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An Expansion to the Experimental Use Exception to Patent Infringement in the Works?

The US Patent and Trademark Office is requesting public feedback on the current experimental use exception’s impact on technology sectors—and the public’s appetite for expanding the exception.

Technology and life sciences industries are familiar with the well-developed body of case law applying to the experimental use exception to patent infringement, but this area of the law is getting special new attention from the US Patent and Trademark Office (USPTO), which published its notice requesting comments from the public on the experimental use exception on June 28, 2024.

Reiterating its central goal of promoting “scientific, technological, and social progress” and placing a particular emphasis on the judicially created exception’s effects on agricultural technology, the USPTO is soliciting input from public stakeholders on whether the judicially created experimental use exception is sufficient to support this objective in current times and, if not, whether a statutory experimental use exception should be implemented.

HISTORICAL CONTEXT AND CURRENT JURISPRUDENCE

Experimental use exception jurisprudence was first introduced in the landmark case of Whittemore v. Cutter , in which jury instructions approved by the court established that the question of infringement turned on the prospect of benefit or profit for the accused infringer. [1]

In Whittemore , the court defined patent infringement as “the making of a machine fit for use, and with a design for profit,” stating that “it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects.”

Over time, US courts in experimental use cases have continued to rely on the prospect of profit or benefit to the accused infringer as the deciding factor, with more recent cases explicitly excluding from the exception any “use that is in any way commercial in nature” and “is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” [2]

With respect to the life sciences industry, critics of the narrow applicability of the current exception have indicated that competitive benefits to the accused infringer often overlap with or stifle scientific inquiry into new therapies for patients.

MODELS FOR STATUTORY IMPLEMENTATION IN LIFE SCIENCES: THE ‘SAFE HARBOR’ PROVISION AND PAST LEGISLATIVE ATTEMPTS

Currently, there are only a few limited statutory exceptions barring a charge of infringement codified by statute, including the “research exemption” for plant variety protection [3] and the “safe harbor” provision implemented under the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act). [4]

The “safe harbor” provision, which shields from infringement the importation, sale, offer for sale, production of, or use of patented drugs and/or biologics in preparation for seeking FDA approval (i.e., preapproval testing/preclinical research), was codified in response to the US Court of Appeals for the Federal Circuit’s decision in Roche Products Inc. v. Bolar Pharmaceutical Co. , [5] earning the nickname of the “Bolar” exemption. Despite the statute and case law dating to 1984, there remains uncertainty about the scope and actual safety to be found within the “safe harbor.”

Past legislative attempts in the US to codify exceptions to patent infringement have been unsuccessful but provide additional examples of expanding the research exception for infringement. The Patent Competitiveness and Technological Innovation Act of 1990 [6] sought to enact a specific research exemption from patent infringement, wherein it provided protection from infringement in instances where a patented invention was made or used “solely for research or experimentation purposes unless the patented invention has a primary purpose of research or experimentation.”

Additionally, the Genomic Research and Diagnostic Accessibility Act of 2002 [7] explicitly exempted from infringement the use of “any patent for or patented use of genetic sequence information for purposes of research,” excepting those entities “directly engaged in the commercial manufacture, commercial sale, or commercial offer for sale of a drug, medical device, process, or other product using such patent for or patented use of genetic sequence information.”

These statutory examples may provide models for implementing a broader-reaching experimental use provision via the United States Code. In particular, current “Safe Harbor” jurisprudence permits the use, importation, or sale of patented drugs/biologics for comparative testing for premarket approval submissions to the FDA; an expanded statutory provision might provide protection for experimental testing of patented inventions falling outside the drug/biologic field akin to the provisions set forth in previous failed attempts as set forth above.

COMPARATIVE INTERNATIONAL PERSPECTIVES ON RESEARCH EXCEPTION TO PATENT INFRINGEMENT

Globally, many jurisdictions, including those in Europe, South America, and Asia, have codified “Bolar-type” exceptions. However, many of these jurisdictions also have statutory experimental use exceptions broader than such “Bolar-type” exemptions which apply to any experimental use for any technical field—not just drugs and/or biologics. For example, the United Kingdom exempts uses of an invention “done privately and for purposes which are not commercial” or “done for experimental purposes relating to the subject-matter of the invention.” [8]

SCOPE OF PUBLIC INPUT

The USPTO is seeking input on the impact of the current experimental use exception on various technology sectors, including quantum computing, artificial intelligence, agriculture, life sciences, and climate-mitigation technologies. The agency is particularly interested in understanding how the current jurisprudence affects investment, research and development, commercialization, and patent enforcement.

The Questions for Public Comments are available at Experimental Use Exception Request for Comments , and the USPTO will be accepting comments from interested members of the public until September 26, 2024.

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:

[1]   Whittemore v. Cutter, 29 F. Cas. 1120 (C.C.D. Mass. 1813) (Case No. 17,600).

[2]   Madey v. Duke University, 307 F.3d 1361 (Fed. Cir. 2002) at 1352.

[3]  7 U.S.C. § 2544.

[4]   Pub. L. No. 98-417, 98 Stat. 1585 (codified as amended at 35 U.S.C. §§ 156 and 271(e)).

[5]  733 F.2d 858 (Fed. Cir. 1984).

[6]   Text - H.R.5598 - 101st Congress (1989-1990): Patent Competitiveness and Technological Innovation Act of 1990 | Congress.gov | Library of Congress

[7]   Text - H.R.3967 - 107th Congress (2001-2002): Genomic Research and Diagnostic Accessibility Act of 2002 | Congress.gov | Library of Congress

[8]   Patents Act 1977, Sections 60(5)(a) and 60(5)(b) 

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The experimental use exception to patent infringement: do universities deserve special treatment.

Elizabeth A. Rowe , University of Florida Levin College of Law Follow

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Publication date, oclc fast subject heading, intellectual property.

The experimental use exception is a common law exception to the patent-holder's exclusive right of use. It permits the use of another's patented device when such use is for philosophical inquiry, curiosity, or amusement. It has recently come under attack by many who consider it too narrow. They fear that the courts' "narrowing" of the experimental use exception will stifle research and innovation. Much of the discontent with the doctrine has been spurred by a relatively recent Federal Circuit opinion, Madey v. Duke University , which makes clear that a research university does not receive immunity under the experimental use exception when its researchers engage in research or conduct experiments using patented inventions. This ruling has created an outcry because over the years universities appear to have assumed, albeit incorrectly, that their research was protected under the doctrine and thus that their scientists need not seek permission from patent owners before using patented devices. This Article, however, asserts that the university should be liable. Given the nature of university research today and its resemblance to industry research, universities should not receive special treatment from infringement simply by virtue of their being universities. In order to make a patent holder's right to exclude others meaningful, any attempt to broaden the activities that are exempt from infringement under the doctrine must be done sparingly and only for compelling reasons.

Recommended Citation

Elizabeth A. Rowe, The Experimental Use Exception to Patent Infringement: Do Universities Deserve Special Treatment? , 57 Hastings L.J. 921 (2006), available at http://scholarship.law.ufl.edu/facultypub/91

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Article Contents

I. the research exemption, ii. right to repair, iii. conclusion.

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Research and repair: expanding exceptions to patent infringement in response to a pandemic

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Presidential Scholar and Professor of Law, University of Utah S.J. Quinney College of Law, Adjunct Professor, Department of Human Genetics, University of Utah School of Medicine. Several of the concepts in this essay are based on a series of blog posts written by the author for InfoJustice.org sponsored by the American University Washington College of Law. The author thanks Sean Flynn for the inspiration to undertake this project.

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Jorge L Contreras, Research and repair: expanding exceptions to patent infringement in response to a pandemic, Journal of Law and the Biosciences , Volume 7, Issue 1, January-June 2020, lsaa014, https://doi.org/10.1093/jlb/lsaa014

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While public health emergencies such as the recent COVID-19 coronavirus pandemic strain resources, burden the economy and cause significant human suffering, they also provide opportunities to revisit established legal doctrines and consider them in a fresh light. This phenomenon is as true in patent law as it is in many other areas of law. 1 Commentators have been quick to observe the many intersections between patent law and the coronavirus pandemic, often in connection with long-standing complaints and criticisms of the system. 2 This essay does not attempt to address every patent law issue raised by the coronavirus pandemic, of which there are many. Rather, it focuses on two discrete areas of patent law through the lens of the current crisis and considers how we might adjust existing doctrine knowing what we know today.

The doctrinal areas on which this essay focuses are two long-standing but narrow exemptions from patent infringement: one that permits scientific research and one that permits the owner of a patented device to repair it. Though distinct at first glance, both of these doctrines permit activity that would otherwise be considered patent infringement. They are exceptions to the exclusivity that the law grants to patent holders—particularly the right to ‘make’ a patented article and, to a lesser degree, to ‘use’ it—and for this reason they are particularly salient when patents may impact critical lifesaving technologies.

This essay recommends broadening the scope of the research exemption to cover a larger range of research activities conducted prior to the release of a commercial product and recognizing the right of an owner of a patented product to make, or have made, replacement parts for that product, even if those parts may be covered by the claims of a patent or cross the line of ‘reconstruction’ under current law. The implementation of these adjustments, conceived in light of the current coronavirus pandemic, could facilitate increased research, development, and the use of patented technologies and better prepare the United States to deal with the next great public health crisis.

In the United States, the so-called research exemption to patent infringement (sometimes referred to as the experimental use defense 3 ) originated in the venerable 1813 case Whittemore v. Cutter, 4 in which Justice Joseph Story, sitting by designation, wrote that a patent on a machine is not infringed by someone who constructs the machine ‘merely for philosophical experiments or for the purpose of ascertaining the sufficiency of the machine to produce its described effects.’ In effect, Justice Story evokes the gentleman tinkerer—the enlightenment natural philosopher who, rather than hunting or riding, amuses himself with homemade scientific experiments and sometimes chances upon an important discovery. 5

Over the years, the scope of this exemption has waxed and waned, often reaching well beyond the idea of the gentleman tinkerer to encompass much experimental activity conducted by universities and nonprofit research institutions. 6 By the end of the twentieth century, there was a general understanding that most academic research, unless expressly conducted under contract for a commercial entity, would be immunized from patent infringement under the research exemption.

