In Merck KGaA v. Integra Lifesciences I, Ltd ., __ U.S. __, 125 S. Ct. 2372 (2005) , the United States Supreme Court decided, without dissent, that the patent law's safe harbor provision exempts from infringement the preclinical use of patented inventions in drug research. Without this legal immunity, pharmaceutical companies face patent infringement liability when they conduct preclinical experiments using rival companies' patented compounds. The U.S. Court of Appeals for the Federal Circuit had earlier found that the statutory exemption applied only to clinical research activity that contributes "relatively directly" to information the Food and Drug Administration (FDA) considers in approving a drug. This narrow interpretation of the safe harbor provision had raised concerns that the patent law could significantly restrict the development and introduction of new medical treatments and generic drugs. Vacating the appellate court's decision, the U.S. Supreme Court unanimously ruled that the exemption protects all uses of patented inventions that are "reasonably related" to the process of developing any information for FDA submission, which includes preclinical studies. The Court's expansive construction of the safe harbor provision "leaves adequate space for experimentation and failure on the road to regulatory approval" and "provides a wide berth for the use of patented drugs in activities related to the federal regulatory process." It is normally a violation of the Patent Act to use any patented invention without prior authorization of the patent owner. However, a statutory exception to this general rule provides: "It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention ... solely for uses reasonably related to the development and submission of information" to the United States Food and Drug Administration (FDA). Thus, a party that uses a patented invention without the patent owner's permission is committing an infringing act, but if the use comes within the scope of the statutory exception, the party will not be held liable for violating the patent owner's rights. The statutory exception was created by the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act. This legislation modified the Patent Act by creating a new section, 35 U.S.C. Â§ 271(e), that provides "safe harbor" from infringement for pharmaceutical companies using patented inventions in their drug research and development operations. The Hatch-Waxman Act is widely credited with encouraging and expediting the creation and availability of generic versions of approved patented drugs. Prior to its enactment, pharmaceutical companies had to wait until all relevant patents expired before undertaking the clinical research necessary to obtain FDA approval of generic equivalents. Thus, an established drug's patent term was de facto extended beyond its expiration date by the length of the FDA regulatory process for approving the generic equivalent, which took more than two years. The Hatch-Waxman Act allows generic drug manufacturers to conduct safety and effectiveness tests during the time the brand name drug's patent is still in force, often resulting in immediate introduction of a generic drug into the market upon the pioneer drug's patent expiration. The Federal Food, Drug, and Cosmetics Act (FDCA) regulates the manufacture, use, or sale of drugs. Under the FDCA, the FDA must determine that a drug is safe and effective before it can be marketed to consumers. The FDCA establishes a two-stage approval process for new drugs: an "Investigational New Drug" (IND) application and a "New Drug Application" (NDA). The drug manufacturer must file an IND with the FDA after the company has identified, through preclinical testing on animals and in test tubes, chemical compounds that appear to have beneficial therapeutic effects. The IND is a request for authorization to conduct clinical (human) testing, and it must contain information and data from the preclinical studies that justify the proposed clinical trial. Once the FDA approves the IND, the drugmaker can commence clinical studies. If these studies demonstrate that a new drug is reasonably safe and effective for use, the drugmaker is required to submit a NDA. The NDA must include data from preclinical and clinical studies. After extensive review of the NDA, the FDA issues final approval or denial of the application for manufacturing and selling the new drug to the public. The Patent Act's safe harbor provision has often been compared to the "fair use" defense in copyright law, since it immunizes from liability otherwise infringing acts in order to advance compelling public policy interests. The legislative history of the Hatch-Waxman Act provides the basis for this analogy: "Just as we have recognized the doctrine of fair use in copyright, it is appropriate to create a similar mechanism in the patent law. That is all this bill does." Despite this deceptively simple language of purpose, the safe harbor provision