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Patent Ruling May Mean Trouble for Big Pharma

When Barr Pharmaceuticals (BRL) went to court last week against Johnson & Johnson (JNJ - Get Report), it wasn't a typical patent battle.

That's because the contest over J&J's Razadyne, a drug for mild to moderate Alzheimer's disease, will serve as an early test of how a recent Supreme Court ruling may improve the efforts of generic-drug makers to challenge patents.

What the highest court in the land decided April 30 wasn't a direct commentary on drugs or biotechnology but instead was focused on a patent dispute over the design of an adjustable gas pedal on vehicles that have electronic engine controls.

In the case, Teleflex claimed that KSR International infringed on its patent for the gas pedal. KSR argued that the patent was invalid. KSR had already won a lower court decision, but it was reversed on appeal. The Supreme Court agreed with the lower court and said existing patent-law guidelines were too strict.

Therein lies the relevance to the drug industry, and legal experts say the decision will have a broad reach. "Things will be tougher for Big Pharma," says Professor Margo Bagley, an expert on intellectual property at the University of Virginia's School of Law.

Several guidelines exist for establishing a patent, and the Supreme Court focused on the most difficult concept -- is an invention obvious to a person of "ordinary skill" in a specific technology? KSR argued that the Teleflex patent was, thus invalidating the patent.

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