But in 2002, the research exemption in the United States experienced a significant contraction. In Madey v. Duke, 7 Duke University continued to use experimental laser equipment developed by Dr. John Madey, a former Duke researcher who held patents covering the equipment. 8 Dr. Madey sued Duke for infringement, but the district court granted summary judgment in favor of Duke. In so doing, it held that Madey failed to raise any genuine issue of material fact that would tend to refute the application of the research exemption to Duke, an institution whose ‘primary purpose is to teach, research and expand knowledge.’ 9 Madey’s burden, in the view of the district court, was to prove that Duke’s use of the patented equipment ‘had definite, cognizable, and not insubstantial commercial purposes.’ 10

The Federal Circuit disagreed on appeal. First, it held that the burden of proof in the case of the research exemption was not the patent holder’s but the alleged infringer’s. In order to be excused from infringement under the research exemption, Duke had to show that its activities were conducted ‘solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.’ 11 Under this standard, most research projects at Duke would not qualify for the research exemption, as they ‘unmistakably further the institution’s legitimate business objectives, including educating and enlightening students and faculty participating in these projects[,] increase the status of the institution and lure lucrative research grants, students and faculty.’ 12 Accordingly, few, if any, research activities conducted at universities today, even if they are not specifically funded by the private sector, would qualify for this exemption from patent infringement. 13 And by extension, it is probably safe to say that virtually no research conducted in the private sector would have the benefit of this exemption.

A second US research exemption, however, arises under the 1984 Drug Price Competition and Patent Term Restoration Act (commonly known as the Hatch–Waxman Act), 14 which provides mechanisms for the introduction of generic drug competition once the patents on an FDA-approved drug have expired. In particular, § 271(e)(1) of the Act provides that:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. 15

This provision creates a safe harbor for research and experimentation with drugs (including medical devices) conducted in anticipation of an application for FDA approval. The provision was created in order to allow generic drug manufacturers to begin testing their products during the last years of a drug patent’s life without infringing that patent, but it has been expanded through judicial interpretation to encompass a wide variety of drug-related R&D activity. Thus, in Merck v. Integra, 16 the Supreme Court indicated that, in addition to clinical trials, preclinical testing of drug candidates—even candidates that are eventually rejected—may be protected under the § 271(e)(1) safe harbor. Justice Scalia, writing for the Court, explained that the statute gives ‘wide berth for the use of patented drugs in activities related to the federal regulatory process.’ 17

What does this mean for coronavirus and other urgent biomedical research? First, the Hatch–Waxman safe harbor under § 271(e)(1) could protect a significant swath of R&D relating to diagnostics, vaccines, and therapeutics, so long as the resulting information might eventually be submitted to the FDA. Second, to the extent that FDA approval is not required for the manufacture or sale of certain technologies (eg drugs and devices that have already received FDA approval, 18 laboratory-developed diagnostic tests, 19 mobile software apps, 20 etc.), this may be an opportunity for the courts, and the Federal Circuit in particular, to rethink the narrow formulation of the research exemption as currently stated in Madey v. Duke along the lines of the Supreme Court’s more expansive interpretation of § 271(e)(1). 21 That is, research activities should be immunized from patent infringement to the extent that they do not involve the manufacture of products for commercial sale or their use in a commercial setting. Pure research, even if conducted with a commercial goal in mind, should qualify under the research exemption. 22

In March, 2020, two engineers in Brescia, Italy, used a desktop 3D printer to fabricate replacement valves for more than 100 ventilator machines being used to treat coronavirus patients at a local hospital. 23 There is some debate about what happened next, but early news reports indicated that a parts manufacturer threatened to sue the engineers for infringing patents on the replacement valve. 24 While the existence of the threat and the patents themselves remains murky, the incident sparked a flurry of legal commentary regarding the risk that volunteers fabricating parts for lifesaving devices, and the hospitals that use them could be liable for patent infringement. 25

Under US law, the owner of a patented device has the right to repair that device so as to preserve its useful life. 26 The recognition of this ‘right to repair’ can be traced to the 1850 Supreme Court decision in Wilson v. Simpson, 27 in which the Court ‘distinguished the right of a purchaser of a patented planing machine to replace the machine’s cutting-knives when they became dull or broken, from the patentee’s sole right to make or renew the entire machine.’ 28 The right to repair concept has been recognized in numerous recent cases, including some relating to medical devices. 29

However, the right to repair does not permit the owner of a patented device to ‘reconstruct’ that device in whole or in substantial part. 30 Reconstruction, as opposed to mere repair, represents a ‘second creation of the patented entity’ and thus infringes the exclusive right of the patent holder to ‘make’ the device. 31 In distinguishing between permitted repair and prohibited reconstruction, courts weigh ‘the remaining useful capacity of the article, and the nature and role of the replaced parts in achieving that useful capacity.’ 32 Thus, if the owner of a patented device creates new patented parts to extend the life of the device beyond its anticipated life span, this would likely constitute impermissible reconstruction, whereas if the owner simply fixes a defect in an existing part or replaces it with an unpatented part, during the normal lifetime of the device, this would likely constitute permissible repair.

What, then, about 3D printed replacement valves for ventilator devices? 3D printing technology gives consumers an inexpensive way to fabricate replacement parts for complex mechanical devices that were previously available only from specialized manufacturers. 33 Should it matter that a particular ventilator is past the end of its normal product life span or that the design of the valve in question is covered by the claims of a patent? The implications of 3D printing technology on the patent law right of repair have been recognized in the literature for some time. 34 Yet these discussions have been largely hypothetical. With the emergence of coronavirus and the sudden surge in global demand for ventilators and other medical equipment, the doctrine is likely to receive renewed attention. This is particularly the case if replacement parts made using 3D printing technology are themselves covered by patent claims (as may have been the case with the Italian ventilator parts discussed above).

In an effort to reduce household waste, in 2019 the European Union adopted ‘right to repair’ regulations for a number of appliances including televisions, washing machines, dishwashers, and refrigerators. 35 The regulations require that manufacturers make spare parts for these appliances available for installation by independent service providers for at least 10 years following the date of purchase. The EU has recently considered expanding this regulation to smartphones and other electronic equipment. 36 Similar legislation has recently been proposed in the US state of Maryland. 37 But like the EU rules, these do not address the patent law issues arising from the fabrication of new parts by 3D printing or otherwise.

Two Canadian authors, anticipating some of these issues, have argued for an expansion of the repair right under Canadian patent law (which is similar in this respect to US law), proposing that:

a consumer should be granted an all-encompassing legal right to repair and modify patent-protected items given three conditions: (1) the consumer legally purchased the original good; (2) the consumer uses the repaired or modified item for private purposes; and (3) the consumer gains no financial benefit from posting the repair or modification online for others. 38

This proposal is sweeping in scope, permitting all consumers to repair and modify patented articles for their personal use, no matter how extensive those repairs or modifications might be. 39

Whatever the merits of this proposal, addressing the issues raised by coronavirus need not go so far. Thus, an alternative, more modest, proposal might be to expand the patent law right to repair to permit the fabrication of replacement parts for patented articles to address pressing public health needs. Consideration of public health needs in fashioning an exemption from patent infringement resonates with the ‘public interest’ factor that is considered by courts when deciding whether to issue a permanent injunction against a patent infringer. 40 The expansion of the repair right proposed in this essay would stop short of eliminating a patent holder’s ability to enforce its rights against all consumers but would at least permit the owners and users of patented equipment (including hospitals, suppliers, first responders, relief organizations, and volunteers) to eliminate this threat during a crisis.

The two exceptions to patent infringement discussed in this essay—the research exemption and the right to repair—are each implicated in the coronavirus pandemic. Expanding these timeworn doctrines to address the urgent needs of the healthcare and biomedical sectors today could contribute to ending the current crisis and preparing for the next such crisis to emerge.

See, generally, Andrew W. Torrance, Patents to the Rescue—Disasters and Patent Law , 1 DePaul J. Health L. 309 (2007).

See, eg Valerie Bauman, Covid-19 Spotlights Ruling’s Chilling Effect on Diagnostic Tests , Bloomberg Law News, Mar., 23, 2020 (quoting attorneys blaming the Supreme Court’s decision in Mayo v. Prometheus, 566 U.S. 66 (2012), for shortages of reliable coronavirus diagnostic tests in private practice); Editorial, In the fight against the coronavirus outbreak, life sciences companies need certainty in 101 , IAM Blog, Mar. 23, 2020, https://www.iam-media.com/law-policy/they-focus-fighting-the-coronavirus-outbreak-now-more-ever-life-sciences-companies (‘The COVID-19 R&D surge seeking the rapid discovery and commercialisation of diagnostics, therapeutics, vaccines and cures for the present threat will lay the groundwork for a remarkable range of scientific knowledge and potential commercial and clinical applications. The extent to which these promising prospects turn into new products, new businesses and new jobs depends in significant part on restored certainty and breadth of the patentable subject matter’).

Despite its use by both courts and commentators, I avoid the term ‘experimental use’ to avoid confusion with another patent law doctrine, the experimental use exception to the public use bar to patentability under 35 U.S.C. § 102(b).

29 F. Cas. 1120, 1121 (C.C.D. Mass. 1813).

See, eg Jenny Uglow, The Lunar Men: Five Friends Whose Curiosity Changed the World (2002) (discussing Matthew Boulton, James Watt, Josiah Wedgewood, Erasmus Darwin, and Joseph Priestly).

See Henrik Holzapfel & Joshua D. Sarnoff, A Cross-Atlantic Dialog on Experimental Use and Research Tools , 48 IDEA 123 (2007).

307 F.3d 1351 (Fed Cir 2002).

The facts of this case are atypical in that Dr. Madey, rather than the university that employed him, owned the patents in question. This situation arose from an arrangement between Dr. Madey and his prior employer, Stanford University. 307 F.3d, at 1352.

266 F. Supp.2d 420, 426 (M.D.N.C.2001).

Id ., at 425.

307 F.3d, at 1362.

One commentator wryly observed that the decision ‘cabined the (common law) experimental use exemption to activities akin to the Victorian practice of observing with crude microscopes rotifers in a drop of pond water as an after-dinner amusement amongst gentlemen.’ Kevin Noonan, A Glimmer of an Idea on an Experimental Use Exemption , Patent Docs blog, Nov. 7, 2018, https://www.patentdocs.org/2018/11/a-glimmer-of-an-idea-on-an-experimental-use-exemption.html .

Public Law 98–417, codified at 21 U.S.C. § 301 et seq.

35 U.S.C. § 271(e)(1).

Merck KGAA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).

Id . at x. For a good discussion, see Alicia A. Russo & Jason Johnson, Research Use Exemptions to Patent Infringement for Drug Discovery and Development in the United States , 2015 Cold Spring Harbor Perspectives in Med. 5:a020933 (2015).

U.S. Food & Drug Admin., Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency—Guidance for Industry and Food and Drug Administration Staff (Mar. 2020).

See Jonathan R Genzen, Regulation of Laboratory-Developed Tests: A Clinical Laboratory Perspective , 152 Am. J. Clinical Pathology 122 (2019).

U.S. Food & Drug Admin., Policy for Device Software Functions and Mobile Medical Applications—Guidance for Industry and Food and Drug Administration Staff (Sept. 2019).

