Act was "designed to benefit the makers of generic drugs, research-based pharmaceutical companies, and not incidentally the public." Glaxo, Inc. v. Novopharm, Ltd., 110 F.3d 1562, 1568, 42 USPQ2d 1257, 1262 (Fed.Cir.1997).
This court has had occasion to consider the limits of the words "solely for purposes reasonably related to the development and submission of information under a Federal law." Applying this language, this court has permitted clinical trials and demonstrations of medical devices under § 271(e)(1). See Intermedics Inc. v. Ventritex Inc., 775 F.Supp. 1269 (N.D.Cal. 1991), aff'd, 991 F.2d 808, 26 USPQ2d 1524 (Fed.Cir.1993) (citing Telectronics Pacing Sys., Inc. v. Ventritex, Inc., 982 F.2d 1520 (Fed.Cir.1992)).
This court has not considered the question arising in this case, namely, whether the pre-clinical research conducted under the Scripps-Merck agreement is exempt from liability for infringement of Integra's patents under § 271(e)(1). The Scripps-Merck experiments did not supply information for submission to the United States Food and Drug Administration (FDA), but instead identified the best drug candidate to subject to future clinical testing under the FDA processes. Thus, this court must determine whether the § 271(e)(1) safe harbor reaches back down the chain of experimentation to embrace development and identification of new drugs that will, in turn, be subject to FDA approval.
According to 35 U.S.C. § 271(a), anyone who "without authority makes, uses, sells, or offers to sell any patented invention, within the United States during the term of the patent therefor, infringes the patent." 35 U.S.C. § 271(a) (2000). In this case, Merck used the Integra inventions, and thus infringed its patents. Merck may, nonetheless, escape liability for patent infringement if its uses of the Integra inventions fall within the strict limits of § 271(e)(1). To qualify for exemption3, Merck must show its activities were "solely for uses reasonably related to the development and submission of information" to the FDA. 35 U.S.C. § 271(e)(1).
At the outset, this statutory language strictly limits the exemption "solely" to uses with a reasonable relationship to FDA procedures. The term "solely" places a constraint on the inquiry into the limits of the exemption. The exemption cannot extend at all beyond uses with the reasonable relationship specified in § 271(e)(1).
The 1984 Act further specifies the subject of the reasonable relationship test. The exemption covers uses "reasonably related to the development and submission of information" to the FDA. Thus, to qualify at all for the exemption, an otherwise infringing activity must reasonably relate to the development and submission of information for FDA's safety and effectiveness approval processes. The focus of the entire exemption is the provision of information to the FDA. Activities that do not directly produce information for the FDA are already straining the relationship to the central purpose of the safe harbor. The term "reasonably" permits some activities that are not themselves the experiments that produce FDA information to qualify as "solely for uses reasonably related" to clinical tests for the FDA. Again, however, the statutory language limits the reach of that relationship test.
In this case, the Scripps work sponsored by Merck was not clinical testing to supply information to the FDA, but only general biomedical research to identify new pharmaceutical compounds. The FDA has no interest in the hunt for drugs that may or may not later undergo clinical testing for FDA approval. For instance, the FDA does not require information about drugs other than the compound featured in an Investigational New Drug application. Thus, the Scripps work sponsored by Merck was not "solely for uses reasonably related" to clinical testing for FDA.
The reach of the reasonable relationship test as applied in this case receives further confirmation from the context of the 1984 Act. The meaning of the phrase "reasonably related to the development and submission of information" as set forth in § 271(e)(1) is clearer in the context of the role of the 1984 Act in facilitating expedited approval of a generic version of a drug previously approved by the FDA.
As discussed above, the express objective of the 1984 Act was to facilitate the immediate entry of safe, effective generic drugs into the marketplace upon expiration of a pioneer drug patent. The 1984 Act thus permits filing of an ANDA (abbreviated new drug application) to expedite FDA approval of a generic version of a drug already on the market. Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 54 USPQ2d 1711 (Fed.Cir.2000). This expedited approval process requires the generic drug company to perform safety and effectiveness tests on its product before expiration of the patent on the pioneer drug if the generic is to be available immediately upon patent expiration. As noted, however, this court had ruled that those pre-expiration tests infringe the patent on the pioneer drug. Roche, 733 F.2d at 858. Therefore, the 1984 Act enacted § 271(e)(1) to create a safe harbor for those pre-expiration tests necessary to satisfy FDA requirements. As also noted, the legislative record shows as well that the 1984 Act narrowly tailored the § 271(e)(1) exemption to have only a de minimis impact on the patentee's right to exclude. Therefore, the § 271(e)(1) safe harbor covers those pre-expiration activities "reasonably related" to acquiring FDA approval of a drug already on the market. Within this framework and language of the 1984 Act, the district court correctly confined the § 271(e)(1) exemption to activity that "would contribute (relatively directly)" to information the FDA considers in approving a drug. Intermedics, 775 F.Supp. at 1280.
The exemption viewed in this context does not endorse an interpretation of § 271(e)(1) that would encompass drug development activities far beyond those necessary to acquire information for FDA approval of a patented pioneer drug