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Appeals Court Refuses to Rehear Merck v Teva Temodar Spat

|Includes:Merck & Co Inc. (MRK), TEVA

Back in November I wrote about the Court of Appeals decision backing Merck & Co. Inc.'s (NYSE:MRK) (through its sub Schering) in its bid to prevent Teva Pharmaceuticals (NASDAQ:TEVA) (through its sub Barr) from offering a generic version of the anti-brain cancer drug temozolomide, marketed by Schering as Temodar.  At the time, I said:

I note, however, that one of the three judges dissented (with very strong language), and therefore it's possible the Court of Appeals as a whole (all 9 judges) may decide to rehear the case en banc (they do this when there are controversial legal issues that merit a full review by the entire Court of Appeals, and not just the three-judge panel to which the case was originally assigned). A decision about that will come in the next few months, after Barr makes a request for a rehearing, which it will undoubtedly do.
Today the Court Appeals just barely denied Teva's motion for rehearing, voting 5-5 on the issue (a 10th judge has been added to the court in the interim since my last post).  Five of the Court of Appeals judges dissented, indicating that they would have overruled the earlier decision supporting Schering.  This is quite unusual for a Court of Appeals to be so divided on an issue.  The opinion is available here.

The case is now ripe for a petition by Teva for Supreme Court review.  While that's a long shot (the Supremes take only one or two patent cases a year), it's more likely here than in the average patent case, due to the vehement disagreement amongst the Court of Appeals judges.  A decision by the Supreme Court whether to take the case will be made sometime this summer or fall.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Stocks: MRK, TEVA