United States: Some Observations Regarding Patent Infringement In The United States

Up to about 15 years ago the basic United States definition of patent infringement was narrow and easily understood in virtually every line of endeavour in which patents play an important role. This definition — that infringement constitutes making, using or selling embodiments of the patented invention during the life of the patent without the patent owner’s consent — had its genesis in the first patent act of 1790 ¹ and subsisted with no change in substance up through the United States Patent Act of 1952. ²

In 1952, Congress added to the infringement statute an explicit provision making anyone who actively induced another to infringe a patent "liable as an infringer" ³ and another pro-vision defining contributory infringement as the intentional, unauthorised sale of a material component of the patented invention that was especially adapted for use in that invention. ⁴ The statutory language adopted to define contributory infringement made plain that an accused component that was proved at the trial of an infringement suit to be a staple article of commerce or to have a substantial and real (as opposed to hypothetical or conjectural) non-infringing use would not fall within the scope of contributory infringement. The Senate Report that accompanied the 1952 enactment indicated that the combined doctrine of induced and contributory infringement had "been part of our law for about 80 years" ⁵ because they had been applied in decisions of the courts relating to patent infringement.

Commencing in 1984, Congress embarked upon reshaping the infringement law to accommodate demands of various groups who: (1) were dissatisfied with aspects of the application by the courts of existing patent infringement law to certain specific fact situations; (2) wanted the patent law and the Federal Food, Drug and Cosmetic Act to be specifically attuned to one another in some respects; or, (3) recognised a need or desirability for conforming certain US concepts of infringement to those observed in other countries, especially other industrially advanced countries. The combined effect of the various statutory changes adopted has made US infringement law and its application exceedingly complex — and this is nowhere more manifest than in the area of patents that cover inventions in the pharmaceutical field.

Chronologically, the first significant changes to the 1952 version of 35 U.S.C. §271 occurred in 1984, when Congress enacted two changes. One such change was motivated by the result in Deepsouth Packing Co. v. Laitram Corp., ⁶ and it related to what were then commonly called "combination" patents wherein the patented invention consisted in combining old components or ingredients into a new and useful product wherein each component performed the same function it was known to perform outside the combination. In such patents, the patentable invention was deemed to be the combination. The Deepsouth case concluded that the patented invention — the combination — could not exist until all of its components were assembled into the combination; hence, merely packaging all the components and the directions for assembling them in one container and then shipping the container to another country meant that the patented combination never existed in the US, thereby precluding a finding of patent infringement under US law. Congress reacted to this by making it an infringement of a ‘combination’ patent to supply either all components of the patented invention or those components especially made or adapted for use in the patented invention with the intent that they be assembled outside the United States into the patented combination. ⁷

In its other, separate 1984 enactment, amending §271, Congress responded rapidly to concerns that arose based on Roche Products, Inc. v. Bolar Pharmaceutical Co., ⁸ a 1984 decision of the United States Court of Appeals for the Federal Circuit which held in essence that the United States patent laws recognised no so-called "experimental use" exception to patent infringement in instances where the objective of the experimentation was the furtherance of the experimenter’s own business aims. In Roche, the defendant Bolar obtained a quantity of a patented pharmaceutical from a foreign source and commenced testing and data collection intended to support an application to the United States Food and Drug Administration for permission to market the pharmaceutical after the then impending expiration of the patent. Since the Federal Circuit’s decision rendered Bolar’s experimental and testing activities subject to injunction as a prohibited infringement of the not-yet-expired patent, Congress sought to define circumstances under which potential competitive manufacturers of drug and pharmaceutical products could do some testing prior to patent expiration.