Another route to expansion of the research exemption might be statutory. See Noonan, supra note 14 (proposing an amendment to the Bayh–Dole Act to permit academic researchers to experiment with patented inventions made using federal funding).

One ancillary result of expanding the research exemption in this manner could be the reduction of so-called reach-through royalties imposed by the holders of patents covering research tools. That is, if researchers are not required to enter into patent license agreements in order to practice certain research techniques (eg PCR, CRISPR, etc.), then the holders of patents on those techniques will lack a contractual vehicle with which to impose royalties on revenue generated by downstream users of discoveries made using such research tools. See, generally , Alfred C. Server, Nader Mousavi & Jane M. Love, Reach-Through Rights and the Patentability, Enforcement, and Licensing of Patents on Drug Discovery Tools , 1 Hastings Sci. & Tech. L.J. 21 (2009).

Cristian Fracassi & Alessandro Romaioli, We Made Copies of Ventilator Parts to Help Hospitals Fight Coronavirus , N.Y. Times, Mar. 22, 2020.

Jay Peters, Volunteers produce 3D-printed valves for life-saving coronavirus treatments , Verge (Mar. 17, 2020, updated Mar. 18, 2020), https://www.theverge.com/2020/3/17/21184308/coronavirus-italy-medical-3d-print-valves-treatments (one person involved recounted, ‘Let us say the risk to be sued exists since they bypassed a patent.’)

See Lucas Osborn, 3D Printing, Patent Infringement, and the Coronavirus , Patently-O blog, Mar. 19, 2020, https://patentlyo.com/patent/2020/03/printing-infringement-coronavirus.html . There are numerous other issues arising from unauthorized attempts to repair medical equipment, including ventilators. These include tight manufacturer controls on copyrighted service manuals and locked control software. See Jason Koebler, Hospitals Need to Repair Ventilators. Manufacturers Are Making That Impossible . Vice.com , Mar. 18, 2020, https://www.vice.com/en_us/article/wxekgx/hospitals-need-to-repair-ventilators-manufacturers-are-making-that-impossible . These issues are beyond the scope of this article.

See Jazz Photo Corp. v. Int’l Trade Comm’n, 264 F.3d 1094, 1102 (Fed. Cir. 2001).

50 U.S. (9 How.) 109 (1850).

Id ., at 123.

See, eg Kendall Co. v. Progressive Med. Tech., Inc., 85 F.3d 1570 (Fed. Cir. 1996) (permitting replacement of pressure sleeve in a patented medical device as ‘repair’).

See Sandvik Aktiebolag v. E.J. Co., 121 F.3d 669 (Fed. Cir. 1997) (making a new drill bit to replace a patented bit that could no longer be sharpened and reused constituted an infringing reconstruction of the patented article); Lummus Indus., Inc. v. D.M. E. Corp., 862 F.2d 267 (Fed. Cir. 1988) (finding that fabrication of new cutter wheels that formed a material part of the patented invention was reconstruction).

Aro Manufacturing Co. v. Convertible Top Replacement Co., 365 U.S. 336, 346 (1961).

Jazz Photo, 264 F.3d, at 1106.

News reports claim that the ventilator valves fabricated in Italy for a cost of about 1 Euro each were previously sold by the manufacturer for 10,000 Euro each. Peters, supra note 25.

See, eg Kelsey B. Wilbanks, The Challenges Of 3D Printing to the Repair-Reconstruction Doctrine In Patent Law , 20 Geo. Mason L. Rev. 1147 (2013), Tesh W. Dagne & Gosia Piasecka, The Right to Repair Doctrine and the Use of 3D Printing Technology in Canadian Patent Law , 14 Canadian J. L. & Tech. (2016), Marc D. Mimler, 3D printing and patent law—a UK perspective: apt and ready ? in 3D Printing and Beyond—Intellectual Property and Regulation, at Ch. 5 (Dinusha Mendis, Mark A. Lemley & Matthew Rimmer, Eds., 2019).

Eur. Comm’n, Regulation laying down ecodesign requirements 1 Oct., 2019, https://ec.europa.eu/energy/topics/energy-efficiency/energy-label-and-ecodesign/regulation-laying-down-ecodesign-requirements-1-october-2019_en?redir=1 .

See Roger Harrabin, EU brings in ‘right to repair’ rules for appliances , BBC News, Oct. 1, 2019, https://www.bbc.com/news/business-49884827 .

Matthew Gault, Maryland Suddenly Looks Like it Might Break John Deere’s Repair Monopoly, Vice.com , Mar. 12, 2020, https://www.vice.com/en_us/article/k7ekzw/maryland-suddenly-looks-like-it-might-break-john-deeres-repair-monopoly .

Dagne & Piasecka, supra note 35, at 264.

Expanding the scope of patent repair rights for consumer users of patented articles has been raised beyond the context of 3D printing in broader discussions of user innovation. See, eg Katherine J. Strandburg, Patent Fair Use 2.0 , 1 UC Irvine L. Rev. 265, 284–85 (2011).

See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (establishing four-factor test for issuance of injunctions in patent infringement cases, including one factor addressing the public interest).

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The USPTO’s “Experimental Use Exception Request for Comments”

July 12, 2024

Authored and Edited by Paul W. Browning, Ph.D. ; Adriana L. Burgy ; Stacy Lewis†

The USPTO released “ Experimental Use Exception Request for Comments ” in the Federal Register on Friday June 28, 2024. 89 Fed. Reg. 53,963 (June 28, 2024). 

Alleged infringers may argue in certain circumstances that activity is “experimental use” and therefore not infringing. The Federal Circuit, however, has narrowly construed the experimental defense to patent infringement. In Madey v. Duke University , the Federal Circuit concluded that ‘‘regardless of whether a particular institution or entity is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense.’’ 307 F.3d 1361, 1352 (Fed.Cir. 2002). Similarly, in Roche Prod. V. Bolar Pharm. Co. , 733 F.2d 858 (Fed. Cir. 1984), the Federal Circuit found the defendant’s conduct in developing a generic drug product infringing since the court “cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of ‘scientific inquiry,’ when that inquiry has definite, cognizable, and not insubstantial commercial purposes.” Id . at 863.

Following the Roche v. Bolar decision, the United States codified a safe harbor provision for drug development at 35 U.S.C. 271(e)(1). This, and similar exemptions in other jurisdictions, are often referred to as a “Bolar exemption.” In addition, the Plant Variety Protection Act contains exemptions that allow for others to use the protected variety in research and for breeding.

The USPTO’s “Experimental Use” request for comments seeks to investigate whether the Bolar exemption should be broadened to include activities beyond drug development, and specifically singles out the agricultural industry as an area where a Bolar exemption may be of interest. The request for comments, however, seeks input from the public about an experimental use exception for all technologies. The current effort purports to be aimed at encouraging innovation and fair competition. The USPTO poses 8 questions along those lines. For example, Question 3:

Please explain what impact, if any, a statutory experimental use exception would have on the innovation and commercialization of new technologies including with respect to: (a) research and development; (b) ability to obtain funding; (c) investment strategy; (d) licensing of patents and patent applications; (e) product development; (f) sales, including downstream and upstream sales; (g) competition; and (h) patent enforcement and litigation.

Written comments must be submitted by Sept. 26, 2024, to be considered.

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experimental use exception to patent infringement

USPTO Requests Comments on the Experimental Use Exception

USPTO Requests Comments on the Experimental Use Exception

The United States Patent and Trademark Office ("USPTO") is seeking public input about the need for a statutory experimental use exception in light of the common law jurisprudence.

On June 28, 2024, the USPTO issued a request for comments ("RFC") seeking public input on the current state of the common law experimental use exception to patent infringement and whether Congress should enact a statutory experimental use exception. The RFC is "consistent with the President's 2021 Executive Order on Promoting Competition in the American Economy " and asks for public views on the impact of the experimental use exception in all technology areas. 89 Fed. Reg. 53963, 53965 (June 28, 2024).

The RFC states that under current jurisprudence an alleged infringer cannot invoke an experimental use defense if "the act [of infringement] is in furtherance of the alleged infringer's legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry." Id. at 53964 (citing Madey v. Duke Univ., 307 F.3d 1352, 1362 (Fed. Cir. 2002)). The request compares "[t]his narrow and strictly limited experimental use defense" to the broader statutory exemptions in Europe, Asia, Canada, and Latin America. Id.  In addition, the request acknowledges that Congress has enacted the safe harbor provision under 35 U.S.C. 271(e)(1), which "allows for the experimental use of a patented invention by parties to collect regulatory approval data for medical devices and drugs," and that 7 U.S.C. § 2544 contains an exemption allowing for "the use and reproduction of a protected variety for plant breeding or other bona fide research." Id. As such, the RFC asks the public if the United States should adopt a statutory experimental use exception, and if so, how it should be defined.

The USPTO seeks comments on, inter alia : (i) the impact of current U.S. experimental use exception jurisprudence on investment and/or research and development; (ii) the impact of a statutory experimental use exception on innovation and commercialization of new technologies; (iii) how the current jurisprudence has impacted the public's willingness to utilize the U.S. patent system; and (iv) how a statutory exception, if any, should be defined and public policy reasons relating to maintaining the status quo or adopting such exception. 

The deadline to submit comments is September 26, 2024.

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USPTO Seeks Input on Experimental Use Exception to Patent Infringement and Possible Legislative Action

By: Jeffrey W. Schmidt Ph.D. and Karen G Potter Ph.D.

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On June 28, 2024, the United States Patent and Trademark Office (USPTO) issued a Notice requesting public comments on the current state of the common law experimental use exception to patent infringement and whether Congress should consider codifying the experimental use exception through legislative action. This follows from a string of other recent Notices where the USPTO is seeking public input on other areas of patent law, including a recent Notice of Proposed Rulemaking on Terminal Disclaimer practice.

The USPTO explained that the current experimental use exception is a common law exception that was created to prevent punishing someone who infringes a patent “merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the [invention] to produce its desired effects.” This led to the availability of the experimental use exception based on whether the alleged infringement involved profit-making or other commercial purposes. The USPTO describes the current state of the experimental use exception as being a “very narrow and strictly limited experimental use defense.”

The USPTO’s request for public input on the “narrow” experimental use exception appears to stem, at least in part, from divergent views of the exception and its narrow breadth. The USPTO explains that some argue that “a narrow exception enhances innovation by rewarding innovators with robust patent rights, while others noted that restricting researcher access to patented technologies would impede innovation.”

This is not the first time there has been discussion of codifying the common law experimental use exception. Unsuccessful attempts at enacting legislation to codify the exception occurred in Acts proposed in 1990 and again in 2002. This stands in contrast to many foreign jurisdictions where statutory experimental use exceptions have been enacted, including jurisdictions where life sciences research and development are robust. This includes European countries, such as Germany, the UK, France, Spain, Italy, Switzerland, and the Netherlands, Asian countries, such as Japan and China, and countries across the Americas, such as Canada and many Latin America jurisdictions, including Brazil.

