United States: Is the Experimental Use Defense Dead? An Examination of Amusement, Idle Curiosity, and Strictly Philosophical Inquiry

The Federal Circuit’s 2004 opinion in Madey v. Duke ("Madey")¹ brought a spotlight to the continuing viability of the common law research exemption from patent infringement, a seldom-seen fixture of judge-made law for nearly 200 years. More recently, this experimental use defense surfaced in the Integra Life Sciences I Ltd. v. Merck KgaA ("Merck")² case, more notable for its complete absence in the Supreme Court’s decision after Judge Newman’s defense of the doctrine in her dissent in Merck. The Merck case drew significant interest from across the spectrum, attracting 18 amicus briefs, unusual in a patent case. While the primary issue in Merck was the scope of the Hatch-Waxman statutory research exemption codified in 35 U.S.C. §271(a), four of the amicus briefs addressed the common law experimental use defense, highlighting its significance in the area of emerging biotechnology research.

The infringement exclusion provided by the research exemption first originated with Justice Joseph Story in Whittemore v. Cutter³ in 1813. According to Justice Story, the property rights allocated in the Patent Act of 1793 did not extend to their broadest literal interpretation of the exclusive right to make use or sell the patented invention, and Congress could not have intended "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." Id. at 1121. In another early case, Justice Story elaborated that infringement occurs only when one is "making with an intent to use for profit, and not for the mere purpose of philosophical experiment, or to ascertain the verity and exactness of the specification."⁴ Later cases show that the term "philosophical," as used in Whittemore I, is synonymous with the term "scientific," and by 1890, the issue of whether experimentation amounted to patent infringement seemed to have been clearly resolved: it did not.

With the blossoming of the generic drug industry in the 1980’s, questions arose as to whether the activities required to receive Food and Drug Administration approval of generic drugs was considered infringing. Without the ability to work toward FDA approval of a generic prior to the drug coming off patent, the public’s access to the generic drug substitute would suffer a long delay following the patent’s expiration. The Federal Circuit’s decision in Roche Products v. Bolar⁵ reasoned that the approval work was not experimental, and therefore the experimental use exception did not apply. Significantly, the decision did not turn on Bolar’s for-profit status.⁶ Congress moved promptly to enact a statutory experimental use defense in the Hatch-Waxman Act, providing an infringement defense "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 . . .."⁷

The result was the availability, post Roche, of two experimental use defenses: the original common law research exemption first enunciated by Justice Story, and the statutory defense established in the Hatch-Waxman Act in 1984.

The original common law research defense was rarely litigated, but in 2000, the Federal Circuit revisited its viability and scope in Embrex v. Service Engineering Corp.⁸ In Embrex, the court found no exemption where Service Engineering Corporation’s ("SEC") use of the patented method infringed when SEC performed the tests expressly for commercial purposes. Although dicta in Judge Rader’s concurrence in Embrex suggested that because intent is irrelevant to a finding of patent infringement, no experimental use defense can exist, that is neither the controlling law nor consistent with the Federal Circuit’s precedent. The defense was arguably intended to promote valuable basic research and experimental science, and it does not contain any element of intent.

That the research defense lives on with no test for intent, albeit in a very narrow form, was made clear in the Federal Circuit’s 2002 decision in Madey v. Duke.⁹ In Madey, the district court allowed the research defense exemption on the basis of Duke’s status as a non-profit university, but the Federal Circuit reversed, focusing once again on the use of the invention. "On remand, the district court will have to significantly narrow and limit its conception of the experimental use defense. The correct focus should not be on the non-profit status of Duke but on the legitimate business Duke is involved in and whether or not the use was solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry."¹⁰ Interestingly, these three stated uses have never been explored within the slight body of law interpreting the research defense, and have not formed the basis for any holding.

