A US Supreme Court case is dividing the life sciences industry, essentially pitting drug developers against the research tool industry. The court, which is expected to rule on the case by the summer, recently heard arguments from both sides of a debate that stems from a series of experiments conducted in the 1990s.

At the time, David Cheresh and his colleagues received a grant and peptides from German pharmaceutical company Merck (unrelated to the international US-based firm Merck) to determine if any of the peptides blocked an integrin important for tumor angiogenesis. However, some of those peptides were patented by Integra, based in New Jersey. Integra sued Merck, winning $15 million in a California court.

Merck appealed, arguing that they didn't have to pay licensing fees because their work fell under an exception: As long as experiments are reasonably related to a new drug application to be submitted to the...

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