In a ruling that leaves unsettled a key legal question on inventors’ rights to a patent, Chief Justice John G. Roberts, Jr., on Wednesday cleared the way for a maker of generic drugs to sell cheaper versions of two highly profitable birth-control pills that are now sold only under brand names.
In a brief order, containing no explanation, Roberts refused to delay a federal appeals court ruling that will strip two major drug companies based in Germany of the U.S. patent they have held for fourteen years. The patent is for a “crystalline calcium salt” that is patented under the name Metafolin, and is a key ingredient in making oral contraceptives that are being sold under the trade names Safyral and Beyaz. Drug control pills are a very convenient form for women to avoid pregnancy.
As a result of Wednesday’s order, the generic drug maker Watson Laboratories Inc., will be free to put on sale its own version of the two drugs containing Metafolin. Last year, the Germany company, Bayer, which has the Metafolin patent along with co-inventor Merck & Cie., had sales of $90 million of the two contraceptives.
Bayer and Merck had jointly asked the Chief Justice to put on hold a ruling nullifying their patent by the U.S. Court of Appeals for the Federal Circuit, so that Watson could not enter the generic market while the two companies appeal to the Supreme Court. Roberts temporarily blocked the Federal Circuit Court decision last Thursday, until he could get a response from Watson Laboratories, which was filed on Tuesday. The Two German firms filed a a final brief earlier Wednesday. Roberts denied the companies’ delay pleas after all of the filings were in.
If Watson were allowed to market its generic version of the birth-control pills, the two German firms had told Roberts, the market would swiftly become dominated by generic versions, and the two patent-holders would lose perhaps 80 percent or more of the market.
In countering that argument, Watson Laboratories made two basic rguments: first, that if the patent were ultimately upheld, the two patent holders could collect money damagers for Watson’s infringement, and, second, that the patent holders have already made arrangements for another company to offer a generic version on behalf of Bayer and Merck, so that version would also compete with the brand-name versions.
Chief Justice Roberts acted on his own, without referring the issue to the other Justices, which was an option open to him.
Roberts’ three-sentence order said nothing about the underlying issue of patent law that the German companies had argued was at stake in this case.
Under patent law, an inventor is required to move fairly promptly to spply for a patent to protect its exclusive rights to a new item or method. If the inventor offers the invention for sale to anyone, then a patent application must be filed within one year. The aim is to keep the inventor from starting to make commercial gains for the new creation for a significant period before seeking a patent, thus prolonging its monopoly right to the invention.
Relying upon that so-called “on sale bar,” the Federal Circuit Court ruled that the patent that Bayer and Merck had on Metafolin was invalid because the inventors had waited more than a year to seek a patent after an offer to sell rights to use Metafolin in the United States.
Bayer and Merck have argued all along that all that they did before seeking a patent was to engage in private and confidential negotiations with a Utah laboratory, Weider Nutrition International, to make use of Metafolin in nutritional supplements — a deal that ultimately did not work out. That was not a public sale, the inventors contended, and that was the only kind of offer that would set in motion the one year deadline for filing for a patent.
The companies took their case to the Chief Justice, arguing that the Federal Circuit Court had gone against decades of precedent by treating a private negotiation as the equivalent of a public sale. The companies also claimed that the Justice Department had sided with their view of the “on sale bar” in a brief filed in the Federal Circuit Court in a separate case.
Answering the companies’ plea to the Chief Justice, Watson Laboratories said that there is no “bright-line rule” that the “on sale bar” must only involve a sale to the public. Any sale, for commercial purposes, of an invention sets off the running of the one-year time limit to file for a patent, Watson argued.
Because of the brevity of the Chief Justice’s order, this dispute over what patent law does require was left unresolved, at least in this case. If Bayer and Merck go ahead with their petition for review of the Metafolin patent case, or if that separate case by the Federal Circuit Court were to be appealed to the Supreme Court, there may then be a chance for the Court to clarify the issue.
In the meantime, the German companies will be facing the entry, presumably soon, of Watson into the market with its generic oral contraceptives containing Metafolin.