WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday is set to wade into Teva Pharmaceutical Industries Ltd’s fight over patent protections for Copaxone, its top-selling multiple sclerosis drug, in one of the most important business cases of the justices’ new term.
The nine justices are due to hear a one-hour oral argument beginning at 10 a.m. EDT in which Israel-based Teva is pitted against generic rivals that want to introduce their own versions of the drug as soon as possible.
Teva is trying to protect its $4-billion-a-year drug, which accounts for 50 percent of its profits.
There are two teams developing cheaper generic forms of Copaxone: one involving Novartis AG’s Sandoz Inc and Momenta Pharmaceuticals Inc and another involving Mylan Inc and Natco Pharma Ltd.
What is immediately at stake is a key patent due to expire in September 2015.
In July 2013, the U.S. Court of Appeals for the Federal Circuit ruled the patent was invalid, prompting Teva to seek Supreme Court review. The Supreme Court declined to stay the appeals court ruling pending appeal, meaning Copaxone currently has no patent protection.
With the fate of the patent uncertain, Mylan has said it plans to launch as soon as it has government approval, which could be before the end of 2014. Sandoz and Momenta declined to comment on when they expect their product to be available.
In the meantime, Teva is switching multiple sclerosis patients who use the drug over to a new patent-protected formulation of Copaxone.
The generic companies would be liable for damages based on Teva’s lost profits if they were to introduce their version of the drug and lose the Supreme Court case. That could be worth up to $700 million for each year Teva can trace losses to, according to analyst Umer Raffat of investment research firm ISI Group.
The Teva case comes on the heels of the high court hearing the highest proportion of intellectual property cases in its history in its previous term. Its new term started last week and runs until June.
“We are seeing a lot of concerns about how the patent system is functioning,” Peter Menell, a professor at the University of California, Berkeley School of Law, said of the Supreme Court’s recent interventions.
The high court’s interest in patent cases has been linked to divisions among judges on the U.S. Court of Appeals for the Federal Circuit, which handles all patent appeals.
The high court reversed the appeals court in five of the six patent cases it heard last term.
The Teva case could have broad ramifications in the patent world because it addresses how much leeway the appeals court has to second-guess district court judges.
A ruling is due by the end of June. The case is Teva Pharmaceuticals v. Sandoz, U.S. Supreme Court, No. 13-854.
Reporting by Lawrence Hurley; Editing by Will Dunham