Policing IPR boundaries

The patent battle this time is of a different kind. Small biotech vs. big pharma; Integra Lifesciences vs. Merck in the US Supreme Court. After hearing a lot on classic innovator vs. generic patent suits, this new turn in patent litigation is thought provoking. The all-time innovator big pharma is accused of infringing patent by small biotech. New Jersey-based Integra Lifesciences owns five patents relating to the discovery of a key protein fragment (containing an RGD amino acid sequence) that encourages cell adhesion. Merck KGaA retained Scripps Research Institute to undertake research and Scripps supplied Merck with a candidate for clinical development for cancer. Integra, when it came to know the story, offered to license its patents to Merck; however Merck was not willing to sign any licence agreement.

Integra then sued Merck for inducing patent infringement by supplying Scripps with the RGD-peptide compounds and by hiring Scripps to perform experiments that infringed Integra’s patents on methods that used the compounds. Although Merck denied any infringement, the district court found that Merck’s activities infringed four of the five patents and that those activities were not exempt from patent infringement. This case raises the crucial question of working around patented inventions for further R&D. There is no doubt that nothing should block advancement of science. However, the Integra case shows that patent systems around the globe are not yet evolved to tackle such issues as policing of IPR boundaries.

While pharmaceutical companies should get the flexibility to conduct research into potentially ground-breaking new medicines, as rival firm’s efforts to develop new drugs always are routed in commercial interests, there should be mandatory mechanisms to ensure benefit sharing. Europe and the United States have contrasting approaches to the experimental use defence to patent infringement. Experiments to develop improvements to a patented technology are permitted in Europe without licence from the patentee. US law does not permit such experiments.

If the Supreme Court ruling extends statutory exemption to exploratory drug discovery research, it would benefit drug research companies. However, this would result in devalue of the research tool patents and research tools development would be at stake as it is left out without any incentives. Although there are no detailed statistics of the value of research tools, the genomics revolution has opened up wider avenues and biological targets are the key to new age research tools which expedites and makes drug discovery cheaper.

The Merck argument that narrowing the exemption will delay development of new and better drugs and increase costs of drug development is quite a fact. If it is agreed that research tools patent can be infringed this would easily substantiate that generics manufacturers should also be given full freedom to infringe innovator patents. Will any “innovator” drug company buy this argument? Remember the 1998 Millennium Pharmaceuticals-Bayer drug discovery alliance under which Bayer committed $465 million to gain access to Millennium’s technology and drug targets. This speaks volumes as to how should IPR be protected, at the same time not blocking R&D. India which is in the experimental phase of a new patent era needs to learn crucial lessons from the global battles and revamp its patent systems to ensure advancement of science without denying incentives to innovation.

— jayashreep@expressindia.com