A limited type of experimental use exception has, however, been codified in the U.S. in the Hatch-Waxman Act as 35 U.S.C. § 271(e), which is commonly referred to as the “safe harbor” exception rather than the experimental use exception. Section 271(e) provides that making, using, offering to sell, or selling certain patented inventions “solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products” shall  not  be considered an act of infringement. This “safe harbor” provision allows, for instance, a company to perform the testing required to obtain regulatory approval of a generic drug product without having to first wait for the patents covering the drug product to expire, thereby accelerating the timeline by which generic drug products can reach the market. Although certain acts can be shielded from liability for patent infringement under the § 271(e) exception where there is regulatory intent, the scope of the exception is ever evolving.

The USPTO will be accepting public comments over the next 90 days relating to the experimental use exception.

While the USPTO welcomes comments on any issues relating to the experimental use exception and its potential codification, they are particularly seeking out comments relating to the following issues:

  • Please explain how the current state of U.S. experimental use exception jurisprudence impacts investment and/or research and development in any field of technology, including, but not limited to: (a) quantum computing; (b) artificial intelligence; (c) other computer-related inventions; (d) agriculture; (e) life sciences (including prescription drugs and medical devices); and (f) climate-mitigation technologies.
  • Do you believe there are any technologies that are negatively affected by the current state of experimental use exception jurisprudence in the United States? If yes, please identify which technologies and explain how you believe they are affected.
  • Please explain what impact, if any, a statutory experimental use exception would have on the innovation and commercialization of new technologies, including with respect to: (a) research and development; (b) ability to obtain funding; (c) investment strategy; (d) licensing of patents and patent applications; (e) product development; (f) sales, including downstream and upstream sales; (g) competition; and (h) patent enforcement and litigation.
  • Has the current state of experimental use exception jurisprudence impacted decisions you have made with respect to filing, purchasing, licensing, selling, or maintaining patent applications and patents in the United States? If yes, please explain how.
  • Please explain whether you believe the United States should adopt a statutory experimental use exception. In doing so, please identify your reasons, including by providing evidence and data to support your views.
  • Please explain how a statutory experimental use exception, if any, should be defined. Please include specific limitations and restrictions you believe would be needed to ensure that patent rights are preserved.
  • Please identify public policy reasons in support of maintaining the status quo or changing the experimental use exception in the United States.
  • Please provide any additional recommendations on how best to enhance and facilitate experimental research on patented inventions in the United States.

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Research tool patents and the experimental use exemption—a no-win situation?

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Because their very purpose is experimentation, applying the experimental use exemption to research tool patents requires a close analysis.

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Barton, J. Int. Rev. of Ind. Prop. And Copy. Law 26 , 605, 614 (1995).

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Art. 27(b), Convention for the European Patent for the Common Market (CPC). Although it never came into force, the CPC inspired several European national law-making bodies.

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Acknowledgements

I wish to thank John Barton from Stanford Law School and Joseph Straus from the Max-Planck Institute for Foreign and International Patent, Copyright and Competition Law for reviewing the manuscript. I also would like to thank Alex-F. Muller from the Medical Research Foundation at the University of Geneva for his support.

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experimental use exception to patent infringement

experimental use exception to patent infringement

Patent Office Seeks Input on Experimental Use Exception Statute

By Aruni Soni

Aruni Soni

The US Patent and Trademark Office is seeking public comments on the state of a common law exception that allows patents to be infringed when doing so is for experimental use to better assess whether a statute is needed, according to a new Federal Register notice.

The USPTO cited an interest in learning about the impact of experimental use in “all technology areas” including quantum computing, AI, agriculture, climate-mitigation, and more, according to the Thursday filing .

The office said a “range of views on the propriety and scope of the experimental use exception” arose in the wake of the ...

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United States Patent and Trademark Office - An Agency of the Department of Commerce

USPTO seeks public feedback on the current state of the experimental use exception to patent infringement

Published on: 06/27/2024 11:37 AM

At its core, the patent system aims to promote scientific, technological, and social progress; a goal advanced by both patent owners’ disclosure and publication of scientific and technical knowledge in patent documents and by the grant of robust and reliable patents that incentivize innovation and protect investment. This cycle spurs further research and development, as well as the dissemination of patented technologies that benefit society at large. The U.S. Patent and Trademark Office (USPTO) continues to strengthen our processes and procedures to help ensure that patent rights are as robust and reliable as possible, including through our work on the clarity of the record as well as our inter-agency and international work advocating for a strong patent and IP ecosystem. 

A key aspect of this work is ensuring patents serve their intended purpose to attract funds, get ideas to market, and hold liable those who infringe on (or use) someone else’s patent rights.  However, well-defined exemptions to patent infringement for activities that solely constitute bona fide experimental uses, often in the context of research and development, can help preserve and amplify the function of the patent system, including for newcomers to the market and small to medium-sized entities.

Courts have carved out a narrow exception for experimenting with patented subject matter, known colloquially as the “experimental use exception.” Over the years, U.S. jurisprudence has sought to define the contours of this limited exception to patent infringement.

The USPTO has published a seeking public feedback on the current state of the experimental use exception jurisprudence and whether legislative action should be considered to enact a statutory experimental use exception.

“Maintaining the United States as a global leader in innovation is critical for driving economic growth and job creation,” said Kathi Vidal, Under Secretary of Commerce for Intellectual Property and Director of the USPTO. “Clarifying the contours of the USPTO’s experimental use exception, especially in view of researchers’ needs today, will help us continue to address emerging challenges and unlock new opportunities in key technology sectors. This RFC will help the USPTO better understand what additional clarity, if any, researchers and other innovators need.”

The agency will be accepting comments until September 26, 2024.

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USPTO Seeks Public Feedback On The Experimental Use Exception To Patent Infringement

Contributor.

Oblon, McClelland, Maier & Neustadt, L.L.P weblink

On June 27, 2024, the United States Patent and Trade Office ("USPTO") published a request for comments ("RFC") in the Federal Register inquiring about the current state of the experimental use defense to patent infringement and to determine the potential value of legislative action on the issue. This RFC both supports the President's 2021 Executive Order on Promoting Competition in the American Economy and furthers the United States Department of Agriculture and the USPTO's joint commitment to evaluate "New proposals for incentivizing and protecting innovation in the seed and agricultural-related space, including the addition of research or breeders' exemptions for U.S. utility patents." 1

Also known as the research exemption, the experimental use exemption can be traced back to the appellate affirmation of a jury instruction provided in the 1813 case Whittemore v. Cutter . 2 The Whittemore court presided over a patent infringement suit wherein the Defendant was alleged to have infringed upon a patent for a playing card manufacturing machine. The jury was instructed "the making of a machine fit for use, and with a design to use it for profit, was an infringement." On appeal, the Court found that the instruction was proper because "it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects." 

The general premise, that patent infringement cannot occur from an endeavor which is directed towards research, was affirmed by subsequent courts; however, research with commercial intent was not afforded the exemption. In Bonsack Machine v. Underwood, 3 Roche Prod. v. Bolar Pharm. Co., 4 and Embrex v. Service Engineering Corp. 5 the courts found that despite the alleged infringing activities being directed towards the pursuit of knowledge, the substantial commercial intent behind the acquisition of that information was sufficient to invalidate any experimental use exemption.

The doctrine was further narrowed by the U.S. Court of Appeals in the 2002 case Madey v. Duke University , wherein the court found that "so long as the [alleged infringement] is in furtherance of the alleged infringer's legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense." 6   This highly restrictive understanding of the experimental use exception remains instructive jurisprudence today.

Justification for the Codification of the Exception

Following the Madey ruling, calls were made from academic and legal spheres to codify the exemption, either to further clarify or expand it. 7 Some argued that the current interpretation of the exemption was overly narrow and frustrated the entire purpose of the patent system, to promote innovation in the useful arts, by directly preventing valuable experimentation from occurring. The United States has already codified some limited exemptions to experimental use, notably 35 U.S.C. 271(e)(1), the safe harbor exemption, which allows the use of patented inventions for the purposes of obtaining regulatory approval data for medical devices and pharmaceuticals.

The RFC continues by discussing the current legal status of similar exemptions to patent infringement overseas. In Europe, Asia, and the Americas, many countries have statutory experimental use exceptions with some nations providing broader protections than those afforded by the exemption domestically. Notably, in Germany, 8 France, 9 the UK, 10 Spain, 11 Italy, 12 , Switzerland, 13 and the Netherlands, 14 the statutory experimental use exemption applies to any experimental purpose.

The Request for Comments

The USPTO has provided the RFC with the intent of identifying the public's views on the impacts of the statutory use exception in particular subject areas such as the agricultural industry, wherein such a statutory change may incentivize innovation. The RFC continues by providing a series of questions which chiefly serve to identify the respondent's relationship to an industry, inquire how the current state of the experimental use exception jurisprudence may negatively or positively influence technology development in that area, and identify if and how a statutory exemption should be defined and enacted.

The comment period will be open to the general public until September 26, 2024 and should be submitted through the Federal eRulemaking Portal at https://www.regulations.gov . To submit comments via the portal, enter docket number PTO-C-2024-0023 on the homepage and click "Search." The site will provide a search results page listing all documents associated with this docket. Find a reference to this request for information and click on the "Comment" icon, complete the required fields, and enter or attach your comments. Comments will be available to the public and therefore personal information should not be included.

1  Agric. Mktg. Serv., U.S. Dep't Agric., More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs, at 6 (2023).

2 Whittemore v. Cutter, 29 F. Cas. 1120 (C.C.D. Mass. 1813) (Case No. 17,600)

3 Bonsack Mach. Co. v. Underwood, 73 F. 206 (C.C.E.D.N.C. 1896)

4 Roche Prod. v. Bolar Pharm. Co., 733 F.2d 858, 862 (Fed. Cir. 1984)

5 Embrex, Inc. v. Service Engineering Corp., 216 F.3d 1343 (Fed. Cir. 2000)

6 Madey v. Duke University, 307 F.3d 1361 (Fed. Cir. 2002) at 1352

7  John R. Thomas, Scientific Research and the Experimental Use Privilege in Patent Law, CRS Report No. RL32651 (2004).

8 Patentgesetz [Patent Act], Dec. 16, 1980, Bundesgesetzblatt, Teil I, [BGBl I] at 4074, as amended Aug. 30, 2021, section 11 No. 2 (Ger.).

9 French Code of Intellectual Property, L. 613-5.

10 U.K. Patents Act 1977, (1977) art. 60(5)(b), 37 Current Law 1 (Eng.).

11 Law 11/1986 of 20 March on Patents. Art. 52(1)(b).

12 Industrial Property Code (Legislative Decree No. 30 of February 10, 2005, as amended up to Law No. 102 of July 24, 2023) Art. 68(1)(a) (Italy).

