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A seven-member Supreme Court will decide a high-stakes pharmaceutical industry dispute over the extent to which companies can use rivals’ patented drugs to conduct their own research and development, the Court announced Friday. In granting review in Merck v. Integra Lifesciences, the Court noted that Justices Sandra Day O’Connor and Stephen Breyer did not participate in the decision, which likely means they will sit out the decision on the merits as well. They did not announce why, but both own Merck common stock, according to their 2003 financial disclosure statements. Also on Friday, the high court announced it would review Arthur Andersen v. United States, in which the accounting firm is challenging its federal conviction for tampering with Enron Corp.-related documents. And in a separate announcement, the Court said that the effects of Chief Justice William Rehnquist’s treatments for thyroid cancer would keep him off the bench for the next two weeks of oral arguments � the third argument cycle he will have missed. The announcement followed a more optimistic report earlier this week that Rehnquist had returned to work at the Court building one or more times in late December, the first time since his illness was announced. Rehnquist’s plan to swear in President George W. Bush at the Jan. 20 inauguration ceremony is apparently unchanged. The Merck case is a test of a 1984 law that created a “safe haven” for drug companies to allow them to use rivals’ patented products in the process of seeking approval by the Food and Drug Administration for their own new products. The exception to patent laws was created to speed the development of new drugs and to allow the quick introduction of generic drugs after patents expire. Integra sued Merck to keep Merck from using Integra patents in the development of new drugs to treat cancer and other diseases. Integra claimed that the exemption did not apply because Merck’s experiments were not directly relevant to the FDA approval process. A jury found infringement and awarded Integra $15 million in damages. The U.S. Court of Appeals for the Federal Circuit upheld the verdict, interpreting the safe haven narrowly to allow only those uses of patented drugs that “reasonably relate” to the submission of materials to the FDA. The exemption “simply does not globally embrace all experimental activity that at some point, however attenuated, may lead to an FDA approval process,” the ruling stated. Merck appealed, and after the Supreme Court asked the government for its view of the case, the solicitor general’s office came in on Merck’s side. The Federal Circuit ruling “poses a direct and substantial threat to new drug research,” the government’s brief states. AARP, the retirees’ group, also filed on the side of Merck, urging a more-permissive interpretation of the safe haven. “It is vitally important that drug companies are able to test and experiment with patented material in order to advance pharmaceutical research and bring useful drugs to market as soon as possible,” said AARP lawyer Sarah Lock in a statement before the case was granted review.

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