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Supreme Court to hear patent law case
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by Caitlin Kiley
Tuesday, April 12, 2005
The Supreme Court will hear a patent case regarding the protection of research tools April 20 which numerous organizations and universities, including the Wisconsin Alumni Research Association, have taken active roles in the case’s discussion.
WARF filed an amicus brief along with several other universities encouraging the court to protect intellectual property.
The case pits Merck, a German pharmaceutical company, against Integra Life Sciences, a medical technology company. Merck and its supporters are arguing for a broader interpretation of a 1984 “safe harbor” law allowing companies to use patented materials and information without being accused of infringing on patents. The exemption currently extends only to those planning to apply for research approval from the Food and Drug Administration.
According to Shashank Upadhye, vice president and general counsel for Eon Labs, a generic drug company that filed a brief in favor of Merck, narrow interpretations of the law are illogical. Upadhye said a narrow interpretation excluding pre-clinical testing from the safe harbor exemption would inhibit drug companies’ ability to complete the preliminary research necessary for getting FDA approval.
“If people start erecting certain obstacles very early on in the drug discovery, it’s going to cost more money and it’s going to take more time,” Upadhye said.
According to the Pharmaceutical Research and Manufacturers of America Foundation, introducing a new drug to the market takes 10 to15 years and costs an average of $800 million.
Andy Cohn, spokesperson for WARF, warned against treating a liberal interpretation of the safe harbor law as if it would have only minor consequences. He said if the Supreme Court were to favor Merck and other pharmaceutical companies, university technology transfer would suffer.
“I think that Merck is a ‘big pharma’ company and the people on the other side have lower capitalization and less money to work with,” Cohn said. “So I think obviously the university and biotechnology companies have more to lose.”
Upadhye said a common misconception is that companies protected under the safe harbor law gain access to unlimited infringement rights. Upadhye said in truth companies can only use the patented materials to test them in small quantities and see if they would make marketable products. When a company steps into the realm of commercial use and large-scale production, it would then be forced to buy rights to patented materials.
Upadhye added companies siding with Merck were not recklessly infringing patented research tools nor trying to use mass-produced drugs without license.
“It’s not the parade of horribles that Integra seems to suggest,” Upadhye said. “Who am I really hurting?”
But University of Wisconsin assistant professor of agricultural and applied economics Jeremy Foltz said the case’s seemingly polar interests might not be so different.
“There are corporate interests on both sides of this,” Foltz said. “It’s hard to see it as pure corporate versus non-corporate or even big corporation versus small corporation.”
Foltz said if Merck were to win the case, incentives for basic research would lessen.
“This would give drug companies the right to use research tools without paying royalties,” Foltz said. “And if that lowers the value of producing these tools, that lowers the economic incentive for people to do that kind of research.”
According to Foltz, the pharmaceutical industry’s efforts reflect the companies’ willingness to accept short-term benefits over long-term ones.
“Suddenly there won’t be enough invested in research tools that they need to do the work they do,” Foltz said. “They may lose by winning.”