13 Article 9(e) of the Federal Act on Patents for Inventions, adopted in 2008.

14 Netherlands Patent Act (15 Dec 1994, as amended) Art. 53(3).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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The Experimental Use Exception to Patent Infringement: Do Universities Deserve Special Treatment?

Hastings Law Journal, Vol. 57, No. 5, 2006

29 Pages Posted: 31 Aug 2005 Last revised: 4 Dec 2014

Elizabeth A. Rowe

University of Virginia School of Law

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To the extent university research has become more of a business than a philosophical enterprise, this article analyses whether it is fair to treat universities' patent infringement differently from their industry counterparts. The experimental use exception to patent infringement permits the use of another's patented device when such use is for philosophical inquiry, curiosity, or amusement. A relatively recent Federal Circuit opinion, Madey v. Duke University, has spurred much displeasure with the doctrine. Madey holds that a research university is not immunized under the experimental use exception when its researchers engage in research using patented inventions. The case has created an outcry because over the years universities appear to have assumed, albeit incorrectly, that their research was protected under the doctrine and thus their scientists need not seek permission from patent owners before using patented devices. Virtually all commentators since Madey have criticized the ruling and its effect on the experimental use exception. This article enters the discussion to offer a different and opposing viewpoint. It rejects the view that universities deserve special treatment, and it takes the position that a narrow experimental use exception is consistent with existing law, consistent with sound public policy, and appropriate for the current nature of university research. Furthermore, unlike most other commentators, it proposes that the Madey opinion will not cause the death of all research and innovation. The article examines several pragmatic considerations, as well as the United States Supreme Court's ruling this summer in Merck KgaA v. Integra Lifesciences I, Ltd., in support of that position. It concludes with a recommendation as to when it might be appropriate for Congress to consider any expansion of the experimental use exception.

Keywords: experimental use exception, patent infringement, university research

Suggested Citation: Suggested Citation

Elizabeth A. Rowe (Contact Author)

University of virginia school of law ( email ).

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HOME PAGE: http://www.law.virginia.edu/faculty/profile/nfy9vk/3077792

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University of Virginia School of Law

Elizabeth Rowe

The Experimental Use Exception to Patent Infringement: Do Universities Deserve Special Treatment?

The experimental use exception has recently come under attack by many who consider it too narrow. Much of this discontent with the doctrine has been spurred by a relatively recent Federal Circuit opinion, Madey v. Duke University, which makes clear that a research university does not receive immunity under the experimental use exception when its researchers engage in research or conduct experiments using patented inventions. To determine whether such a narrowing is proper, one must consider the overarching theoretical question about the tradeoff between protecting patentees' rights and maintaining incentives to innovate. In the context of the experimental use exception, this Article posits that a narrow experimental use exception strengthens incentives to invent and innovate, while a broad experimental use exception would provide disincentives to invest in patenting and innovation. This is especially so given the nature of modern university research and existing patent-licensing practices. Part I of this Article provides background on the experimental use exception. Part II discusses the Bayh-Dole Act, its alteration of the landscape of university research, and its impact on university patenting activity. Part III explains why, in reality, university research will survive a narrow experimental use exception. Finally, Part IV discusses why the experimental use exception is appropriately narrow and proposes a test that ought to guide Congress in deciding when legislative broadening is necessary.

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CAFC Clarifies Experimental Use Exception, Reduces Damages in Partial Reversal of Sunoco Patent Infringement Win

Logan Murr image

“The CAFC analogized the agreement here to that in the Helsinn decision, noting that in both instances the ‘agreement bears ‘all the hallmarks of a commercial contract.’”

Federal Circuit

Sunoco sued Venture, alleging that its operation of butane-blending systems infringed claims of U.S. Patent Nos. 7,032,629 (the ‘629 patent), 6,679,302 (the ‘302 patent), and 9,606,548 (the ‘548 patent). Venture counterclaimed, asserting that the patents were not infringed, were invalid and unenforceable. The district court ultimately awarded Sunoco $2 million in damages, which were trebled to $6 million. Venture appealed the district court decision challenging “(I) [the] rejection of its on-sale-bar defense, (II) [the] determination that it infringed two patents we have since held invalid, (III) [the] construction of two claim terms, and (IV) [the] decision to enhance damages.” On cross-appeal, Sunoco challenged the lower court’s decision not to grant its reasonable-royalty award or lost-profits damages.

Butane is commonly added to gasoline for two reasons: first, because butane helps cars start more easily at low temperatures due to its increased volatility, and because butane is cheaper than gasoline. However, due to butane’s contribution to air pollution when burned in warmer climates, butane limits are established by the Environmental Protection Agency and fluctuate throughout the year and depending on the region. Butane may be added by gasoline producers at any point throughout the process of refining crude oil into gasoline but blending it in late in the process allows refineries shipping gasoline to different areas with different butane limits to maximize the amount of butane. If butane were added early in the process, all the gasoline would have to comply with that of the requirements of the strictest region the refinery produces gasoline for. Accordingly, Sunoco’s patents “describe a system and method for blending butane with the gasoline at any point before the end of the distribution process: immediately before being distributed to the tanker trucks that take gasoline to consumer gas stations.”

On Sale Bar

On appeal, Venture asserted that claim 2 of the ‘629 patent and claims 2, 3, and 16 of the ‘302 patent were invalid under the principle that “no person is entitled to patent an ‘invention’ that has been ‘on sale’ more than one year before filing a patent application (i.e., before the critical date).” Pfaff v. Wells Elecs., Inc. , 525 U.S. 55, 57 (1998) . Citing Helsinn Healthcare S.A. , the CAFC reasoned that for Venture to “prevail” it “needed to show that, before the critical date, Sunoco’s patented invention was both (1) ‘the subject of a commercial offer for sale’ and (2) ‘ready for patenting.’” Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc. , 139 S. Ct. 628, 630 (2019) . Alternatively, the CAFC explained, citing Allen Eng’g Corp. , “Sunoco can negate an on-sale bar by demonstrating that the sale occurred ‘primarily for the purposes of experimentation.’” Allen Eng’g Corp. v. Bartell Indus., Inc. , 299 F.3d 1336, 1352 (Fed. Cir. 2002) .

On February 7, 2000, two days before “the critical date,” the inventor’s company, MCE Blending (MCE) offered to sell an automated butane-blending system to Equilon Enterprise LLC (Equilon) and install it in Detroit at Equilon’s facility. The district court concluded that the primary purpose of the sale of Sunoco’s patented invention was for experimentation, therefore it reasoned that the first prong of the analysis was not met and did not consider the second prong. The CAFC disagreed with this conclusion.

At the outset, the CAFC recognized, citing Petrolite Corp. , that “whether the Equilon transaction was primarily experimental or for commercial purposes ‘is a question of law to be analyzed based on the totality of the surrounding circumstances.’” Petrolite Corp. v. Baker Hughes Inc., 96 F.3d

1423, 1426 (Fed. Cir. 1996) . The CAFC then turned to the text of the agreement between Equilon and MCE and noted that it expressly characterized the transaction as a sale, making no reference to an experimental purpose. Further, the CAFC reasoned that “the recitals section of the agreement reinforce[d] the sale’s commercial character,” drawing specific attention to the section that states MCE had “developed” the relevant technology and equipment, that Equilon wished to purchase it, and that MCE was interested in selling it, installing it, and supplying all necessary butane.

Sunoco argued that the agreement did not require Equilon to pay anything for MCE’s system. However, the CAFC rejected this interpretation of the agreement, noting that while it is true that the agreement allocated installation costs to MCE, that does not mean Equilon exchanged nothing of value for the system. The district court recognized two distinct sections of the agreement, one contemplating installation of the invention and another covering the supply of butane. The CAFC declined to adopt this position, reasoning instead that the agreement was to buy butane in exchange for the equipment, therefore the agreement constituted a sale of the invention. The CAFC analogized the agreement here to that in the Helsinn decision, noting that in both instances the “agreement bears ‘all the hallmarks of a commercial contract.’” Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc. , 855 F.3d at 1361 . The court went on to explain that, similarly to Helsinn , the agreement “represents ‘an agreement between parties to give and to pass rights of property for consideration which the buyer pays or promises to pay the seller for the thing bought or sold. 855 F.3d at 1361.

Sunoco cited the pre-installation testing and post-installation testing described in the “Equipment Testing” section of the agreement as evidence that the primary purpose of the agreement was experimental in nature. However, the CAFC was unpersuaded, reasoning that the purpose of this testing was not “to experiment with the system’s design,” but “to ensure that ‘the Equipment satisfie[d] minimum operating standards.’” Therefore, the CAFC concluded that this provision standing alone was insufficient to prove primarily experimental purpose. Accordingly, the CAFC reversed the lower court’s experimental-use determination regarding claim 2 of the ‘629 patent and claims 2,3, and 16 of the ‘302 patent and remanded the case for the lower court to consider the second prong of the analysis.

Claim Construction

Venture also challenged the claim-construction of claims 16-17 of the ‘302 patent and claim 31 of the ‘629 patent. The dispute over claims 16-17 turned on the definition of “a vapor pressure of the butane stream.” Sunoco argued that the term did not need construction but should instead be afforded its ordinary meaning. At the claim-construction hearing, the disputed term was construed to mean “vapor pressure determined by a measurement taken from the butane stream.” At summary judgment, the district court determined that “claim 16 does not expressly require the determination of such an ‘actual’ butane pressure,” reasoning that interpreting claims 16-17 otherwise would render the claim set redundant.  Further, the district court concluded that Venture infringed claims 16-17 because it “used a value for butane vapor pressure—either determined from a sampling of the butane stream or through the use of an assumed value.” On appeal, the CAFC affirmed the district courts claim construction and finding of infringement of claim 17 of the ‘302 patent, finding nothing in the specification that justifies limiting the claim to actual measurements.

The dispute over the claim construction of claim 31 of the ‘629 patent was centered on the parties’ disagreement over whether the received “first measurement” must be used in “calculating” the blend rate. Venture’s noninfringement argument rested on the contention that it did not infringe because it collected the vapor pressure only for record keeping purposes instead of for the purposes of calculating blend rate. The lower court concluded, and the CAFC agreed on appeal, that “claim 31 does not require that the measurement actually be used to calculate the ratio.” Therefore, the CAFC affirmed the lower court’s determination that Venture infringed claim 31 of the ‘629 patent.