The Federal Circuit most recently considered the statutory research safe harbor exemption of 35 U.S.C. §271(e)(1) in the case of Integra LifeSciences I Ltd. v. Merck KgaA,¹¹ and Judge Newman used the opportunity to further address the scope of the common law research exemption. Merck funded research to identify potential drugs blocking interactions with integrin receptors, leading to the development of a drug candidate. The researcher tested to assess activity of RGD peptides covered by Integra’s patents, and Merck declined Integra’s offer to license the patents, relying upon the safe harbor exemption. The Federal Circuit found for Integra, narrowly interpreting §271(e) to preclude its application to the development of information not included in a submission to the FDA for a new drug application, or not otherwise applicable to the research relevant to filing an ANDA for approval of a generic drug.¹² Because Merck stated that the common law research exemption was not relevant to its appeal,¹³ the Federal Circuit expressly noted that the question was not before the court. Nevertheless, Judge Newman’s opinion concurring in part and dissenting in part was remarkable in setting forth the landscape of the research exemption and its relationship to the §271(e) statutory exemption.¹⁴ According to Judge Newman, the research exemption distinguishes the use of a patented subject matter in one’s research, which is infringement, with the study of the patented subject matter, which is exempted.¹⁶

Merck’s appeal to the Supreme Court resulted in the submission of numerous amicus briefs pressing views on the scope and application of the common law experimental use defense. Amici urged the court to find no infringement under the common law defense, or to refuse to address the defense because it was not squarely raised below, the latter perhaps out of a concern that were Supreme Court to do so, it might eliminate the defense entirely. In the end, the Court stayed silent, leaving Madey v. Duke as the current word on the subject. Given the relative rarity of patent issues making an appearance on the Supreme Court docket, and considering the Federal Circuit’s virtually exclusive jurisdiction on all things related to patents (preventing the development of a split among circuits that might focus the Supreme Court’s attention on an issue of law deserving of its attention), it seems unlikely that the common law experimental use defense will be in front of the Supreme Court in the foreseeable future.

Absent case law more clearly defining the limits of the experimental use exception, researchers can look to Judge Newman’s Merck opinion in Merck for the articulation of its scope. She dissented from the Federal Circuit’s conclusion, reasoning that Merck’s research was either within an experimental use exception as "exempt exploratory research," or within the safe harbor of 271§(e). Describing a continuum, Judge Newman pointed out the absurdity of doing research that fell within neither exemption:

Id. at 1877. But Judge Newman also recognized that the common law research exemption is still a narrow one, where not all uses related to research are exempt from infringement. This is a particular concern for the pharmaceutical and biotechnology industries where improved laboratory research efficiencies have resulted from research tools.

Id. At 1876

The National Academies recently reported on "A Patent System For The 21^st Century."¹⁷ In considering whether patent thickets or other restrictions were impeding access to basic breakthroughs, the report posited that the Madey opinion undercuts practices where infringement – either known or innocent – is condoned under a belief that it is research shielded from liability. Going farther, the report states that Madey could reasonably be interpreted to hold "that formal research enjoys no absolute protection from infringement liability regardless of the institutional venue, the purpose of the inquiry, the origin of the patented inventions, or the use that is made of them."¹⁸ In a twist, the report recommended providing an exemption to infringement for fundamental research that promotes the sciences and advances knowledge, and suggested either legislation to create such an exemption, or the assumption by the federal government of patent infringement liability for researchers funded by federal grants.¹⁹

That assessment seems overly grim, as Madey turned primarily on Duke’s status as a private institution. Unfortunately, the report did not consider Judge Newman’s discussion of the experimental use defense, and how that interpretation might well address the Academies’ concern, without the need for further legislation or the federal government’s broad assumption of liability.

The Supreme Court’s silence on the common law research defense in Merck v. Integra leaves Judge Newman’s articulation of the defense in the Federal Circuit’s Merck opinion the latest, and most thorough modern take on the defense. Furthermore, Judge Newman’s articulation is also consistent with the historical development of the doctrine, and suggests a sound patent policy. It remains to be seen how the doctrine will be applied going forward, but is certainly not dead, and its importance to the future development of drugs century remains unchanged.

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