has been the subject of confusion and litigation for many years following its enactment. For over two decades, federal courts struggled to define the breadth and contours of the exemption, particularly concerning the types and uses of patented invention covered by the safe harbor. As for the types of covered patented invention, the United States Supreme Court in Eli Lilly & Co. v. Medtronic, Inc. expansively interpreted Â§ 271(e)(1) to include not only drug and veterinary products, but also medical devices that are subject to pre-market approval by the FDA. The Eli Lilly Court determined that "[t]he phrase 'patented invention' in Â§ 271(e)(1) is defined to include all inventions, not drug-related inventions alone." The Court opined that if Congress had wanted the safe harbor to cover only generic drugs, "there were available such infinitely more clear and simply ways of expressing that intent." As written, Â§ 271(e)(1) applies to the "entire statutory scheme of regulation," including "medical devices, food additives, color additives, new drugs, antibiotic drugs, and human biological products." Concerning the protected uses of a patented invention, a long disputed issue was what kind of research in the drug development process qualified for the exemption: basic research, preclinical research, or clinical studies. These three stages of drug development are described as follows: basic research involves the testing of thousands of compounds to discover any biological activity relevant to understanding the cause of a disease; the preclinical stage involves more focused research on a smaller group of chemical compounds in the hopes of finding the best candidate for clinical development; and clinical studies are the testing of the drug on human subjects in preparation for FDA approval. Following its interpretive lead in Eli Lilly, the Supreme Court in Merck KGaA v. Integra Lifesciences I, Ltd . ( " Integra " ) ruled that Â§ 271(e)(1) immunizes from infringement both preclinical and clinical use of patented inventions in the drug research and development process. Integra Lifesciences I, Ltd. ("Integra") is a pharmaceutical company that owns five patents related to a sequence of three amino acids, arginine, glycine, and aspartic acid (the "RGD peptide"), which promotes cell adhesion by attaching to receptors on cell surface proteins called integrins. Scientists working for Telios Pharmaceuticals, Inc. discovered that the RGD peptide had potential use in promoting wound healing and biocompatibility of prosthetic devices, prompting Telios to obtain patents for the RGD peptide compositions and methods. However, after failing to develop a viable commercial product, Telios sold the patents to Integra. In the mid-1980s, Dr. David Cheresh at the Scripps Research Institute ("Scripps"), a non-profit corporation that conducts biochemical research, discovered that blocking integrin receptors using the RGD peptide inhibited angiogenesis, a process by which new blood vessels sprout from existing vessels. Angiogenesis plays a critical role in the spread of many diseases, including cancerous tumor growth, diabetic retinopathy, and rheumatoid arthritis. Merck KGaA ("Merck"), a German pharmaceutical corporation unaffiliated with the U.S.-based pharmaceutical company Merck & Co., was interested in developing this discovery into a drug to control angiogenesis. In 1988, Merck entered into an agreement with Scripps to provide funding for Dr. Cheresh's research, in exchange for Scripps granting Merck an option to license future discoveries arising from his research. In 1994, Dr. Cheresh succeeded in reversing tumor growth in chicken embryos using a RGD peptide identified as EMD 66203, which had been provided by Merck. This peptide was covered by Integra's patent. Due to Dr. Cheresh's breakthrough achievement, Merck and Scripps entered into a new collaboration agreement in September 1995 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. Dr. Cheresh then proceeded to conduct in vivo and in vitro experiments on EMD 66203 and two derivatives of it, EMD 85189 and EMD 121974, in order to evaluate each peptide as potential drug candidates. These "tests measured the efficacy, specificity, and toxicity of the particular peptides as angiogenesis inhibitors, and evaluated their mechanism of action and pharmacokinetics in animals." Based on these tests, in November 1996 Merck's pharmaceutical steering committee selected EMD 85189 for pre-clinical development; in April 1997, Merck switched to EMD 121974 as its most promising candidate for clinical testing. In October 1998, Merck reached an agreement with the National Cancer Institute (NCI) to sponsor the clinical trials, and later that year, the NCI filed an IND application with the FDA for EMD 121974. When Integra became aware of Merck's agreement with Scripps to conduct angiogenesis research for commercial purposes, Integra offered Merck the opportunity to purchase licenses to use its patented RGD peptides.