Enhanced Damages

The district court cited four reasons for enhancing Venture’s damages: first, that “it appear[ed] Venture effectively copied the patented system,” second, the district court’s determination that an opinion letter provided by attorney John Manion (the Manion Opinion) did not give Venture a good-faith belief that it was not infringing the asserted patents, third, Venture’s “less-than-ideal” litigation conduct, and lastly, Venture’s expansion of its butane-blending business after the start of the litigation. On appeal, the CAFC reversed the district court’s decision to enhance damages, noting a clear abuse of discretion by the lower court based on its improper treatment of the Manion Opinion. The CAFC reasoned that Venture had a good faith basis for relying on the Manion Opinion and therefore vacated the district court’s enhancement of damages.

Cross Appeal

On cross-appeal, Sunoco challenged the decision of the district court to deny lost-profits damages and its reasonable-royalty award. Finding no clear abuse of discretion, the CAFC affirmed the district court’s reasonable-royalty award and decision to deny lost profits damages.

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Research Exemption/Experimental Use in the European Union: Patents Do Not Block the Progress of Science

In the public debate about patents, specifically in the area of biotechnology, the position has been taken that patents block the progress of science. As we demonstrate in this review, this is not the case in the European Union (EU). The national patent acts of the EU member states define research and experimental use exemptions from patent infringement that allow sufficient room for research activities to promote innovation. This review provides a comparative overview of the legal requirements and the extent and limitations of experimental use exemptions, including the so-called Bolar provision, in Germany, the United Kingdom, France, Spain, Italy, and The Netherlands. The legal framework in the respective countries is illustrated with reference to practical examples concerning tests on patent-protected genetic targets and antibodies. Specific questions concerning the use of patent-protected research tools, the outsourcing of research activities, and the use of preparatory and supplying acts for experimental purposes that are necessary for conducting experiments are covered.

In the EU, patent law allows sufficient room for research activities to promote innovation. This is true for experiments to uncover new knowledge as well as for clinical trials needed to approve medicinal products.

In the public debate about patents, specifically in the area of biotechnology, the position has been taken that patents block the progress of science. As we demonstrate in this review, this is not the case. Patents are the proper tool to motivate innovation. Not only do they provide the chance for entrepreneurs and innovative industries to generate return of investment and, at times, profit, but they also allow the scientific community to further innovative research by full disclosure of new technical contributions—unless that research actually uses the patented invention as a tool without intending to further develop it. In the European Union (EU), this balance is achieved by the member states’ national patent acts, which define research and experimental use exemptions from patent infringement. In addition, there is the so-called Bolar exemption, which allows studies and trials that are required for the purpose of regulatory approval of medicinal products.

This legal framework is illustrated with reference to two practical examples. Example A is an exemplary patent on a genetic target and its use for diagnostic purposes. The hypothetical claims are:

  • a DNA fragment encoding human proliferase H, said proliferase H having the amino acid sequence set out in SEQ ID NO: 2; 1
  • the DNA fragment of claim 1, which comprises in the proliferase H–encoding sequence a frameshift mutation being indicative of a predisposition to abnormal hair growth;
  • a method for diagnosing a predisposition for abnormal hair growth in a human subject, which comprises determining in a tissue sample of said subject whether there is a germline frameshift mutation in the sequence of SEQ ID NO: 2 encoding proliferase H, said frameshift mutation being indicative of a predisposition to said abnormal hair growth.

Dr. Curly has a research group in a German hospital and is interested in investigating whether frameshift mutations in the proliferase H gene are also indicative of a predisposition to eyebrow cancer. He is planning to register a medicinal product with the U.S. Food and Drug Administration (FDA) and to conduct clinical trials in case his experiments confirm that causal relationship. His colleague Dr. Straight offers patients in a German hospital genetic tests for predisposition to abnormal hair growth and claims that this is done in context with his research. Are they exempted from patent infringement under EU provisions?

Example B is an exemplary patent for an antibody and medical uses thereof. The hypothetical claims are:

  • anti-CD390 antibody 1 having the VH polypeptide of SEQ ID NO: 1 and the VL polypeptide of SEQ ID NO: 2;
  • a pharmaceutical composition comprising the antibody of claim 1, optionally in combination with a pharmaceutically acceptable carrier;
  • an anti-CD390 antibody having the VH polypeptide of SEQ ID NO: 1 and the VL polypeptide of SEQ ID NO: 2 for use in a method of treating malignant hair growth.

Dr. Specific, head of immunology of a German research center, is considering starting a project aimed at investigating whether said antibody 1 can also be used for treating renal failure. In view of Dr. Specific’s intention to bring a medicinal product to the European market, the project will also encompass preclinical pilot studies concerning efficacy in the human body. Dr. Specific intends to have antibody 1 produced by supplier Ab Inc. because he himself does not have the required production know-how. His colleague Dr. Affinity uses antibody 1 as a tool in his research for monitoring the CD390 surface antigen during hair follicle morphogenesis. Are they exempted from patent infringement under EU provisions?

THE SITUATION IN GERMANY

Research privilege, legal basis.

According to the §11 No. 2 German Patent Act (GPA), the effects of a patent shall not extend to “acts done for experimental purposes relating to the subject matter of the patented invention.” The research exemption was first introduced into the law in 1981 and has been interpreted to provide for a broad range of allowed uses, for example, producing, importing, possessing, and using the protected product or process as a subject of research. Relevant for determining the scope and limitations of the so-called experimental use exemption are the German Federal Court of Justice (FCJ) decisions of July 11, 1995 ( Klinische Versuche I ) ( Clinical Trials I ) 2 and April 17, 1997 ( Klinische Versuche II ) ( Clinical Trials II ). 3 The criteria formulated in these decisions not only apply to clinical trials, but are also generally applicable to nonclinical research.

Requirements

Research on the subject matter.

The research exemption will only apply if the research is directed to the patented subject matter as such. It does not cover research with a patent-protected process or product to obtain information about other products or processes; that is, where the patented subject matter is merely a tool for carrying out research on other products and processes, §11 No. 2 GPA does not apply. For example, the use of patented test procedures for their intended purpose, that is, for performing experiments disclosed or claimed, is not exempted from patent protection because in such a case the patented test procedure itself would not be studied. Rather, it is simply used as a means for performing the disclosed or claimed experiment. Similarly, if the patent in question relates to a platform technology such as a drug delivery system, but the experiments are aimed at looking at the mechanism of action of an active ingredient delivered using that system, the exemption would likely not apply. In this case, the purpose of the experiments is to use the platform technology as a tool to investigate the activity of the active ingredient and not to find out something new about the platform technology per se. Therefore, there would not be a real and direct connection with the subject matter of the relevant invention. Conversely, if the patent were for a screening assay, the initial stages in the development of a screening assay for research purposes would fall within the exemption. However, using such a screening assay to identify new drug candidates would not relate to testing the invention and so would fall outside the exemption.

Gaining New Knowledge

According to the case law of the German FCJ, a privileged experiment is a planned action for obtaining information about the subject matter of the patented invention. In this respect, the demarcation between already-known information and new findings is important. The research exemption is evident if an experiment is directed to resolving any questions and/or obtaining further information about the subject matter of the patented invention.

Without mentioning concrete criteria to differentiate between privileged research and infringing use, the German FCJ in its decisions Clinical Trials I and II refers to a case-by-case evaluation where both the form of the tested substance and above all the intentions of the persons and companies involved must also be taken into account.

In line with earlier case law, 4 experiments are permissible that relate to the constitution of the patented substance, for example, experiments for investigating its composition, producibility, technical usability, and effects. Also allowed are experiments for testing the functionality of the patented invention. According to the German FCJ decision Clinical Trials I , this exemption includes using the subject matter of the invention for finding new, previously unknown applications or indications and—according to the decision Clinical Trials II —experiments for obtaining information about the properties and effects of the patented substance within the known pharmaceutical indications. Preclinical and/or clinical trials performed on a new chemical entity that is not known to have medical utility in order to find out whether it does have medical utility also fall within the existing experimental use exemption.

Based on the above principles, Dr. Curly’s research activities are covered by the research privilege. As clarified in the German FCJ decision Clinical Trials I , the patent-protected substance can be used as an object of research to find new knowledge about properties that are not yet explored. Because Dr. Curly has set up experiments to find out whether the proliferase H gene is indicative of predisposition to eyebrow cancer, he can rely on the experimental use exemption. The same is true with the research activities of Dr. Specific, who is using the patent-protected antibody 1 to investigate its unknown usability for treating renal failure.

Reach and Limitations

Economic background.

The goal of the experimental uses is not relevant as long as the experiments are conducted to gain new knowledge about the patented invention. It is not relevant whether the experiments are conducted strictly for research purposes or also with the aim of commercial exploitation. Therefore, it is permissible to conduct experiments with commercial purposes.

The research exemption, however, does not apply in cases where the activities are done solely for the purpose of generating revenues or clarifying commercial factors, such as market needs, price acceptability, and marketing options. 5 Accordingly, it appears as if the offer of genetic tests to patients by Dr. Straight is not covered by the privilege. The research exemption may, however, even apply in cases in which the experimental use acts are primarily directed to realizing commercial purposes and in which further technical and/or scientific knowledge is acquired and obtained as a side effect only. To rely on the experimental use privilege, Dr. Straight would have to show that he is collecting and observing specific data from patients during the test with the purpose of investigating unknown properties and/or functions of the patent-protected DNA fragment and/or the patent-protected method.

Limitation of Amounts

The so-called argument of scale, developed by the German FCJ in its decision Clinical Trials II , provides a clear criterion of demarcation from an abuse of the experimental use exemption. If experiments are performed on a scale no longer justifiable as having an experimental purpose, they are not permissible experimental use acts within the meaning of §11 No. 2 GPA. Thus, the case law of the German FCJ prevents large-scale test series from flooding the market with patented substances so as to block the patent owner’s original products. Patent-protected products may therefore only be generated and used to an extent that is necessary to achieve the purpose of the desired research. Stocking of patent-protected products for the purpose of future marketing after the expiry of patent protection is not allowed.

Furthermore, abuse of the experimental use exemption by experiments carried out with the purpose of disturbing the inventor’s distribution of his or her product for an extended period of time is to be prevented. In this case, the experiments would only serve as a means for obtaining a competitive advantage. In practice, however, it will be difficult to prove that experiments were done with the intention of causing a disturbance when there actually exists a current research purpose. For example, in Example A, the experimental use exemption in favor of Dr. Straight would also be questionable in view of the “argument of scale.” Whereas experiments to verify the functionality of the protected DNA fragment as described in the patent would be allowed, an unlimited offer to all patients who are interested in testing their predisposition to abnormal hair growth is not permitted.

Research Tools

Patented research tools used in research not relating to the tool as such but to other subject matter are frequently required for studies and experiments. They involve, for example, laboratory equipment, chemical reagents, cell lines, antibodies, or the use of patented receptors for application in screening processes. In Example B, Dr. Affinity uses antibody 1 as a tool in his research for monitoring the CD390 surface antigen during hair follicle morphogenesis. In this case, the antibody as such is not the object of study and therefore does not fall under the research exemption of §11 No. 2 GPA.

