WASHINGTON - The Supreme Court last week heard a patent case that could have industrywide implications if the justices deem it's permissible for a licensee to challenge its licensor's intellectual property without breaching their contract.
Such a scenario likely would lead to a wave of new patent challenges, some legal observers said, which could translate to higher licensing costs. The issue has arisen as a result of MedImmune Inc.'s challenge of intellectual property that it licenses from Genentech Inc., the so-called Cabilly patent.
"Should you be able to challenge the validity of the patent that you've just licensed?" asked Mark Wilson, a lawyer at Alston & Bird's Charlotte office, N.C. "That's an interesting question," and one fraught with a range of ramifications, because licenses essentially represent patent settlements without involving the courts. "It's a resolution to an actual or potential dispute," thereby implying that the matter is resolved once a license is in place.
The Federal Circuit ruled against allowing suits by licensees in interpreting a requirement in the Declaratory Judgment Act that there must be a case of actual controversy. The requirement stems from Article III of the Constitution, which says there must be an actual problem before the courts can issue a declaratory judgment.
"You have to have that case of controversy; you have to have some conflict there," Wilson told BioWorld Today. "If you're a licensee, where's the conflict? You're not going to get sued. Because you have a license, the patentee could never sue you, unless you violate your license agreement. That's a completely different matter."
But MedImmune has not broken its license to the patent, which it uses in producing Synagis (palivizumab), its top-selling drug for preventing respiratory syncytial virus in high-risk infants. Nevertheless, the Gaithersburg, Md.-based company has been fighting South San Francisco-based Genentech's extension of the patent well beyond its original expiration date through an agreement a couple of years ago.
Still, the Supreme Court is hearing the challenge, perhaps because of its recent interest in reforming the patent system.
"I think that they could leave the door open for people that resolve cases for business reasons to potentially challenge those same patents," Wilson said, "and try to rid the world of what they consider to be an invalid patent."
In the end, if a majority of justices rule in MedImmune's favor, the decision would swing legal powers away from patentees because licensors would be able to bring suit at their discretion without breaking their deals. Presently, patentees can file first when charging infringement, but they wouldn't be able to file against licensees because of their license agreements.
"It shifts the power completely over to the other side," Wilson said, "to control the location of the case and when the case is filed."
To fix that, future licensing deals likely would be drafted with provisions allowing licensors to terminate any agreement if licensees seek to challenge the licensed patent in court. In addition, it's probable that license fees would climb to compensate for the costs of potential lawsuits.
Biomarker Consortium Formed
The National Institutes of Health and the FDA are partnering with the Biotechnology Industry Organization (BIO) and the Pharmaceutical Research and Manufacturers of America (PhRMA) in a public-private initiative called the Biomarkers Consortium.
Its initial focus will center on quantifying the use of an imaging technique called fluorodeoxyglucose-positron emission tomography, or FDG-PET, as a biomarker for non-small-cell lung cancer and non-Hodgkin's lymphoma. Already those efforts are being funded with drug company donations totaling $3.75 million, with another $3.75 million being sought to complete the projects.
BIO President and CEO Jim Greenwood told BioWorld Today that the work leads to two benefits. First, efforts around identifying biomarkers are a proactive approach to better defining drug safety profiles, because such "early adverse effect signals" potentially avert calls for congressional changes to the FDA, he said. Second, having validated biomarkers that demonstrate product efficacy has the capacity to speed up the clinical trial process because smaller, more targeted studies with surrogate endpoints could be employed more frequently.
The Foundation for the National Institutes of Health will administer these efforts.
FDA Clears New Flu Vaccine
Another influenza vaccine is coming to the market, FluLaval, and it's available for use this flu season.
Approved under the FDA's accelerated pathway, the product belongs to London-based GlaxoSmithKline plc by virtue of its $1.4 billion buyout of ID Biomedical Corp. It's the second GSK flu vaccine available in the U.S., in addition to Fluarix, and one of five FDA-licensed flu vaccines from four different manufacturers. In total, the companies are expected to supply 115 million doses of flu vaccine to the U.S. market this flu season.
Top government health officials hope that the record high level of available shots entices more people to get vaccinated this flu season. "We need people who can benefit from the vaccine to get it," Julie Gerberding, the head of the Centers for Disease Control and Prevention in Atlanta, said at a press conference to unveil survey results showing that less than half of those polled planned to get a flu vaccine.
FluLaval, which contains inactivated virus, is administered in a single injection. It is manufactured in Canada, where it has been approved since 2001.
The FDA remains under fire, though, as an article published in the Archives of Internal Medicine has current or former members of the agency's Drug Safety and Risk Management Advisory Committee calling for "sweeping" changes to deal with "a large number of longstanding problems at the agency." Further, since Congress is ultimately responsible, "it is up to Congress to take the steps necessary to reinvigorate the FDA's ability to assure the public that approved medical products are safe."
Among fixes, they proposed that lawmakers should give the agency more direct legal authority to pursue violations of Phase IV commitments; there should be a conditional drug-approval policy, at least for some products; the FDA's safety operations need more financial resources; that safety group should be a center-level division within the agency instead of being part of the drug approval office; and there should be broader representation of safety experts on the FDA's advisory committees.