The product of this effort, 35 U.S.C. §271(e), is not solely concerned with infringement. In one part, it creates a zone of freedom from infringement for certain patented drugs made, used or sold without patent owner authorisation if this is done "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." ⁹ In other portions, §271(e) creates an artificial ‘act of infringement’ which consists in the filing of an application under certain sections of the Federal Food, Drug and Cosmetic Act for clearance to sell a patented drug or a drug, the use of which is claimed in a patent, and it limits the remedies a court may order relative to such infringements. ¹⁰

In 1988, Congress adopted a law making an infringement of a United States process patent to import, use or sell a product made by that process outside the United States — even one that is per se unpatented or unpatentable in the United States — without the patent owner’s authorisation. The provision adopted specifies that such a product will "not be considered to be so made [i.e. by the patented process] after: (1) it is materially changed by subsequent processes; or, (2) it becomes a trivial and nonessential component of another product." ¹¹

The final substantive change to the 1952 statutory definition of patent infringement was made to bring the United States into comformity with a GATT treaty. This change — though enacted in 1994 ¹² actually went into effect on 1 January 1996. It adds to the basic infringing acts of making, using or selling patented goods in the United States without patent owner consent two additional such acts — namely, importing such goods without leave of the patent owner and offering them for sale if not authorised to do so by the patent owner.

Importantly, any of the changes in how patent infringement is defined that Congress adopted from 1984 to the present may impact any of the industries that support the practice of medicine in a given case, depending upon the patent involved and the particular facts of the infringement controversy. As has long been recognised, drugs, pharmaceutical products and biotechnology products, including US government-regulated medical devices (a term which includes not only medical, electromechanical and mechanical equipment from the simplest to the most complex but a wide variety of diagnostic tests and other medical-related paraphernalia) ¹³ represent areas of commerce in which patents play a very important role. In large part, this is because drugs and medical devices — unlike, for example, at least some forms of computer hardware and software — do not rapidly become obsolescent and usually achieve marketability only after extensive, years-long research and clinical testing involving significant investment on the part of their developers. It is not unusual for competition to exist in connection with every stage and aspect of making a particular patentable invention in these fields, obtaining market clearance for its sale and obtaining the patent which covers it. Such competition often breeds patent infringement suits, just as readily as the efforts of the ‘generic’ drug companies to prepare for post-patent expiration marketing have clearly done.

In short, every entity with a significant interest in manufacturing or selling drugs and medical devices in the United States needs to be certain that it has and avails of informed, skilled legal advice and assistance at every step of product planning. Companies outside the United States eager to participate in what is recognised to be the world’s largest market, in money terms, for drugs and medical devices need to be certain that their legal advisors are well-grounded in

applies in terms to medical devices as well as drugs those idiosyncrasies of American law, such as 35 U.S.C.§271(e) and (f) that find no counterpart in laws of other countries, as well as the subtleties of case law that may lead to different US interpretations of provisions adopted by countries worldwide.

It is also important to keep in mind that the American system of government often fosters legislative change — and that, even as scientific research continues to make increasingly sophisticated advances in medicine, biotechnology and pharmacology — the rapid changes in statutorily defining patent infringement that commenced in 1984 may proliferate during the new century.

1. Patent Act of April 10, 1790, Ch. 7, 1 Stat. 109-112; section 4.

2. 35 U.S.C. §271 (Act of July 19, 1952, Ch. 950, §1, 66 Stat. 811)

3. Id.

4. Id.

5. Senate Report No. 1979, 82d Cong., 2d Sess. (1952).

6. 406 U.S. 518 (1972).

7. See U.S.C. §271(f)..

8. 733 F.2d 858 (Fed. Cir. 1984) cert. denied, 469 U.S. 856 (1984).

9. 35 U.S.C. §271(e)(1); see also subsection (e)(3).

10. 35 U.S.C. §271(e)(2) and (4).

11. 35 U.S.C. §271(g).

12. Public L. 103-465 §533; 108 Stat. 4988.

13. In Eli Lilly v. Medtronic, Inc., 496 U.S. 661 (1990) the United States Supreme Court held that 35 U.S.C. §271(e)