Thursday, April 21, 2005

O'Connor, Breyer back in Merck v. Integra

It seems that the possible confusion about "which Merck" is involved in the case Merck v. Integra has been addressed. Justices Stephen Breyer and Sandra Day O'Connor, who had recused themselves in earlier parts of the case, did participate in oral argument on April 20, 2005.

As a fine point on the Merck "division" in World War I, the stock of the American component of the then German Merck was bought by a Merck family member who was an American citizen. What happened with Merck was different from what happened to Bayer and to Schering. It is true that Merck & Co. (makers of VIOXX) and Merck KGaA (the Merck of Merck v. Integra) are presently different entities.

-->Written by Tony Mauro-->

Two High Court Justices Un-Recuse From Key Patent Case

Tony Mauro
Legal Times

When oral arguments got underway at the Supreme Court Wednesday, April 20, 2005, in the key patent infringement case of Merck KgaA v. Integra Life Sciences I, Ltd., an odd question was on the minds of many of the lawyers and others in the courtroom: Why were all nine justices participating in the case?

Nine, of course, is the norm. But when the Court in January agreed to hear the case, Justices Stephen Breyer and Sandra Day O'Connor announced they took no part in the Court's action. The justices, as is their custom, did not say why they recused. But a quick glance at their financial disclosure forms seemed to reveal the answer: Both justices indicated last year that they owned stock in the pharmaceutical company Merck & Co. Case closed.

Or so it seemed -- until Wednesday, when O'Connor and Breyer remained on the bench as Chief Justice William Rehnquist announced the Merck case for oral argument. That was a clear sign that two justices had changed their minds about staying out of the case and rejoined as participants in the court's decisionmaking in Merck v. Integra -- an extremely rare occurrence.

O'Connor asked the first question, as is often the case, and she and Breyer were among the most active participants. Both, it appeared to many, seemed sympathetic to Merck, and their presence might, in fact, tip the decision toward Merck.

Were the justices cravenly trying to protect their financial interests by rejoining the case? No such scandal was brewing. It turns out that soon after the justices' recusal in January, Merck's lawyer in the case, E. Joshua Rosenkranz of New York City's Heller Ehrman White & McAuliffe, sent a letter to the clerk of the Supreme Court to "address a possible misunderstanding" about Merck's name and corporate structure.

Rosenkranz went on to say that while Merck & Co. -- the U.S. firm in which the justices owned stock -- and Merck KgaA -- the German firm that is the party in the case before the Court -- "share a common ancestry," they are now "entirely separate entities," and have been since 1917. The German company, he explained, owns worldwide rights to the Merck name except in North America. Both companies got their names from Heinrich Emanuel Merck, an early German industrialist, but the American subsidiary became separate after World War I.

A former clerk to the late Justice William Brennan Jr., Rosenkranz wrote delicately about the subject, noting that both justices owned stock in the American Merck and adding, "While the recusals may have been prompted by other circumstances, I wanted to be sure to alert the Court to this potential misunderstanding."

The January 13 letter did the trick. Rosenkranz confirmed late Wednesday that soon after his letter was circulated to the justices, he received word from the Court that Breyer and O'Connor were back in the case.

No formal announcement was made on the subject though, so some lawyers in the audience were surprised to see Breyer and O'Connor participating.

Edward Reines of Weil Gotschal & Manges, who wrote an amicus curiae brief in the case in opposition to Merck, said the reappearance of the two justices was a topic of conversation at a post-argument discussion he moderated for the Federal Circuit Bar Association. And Reines said the consensus was that both justices "seemed to be inclined" more toward Merck's view of the "safe harbor" provision of the 1984 Hatch-Waxman Act that allows drug companies to use drugs patented by other firms in their own research without fearing allegations of patent infringement.

Rosenkranz agreed that "coincidentally," the two justices who had recused previously "were the most critical" at Wednesday's oral argument of the ruling of the U.S. Court of Appeals for the Federal Circuit that Merck is seeking to overturn. But that was not why Rosenkranz was glad they rejoined the case, he said.

"We wanted a full court so we could have the benefit of all of their thinking," he said.


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