Because the patent protection of research tools does not extend to the information generated therewith, no cease-and-desist claim exists for the use of the obtained data in further technical developments, even if the use of the tool was not authorized. 6

Research by Order

The question of whether research work can be outsourced to contractors has been and remains controversial among scholars. 7 However, the prevailing opinion in the literature is that, in principle, it should be possible to outsource research to contractors as long as the work remains focused on the subject matter of the patent. Therefore, it is advisable to specifically define the purpose of the contractual work in the respective agreements with the contractors. This is because the research exemption only extends to contractors who are aware that their work is performed in the context of privileged research.

Preparatory Acts

It is still not clear how far the experimental use exemption covers preparatory and supplying acts that are necessary for conducting any privileged experiment. In the pharmaceutical field, for example, this includes the development and preparation of antibodies for diverse diagnostic purposes, the development and production of tools for carrying out the tests required for obtaining a marketing authorization, and the production of test kits in accordance with the approval criteria laid down in pharmaceutical law. Here, a distinction must be made between, on the one hand, acts of the company subject to the experimental use exemption and, on the other hand, a third party’s supplying acts, such as the preparation and distribution of the patented object of study. Properly framed, the experimental use exemption should cover the production of the patented object by a company itself enjoying the right to conduct experiments under the experimental use exemption, provided that the form and volume of said production is exclusively directed to experimental purposes. As Dr. Curly’s research activities with the patent-protected substance are allowed in Example A, he is also free to produce the substance to be used in his tests. This approach prevents the experimental use exemption from being undermined in cases in which the object of study cannot readily be purchased and the patent owner refuses to give his or her consent to the use thereof.

In contrast, the question of whether a third party would fall under the experimental use exemption, where contracted to prepare and distribute the object of study for privileged experiments (but not to perform the experiments themselves), is more difficult to answer. In patent literature, the view is occasionally held that the experimental use exemption covers such supplying acts 8 provided that the supplier knows that the recipient intends to use the received products/means only for performing research on the protected subject matter.

The wording of §11 No. 2 GPA however, also suggests that acts done for experimental purposes are only privileged as long as they are carried out for performing the experiment. 9 The fact that the offer and sale of patent-protected test substances by the above third party are not acts done for experimental purposes is an argument against extending the privilege to cover them. This view is supported by §§ 10(1) and (3) GPA, which provide that the supply of material constitutes an act of indirect infringement even if the recipient might be privileged according to the research exemption.

For example, the District Court Düsseldorf denied the experimental use exemption for suppliers of test substances in its judgment dated July 3, 2012. 10 According to the court’s reasoning, the experimental use privilege can only cover such third-party activities if the suppliers can be considered as coparticipants of the research with an individualized interest in gaining further knowledge regarding the patent-protected substance. Based on this ruling, the supplier Ab Inc. in Example B would not be allowed to produce the patent-protected antibody 1.

In practice, it would not be appropriate to completely disregard the experimental use exemption for third parties’ supplying acts. For example, in cases in which the privileged company itself was not capable of preparing the relevant test kits, this would lead to the experimental use exemption becoming void. Thus, if the contract was drafted accordingly, the customer’s privileged experimental activities should be able to have a favorable effect on the supplier. The contract might include a recital of the specific experiments and a provision according to which the materials supplied must be exclusively used as objects of study. With contract language limiting the use of the supplied material to privileged experiments only, the production and distribution of the materials should likewise have to be considered as privileged use acts. According to the prevailing opinion in the literature, it is nevertheless not permitted to advertise and offer patent-protected test substances to an indefinite group of customers by merely stating “for experimental purposes.” 11 Based on the prevailing opinion in patent literature, production and supply of patent-protected antibodies are allowed.

Bolar Provision

The exemption regulated by §11 No. 2b GPA provides that the effects of a granted patent do not extend to studies and trials, including their practical requirements, necessary for obtaining drug approval for the marketing of a drug within the EU or drug approval in a member state of the EU or abroad. This exemption is similar to the so-called Roche-Bolar (safe harbor) exemption in the United States. It is limited to research purposes for obtaining market approval for a pharmaceutical compound. However, within this range, its scope of exemption is broader than the exemption regulated by §11 No. 2 GPA. In particular, this Bolar-type exemption is not limited to research on the subject matter of a protected product or process but also allows research with a patent-protected product or process. According to the prevailing opinion of scholars, the use of a patented research tool will therefore fall under the Bolar exemption of §11 No. 2b GPA if the use of the tool is necessary for obtaining approval data or if it is explicitly required by the approval authority. 12

The German Bolar provision is not limited to generics but also covers trial activities with innovative drugs for the purpose of obtaining regulatory approval.

Based on the above principles, Dr. Curly’s clinical trials are allowed by the Bolar exemption as long as the trials are necessary for obtaining data required in the approval proceedings. Studies that are undertaken with a view to filing applications for marketing authorizations outside the EU also fall under the scope of the Bolar exemption in Germany. Therefore, it is not detrimental for the Bolar privilege in Germany that Dr. Curly seeks pharmaceutical approval only for the United States and not for Europe.

As to Dr. Specific’s pilot studies, it has to be noted that mere preclinical research with the aim of developing new pharmaceuticals is not covered by the Bolar exemption of §11 No. 2b GPA. Contrary to the legal situation in the United States, 13 it is not sufficient, according to German patent law, that the experiments merely have a peripheral reference to the pharmaceutical approval proceedings. Rather, it is necessary that the studies and trials are necessary for directly obtaining data required in the approval proceedings. However, the exemption of preclinical research having the purpose of determining the suitability of substances for the development of new pharmaceuticals should generally be covered by the research exemption, according to §11 No. 2 GPA (see “Research Privilege” above). As a consequence, Dr. Specific’s activities are covered by the experimental use exemption.

THE SITUATION IN OTHER MEMBER STATES OF THE EU

United kingdom.

§60 of the U.K. Patents Act (UKPA) defines direct and indirect infringement of patent rights and provides for certain exemption from infringement, which (like in Germany) have been modeled on the European Patent Convention.

The U.K. Experimental Use Exemption

An act that would constitute an infringement of a patent for an invention shall not do so if it is done for experimental purposes relating to the subject matter of the invention (§60(5)(b) UKPA).

In the Monsanto decision ( Monsanto Co. v. Stauffer Chemical Co. (1985) (RPC 515)), which is still considered to be settled U.K. law, the court held that the U.K. “experimental use” exemption covers activities that seek to generate genuinely new information but not those that seek to verify existing knowledge. For example, in the Monsanto case, it was held that field trials carried out in order to (1) discover something unknown, (2) test a hypothesis, (3) find out whether something that is known to work in specific conditions would work in different conditions, or (4) see if the experimenter could manufacture commercially in accordance with the patent could “fairly be regarded as experiments.” However, trials to demonstrate to a third party or to amass information to satisfy a third party such as a regulatory body or customer that a product works as its maker claims are not to be regarded as acts done for experimental purposes. The key question in each case is whether or not the studies or tests have been carried out to advance scientific knowledge and determine something new. If so, then they should be exempt under §60(5)(b) UKPA insofar as they relate to the subject matter of the invention. According to the Monsanto decision, this would cover:

experiments directed to the patented invention as such, experiments such as testing whether a patented product can be made, or a patented article made to work, as described in the patent specification, or experiments to see whether the patented invention can be improved or testing the effect of the modification in some particular to see whether it is an improvement or not. But the limitation would … exclude from the exemption … use of a patented article or process in experiments to test or evaluate some other product or process. 14

The U.K. Bolar Exemption

An act which would constitute an infringement of a patent for an invention shall not do so if it consists of an act done in conducting a study, test, or trial which is required for the purpose of regulatory approval of generic medicinal products (§60(5)(i) UKPA).

In line with the relatively restrictive approach to the experimental use exemption explained above, the implementation of Directive 2004/27/EC (amending Directive 2001/83/EC) in the United Kingdom through §60(5)(i) UKPA is narrow, applying only to studies, tests, or trials conducted in the context of abridged, hybrid, and biosimilar applications for regulatory approval of generic or similar biological medicinal products to an approved patented product.

In particular, it would not appear to extend to phase 1, 2, and 3 clinical trials of new chemical entities, in respect of which a defense must still be sought under the experimental use defense under §60(5)(b) UKPA.

Directive 2001/83/EC applies to medicinal products for human use intended to be placed on the market in member states (article 2) and the United Kingdom. The Bolar exemption would therefore seem to apply regardless of whether the trial is conducted in the United Kingdom with the intention of applying for marketing authorization in the United Kingdom or in any other European country.

The questions of whether the use of a patent-protected product as a research tool would be protected under the U.K. Bolar exemption as long as it is necessary for obtaining data necessary for a marketing approval, as appears to be the case in Germany, has not been considered by the English courts.

In 2012, the U.K. government initiated a consultation exercise to consider whether the existing narrow Bolar-like exemption should be expanded. The results of that consultation led to the conclusion that §60(5) of the Patents Act 1977 will be amended to exempt all activities involved in preparing or running clinical or field trials with innovative pharmaceuticals that are conducted for the purpose of obtaining regulatory approval in any country. It is foreseen that the amendments to the law will come into force by a Legislative Reform Order on October 1, 2014.

The Experimental Use Exemption in France

According to article L. 613-5 of the French Code of Intellectual Property, the rights afforded by the patent shall not extend to acts done for experimental purposes relating to the subject matter of the patented invention, to studies and trials required with a view to obtain a marketing authorization for a medicinal product, as well as to acts necessary for their performance and for obtaining the authorization.

The Paris First Instance Court in 2001 ruled that phase 3 clinical trials performed on a medicinal product that is not a generic product were covered by Paragraph b. 15 For this exemption, a restrictive interpretation should be given, and this rule cannot apply to acts with mere business purposes. As in Germany, the experiments must be conducted on the patented invention and not with the patented invention, that is to say, where the patented invention is used as a tool.

The French Bolar Exemption

According to the French Bolar exemption, the privileged acts must be necessary for the performance of clinical trials as required by the regulatory authorities. The trials must be required with a view to obtaining a marketing authorization for a medicinal product.

French law does not specify whether the marketing authorization should be French. Some authors consider that the exemption also covers the trials performed to obtain a foreign marketing authorization, but it is not obvious that French courts would follow such a position.

As with the German system, the French legislators did not seem to limit the exemption to generic products. However, there is still no relevant case law on this issue. Some authors consider that the legislators did so on purpose and that the exemption should not be limited to generics. 16

In 2006, the so-called Bolar clause was included within the scope of the experimental use exemption in Spain. According to Article 52, paragraph (b) of the 11/1986 Spanish Patent Act, the scope of protection conferred by the patent does not cover acts made for an experimental purpose whose object consists of the patented invention. Such acts “include studies and tests carried out with the aim of obtaining a marketing authorization of generic drugs in or outside Spain, along with the necessary practical requirements, including the preparation, obtaining, and use of the active principle for these purposes.”

