Integra : The research tool patent revival
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Keywords: research tools, patents, Integra, research exemption, reach-through, royalties
Integra: The research tool patent revival Charles J. Raubicheck, Barry S. White, Thomas J. Kowalski, Daniel G. Brown, Amy Leahy and Pamela Fekete Date received (in revised form): 5th September, 2003
Abstract There was a question as to the value of research tool patents; for instance, whether practising such patents for preclinical research would be within the research exemption of the US Patent Statute. The Federal Circuit in Integra Lifesciences I, Ltd v Merck kgaA held that the preclinical research in issue was not within the safe harbour of the research exemption, breathing life into research tool patents; but vacated the damages award because it appeared to have been influenced by hindsight knowledge that a valuable drug candidate had emerged. Integra is thus good news and bad news for owners of patents relating to discovery tools. This paper is not to be considered opinions of Frommer Lawrence & Haug LLP or any of the firm’s clients; and nothing in this paper is to be considered as legal advice, a substitute for legal advice, or as positions/strategies, etc taken/employed in, or suitable for, any particular case or set of facts.
THE PRE-INTEGRA QUESTIONS ON THE VALUE OF RESEARCH TOOLS PATENTS
Thomas Kowalski Frommer Lawrence & Haug LLP, New York Office, 745 Fifth Avenue, New York, NY 10151, USA Tel: +1 212 588 0800 Fax: +1 212 588 0500 E-mail: [email protected]
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Research tool patents – patents that cover technology used to discover drugs and drug candidates – after having suffered some diminution of value following the first decision in Bayer AG v Housey Pharmaceuticals, Inc.,1,2 and having their value in question due to uncertainties of the scope of the research exemption under US law,3 have enjoyed a revival due to the recent Federal Circuit decision in Integra Lifesciences I, Ltd v Merck KgaA.4 Research tools are at the core of scientific advancement, and the use of biological research tools is usually an initial step in the chain of modern drug discovery. However, certain lower Court cases in the USA had threatened to vitiate the value of research tool patents. For instance, as noted, the first decision in Housey 1,2 had called into question the propriety of reach-through licensing – licensing of technology/intellectual property, typically patent rights, with royalties based on a percentage of sales, where the licensed technology/ intellectual property, such as basic
research, is not incorporated into the end product. The second decision in Housey 1,2,5 eased the threat to research tool patents by holding that the patentee did not engage in patent misuse by licences that required the payment of royalties on discovered drugs sales occurring after expiration of patent because the royalties, though payable after expiration of patents, were for preexpiration use of invention. But, lower court decisions on the research exemption still called into question the value of research tool patents.
THE RESEARCH EXEMPT
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