WASHINGTON, Dec 4 (Reuters) - U.S. Supreme Court justices on Tuesday grappled with a Swiss pharmaceutical company's effort to salvage a patent behind its lucrative anti-nausea drug in a case that could make it easier to cancel key patents, especially among smaller drugmakers.
The justices asked tough questions of both sides during an hour of oral arguments in an appeal by Helsinn Healthcare S.A. of a lower court's decision to invalidate its patent on Aloxi, which paved the way for Israel-based Teva Pharmaceutical Industries to launch a generic version of the drug in March.
Aloxi is used to prevent nausea and vomiting in patients receiving chemotherapy. The Supreme Court previously refused Helsinn's request to block the lower court ruling while it considered the company's case, allowing Teva to bring its Aloxi copycat to market.
The case centers on a provision in U.S. patent law prohibiting the patenting of an invention if it has been on sale or offered to the public more than a year before the application for the patent is filed.
Helsinn, a small, family-owned pharmaceutical company, is at odds with Teva over an agreement that Helsinn struck with another pharmaceutical firm in 2001 to market and distribute the drug in the United States and defray its own costs. The deal was announced in regulatory filings and a press release.
Teva said the patent was invalid because the deal was reached nearly two years before Helsinn first applied for a patent and constituted a public sale.
Helsinn, backed by the Trump administration, said that the distribution deal did not constitute a sale to the public because its drug formulation was kept secret.
During Tuesday's arguments, the justices struggled to balance its prior decisions where an early sale can impact the ability to get a patent, with a 2011 patent law change that may have made that rule more ambiguous.
Liberal Justice Elena Kagan asked Teva's attorney William Jay if it was "not even like a little bit doubtful" what an early sale means after the change. But at another point she also questioned whether the law's updated language is enough to upset the court's prior interpretations.
Other justices' questions, including those of conservative Justice Brett Kavanaugh, reflected similar tensions.
The case began in 2011 when Helsinn sued over Teva's plans for a generic version of Aloxi. Last year, the U.S. Court of Appeals for the Federal Circuit, a Washington-based specialized patent court, agreed with Teva and invalidated the patent, saying a commercial offer or contract to sell a product makes it available to the public.
Helsinn said the decision puts small companies at a disadvantage because they often need partners to develop and bring drugs to market, and will dissuade them developing new medicines.
Before Teva's generic was launched, Aloxi accounted for hundreds of millions in annual sales for Helsinn, the "overwhelming majority" of its worldwide revenue, according to court filings. (Reporting by Andrew Chung; editing by Grant McCool)