The Experimental Use Exemption in Italy

Under Article 68 of the Italian Code of Industrial Property, the exclusive right granted by a patent does not extend, irrespective of the object of the invention, to acts carried out in an experimental manner; to studies and experiments aimed at obtaining, also in foreign countries, an authorization for the placing on the market of a drug; or to the consequent practical fulfillments thereof, including the preparation and use of pharmacologically active raw materials strictly necessary for such purpose.

According to the experimental use exemption, it is allowed to use patented products to the extent that the research work is finalized to improve the patented invention. The mere application of the patented product is instead not permitted. The difference between improving and applying a patented product is determined by observing the type of the experiments actually performed by the unauthorized patent user. The purpose of said experiments is irrelevant.

The Italian Bolar Exemption

With regard to the implementation of the Bolar provision in Italy, studies and experiments aimed at obtaining, also in foreign countries, an authorization for the placing on the market of a drug are permitted. The Bolar exemption includes principally the preparation and use of pharmacologically active raw materials strictly necessary for test purposes.

By using the expression in the Bolar provision “also in foreign countries,” Italian law does not distinguish among an Italian authorization, an authorization in the EU, and an authorization outside the EU.

Furthermore, as in the German and French systems, the Italian legislature also does not limit the exemption to generic products.

The Netherlands

The dutch research exemption.

In The Netherlands, the research exemption has been laid down in Article 53(3) of the Dutch Patent Act. This article provides that acts solely serving for research on the patented subject matter, including the product obtained directly as a result of using the patented process, do not infringe the exclusive right of the patent owner.

Dutch courts apply the research exemption restrictively. Only purely scientific acts that exclusively serve for investigating the patented invention are privileged. Market research or large-scale manufacture is not allowed.

The Dutch Bolar Provision

The Bolar provision, which is supplementary to the research exemption, has been implemented in Article 53(4) of the Dutch Patent Act. This article provides that conducting the necessary studies, tests, and trials within the context of obtaining a market authorization for a generic medicinal product (hybrid generics and biosimilars included) shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products. The Dutch Bolar provision is limited to generics.

Both bioavailability studies, which are required within the context of true generic applications, and preclinical tests and clinical trials, which are required within the context of hybrid applications and biosimilar applications, are permitted to be performed.

This overview on the legal requirements, the extent, and the limitations of experimental use exemptions in the EU demonstrates that patent law allows sufficient room for research activities to promote innovation. This is not only true for tests and experiments to uncover new knowledge about patent-protected products, substances (and their supply), methods, and devices, but also holds true for clinical trials conducted with the purpose of registering and marketing medicinal products.

1 DNA molecules, including genomic DNA and cDNA, have been and are considered patentable in the European Patent Office; see, for example, T 1213/05 (Breast and ovarian cancer/UNIVERSITY OF UTAH), T 18/09 (Neutrokine/HUMAN GENOME SCIENCES), and T 80/05 (Method of diagnosis/UNIVERSITY OF UTAH).

2 BGH NJW 1996, 782.

3 BGH NJW 1997, 3092.

4 German FCJ decision of June 2, 1981, GRUR 1981, 734 ( Erythronolid ); LG Berlin decision of September 25, 1984, GRUR 1985, 375 ( Klinischer Test ); District Court Düsseldorf decisions of December 4, 1984, and March 5, 1985, GRUR Int. 1986, 807 ( Feldversuche ); and German FCJ decision of February 21, 1989, GRUR 1990, 997 ( Ethofumesat ).

5 Cf. Mes , §11 GPA, marginal no. 7.

6 Cf. von Meibom/vom Feld, Durchgriffsansprüche (Reach-Through-Ansprüche) bei Patenten für Forschungszwecke, Festschrift für Kurt Bartenbach (2005), pp. 385, 390 et seqq.

7 See, for example, Benkard/Scharen , GPA, 10th edition 2006, §11, marginal no. 8.

8 Cf. Fähndrich/Tilmann , Patentbenutzende Bereitstellungshandlungen bei Versuchen, GRUR 2001, 901.

9 Cf. Benkard/Bruchhausen , §11 GPA, marginal no. 6, who in this connection refer to an early decision of the Supreme Court of the German Reich according to which the sale of a patented device to be used by the customer for experimental purposes or for inspiring him to improvements was not exempted from patent protection.

10 BeckRS 2013, 01711.

11 Cf . Chrocziel , Die Benutzung patentierter Erfindungen zu Versuchs- und Forschungszwecken, MIP-Schriftenreihe Bd. 67, Koln, 1986, 195; Straus , GRUR 1993, 308, 311; Chrocziel/Hufnagel , Versuchsprivileg und Unterstützungshandlungen: Abgrenzungsfragen im, “Bermuda-Dreieck” der Doppelparagraphen 9, 10, 11 Nr. 2/2b GPA, Festschrift Mes, 2009, p. 59 et seqq.

12 Cf. Holzapfel , Die patentrechtliche Zulässigkeit der Benutzung von Forschungswerkzeugen, GRUR 2006, 11 set seqq; von Meibom/vom Feld, Durchgriffsansprüche (Reach-Through-Ansprüche) bei Patenten für Forschungswerkzeuge, Festschrift für Kurt Bartenbach (2005), pp. 385, 398.

13 In Merck KGaA v. Integra Life Sciences I, Ltd ., the Court of Appeal of the Federal Circuit (CAFC) decided on July 27, 2007, the extent of the Bolar exemption. In said case, Merck had used a specific peptide sequence in experiments for researching angiogenesis inhibition, on which peptide Integra held patent rights. These experiments were directed to determining whether various peptides covered by the patent were suitable for pharmaceutical use. The CAFC held that the safe harbor exemption did not apply on the grounds that the experiments performed were not reasonably related to the development and submission of information to the FDA and that some of the data obtained were not used for approval purposes. The Supreme Court reversed the judgment of the CAFC and remanded the case for a renewed decision. According to the findings of the Supreme Court, it is sufficient if the experiments reasonably relate to FDA approval proceedings. Thus, the preclinical trials were covered by the Bolar exemption.

14 Monsanto Co. v. Stauffer Chemical Co . (1985) RPC15.

15 TGI Paris, February 20, 2001.

16 J. Armengaud and E. Berthet-Maillol, “La loi du 26 février 2007 transposant la Directive 2004/27 CE ou le coup de pouce donné aux génériques,” Propriétés intellectuelles , April 2007, no. 23.

Editors: Salim Mamajiwalla and Rochelle Seide

Additional Perspectives on Intellectual Property in Molecular Medicine available at www.perspectivesinmedicine.org

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Patent Eligibility Reform Introduced in the U.S. House of Representatives

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Today Representatives Kevin Kiley (R-CA) and Scott Peters (D-CA ) introduced the Patent Eligibility Restoration Act (PERA) , bipartisan legislation mirroring a proposed law introduced last year by Senators Thom Tillis (R-NC) and Chris Coons (D-DE). The proposed law seeks to restore patent eligibility to inventions across many fields and affirms the basic principle that the patent system is central to promoting technology-based innovation.

Is such legislation a good idea? Representative Kiley has provided a summary of his reasons for introducing it.

Patents currently operate under a two-tiered system. Some novel inventions are allowed the benefits of the patent system, and some (especially in software and medical diagnostics) are deemed “ineligible” for this privilege. Understandably, this is frustrating to the inventors and companies developing these inventions. Why the different tiers? The distinction arose because some judges believed that some inventions are too universal or too abstract to warrant the multi-decade exclusivity of a patent—even if these inventions met the other legal requirements for receiving a patent, such as being new, useful, and fully disclosed in the patent application.

The underlying law interpreted by these judges, 35 U.S.C. § 101 , is relatively permissive, stating in its text that anyone may receive a patent for any invention that falls within four broad categories: machines, manufactures, processes, and compositions of matter. In the early days of the statute, this meant that patents could be granted for “ everything under the sun made by man .” The statute’s language reaches back to the 1793 Patent Act, but Courts have also applied various non-statutory “exceptions” to what inventions or discoveries are eligible for patenting. One controversial exception prohibits attempts to patent what the courts call “abstract ideas.” The Supreme Court’s recent decisions in the 2012 Mayo and 2014 Alice cases further strengthened the barriers prohibiting some inventors and industries from obtaining protection under the patent system.

The law newly proposed in the House (PERA), attempts to tackle the problems of the two-tiered system.

The Senate Judiciary Committee held a hearing on PERA on January 23, 2024. Among its many provisions, PERA would amend Section 101 to provide that:

. . . any process that cannot be practically performed without the use of a machine (including a computer) or manufacture shall be eligible for patent coverage.

This would likely be interpreted by the courts as allowing software and medical diagnostic patents that present law does not allow. A similar “practicality” standard was previously proposed by former U.S. Patent and Trademark Office director Andrei Iancu , referenced in previous guidance from the USPTO to its examiners, and has roots in case law more than a century old:

It is true that a patent can not be sustained for a mere principle. For instance, Sir Isaac Newton’s discovery of the principle of gravitation could not be the subject of a patent. But it is equally true, that a principle may be embodied and applied, so as to afford some result of practical utility in the arts and manufactures, and that under such circumstances a principle may be the subject of a patent. It is, however, the embodiment and the application of the principle which constitute the grant of the patent.

Wintermute v. Redington , 30 F. Cas. 367, 370–371 (C.C.N.D. Ohio 1856).

Proponents of PERA emphasize that enacting the law would restore 35 U.S.C. § 101 to its previous status as a basic threshold test, and allow patents to be further evaluated under the standard historical tests set forth in 35 U.S.C. §§ 102, 103, and 112.

PERA is a compromise, however, because it codifies some aspects of judge-made law, such as denying eligibility to any invention of “a process that is substantially economic, financial, [or] business,” excluding, as patent ineligible, what are known today as “business method” patents. This is a change from historical patent law that granted such patents. It also differs from previous patent statutes by categorically excluding patents on particular discoveries, such as of a “gene [as it] exists in the human body,” contrary to the affirmative statement of permitted categories in § 101.

These compromises have led some to believe PERA is a mistake. They argue that it removes incentives for development in future unknown fields, and that it will put the U.S. at a competitive disadvantage to other countries that have more permissive patent eligibility requirements. Other arguments against PERA arise from a general hostility to patents, because they are perceived as being barriers to innovation rather than an integral part of our Constitution-based incentive system to encourage innovation.

If passed, PERA will substantially impact the U.S. patent system. Interested inventors, patent holders, and patent professionals should weigh in during the legislative process.

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