The Experimental Use Exception to Patent Infringement and 35 U'S'C' 271e1

1
The Experimental Use Exception toPatent
Infringement and 35 U.S.C. 271(e)(1)

• Soonhee Jang, Eli Lilly and Co.
• and
• Joerg-Uwe Szipl
• AIPLA-JPC
• April 19, 2004

2
The Experimental Use Exception toPatent
Infringement

• Madey v. Duke Univ.
• 307 F.3d 1351, 64 U.S.P.Q.2d 1737 (Fed. Cir.
  2002)
• cert. denied, 123 S.Ct. 2639 (2003)
• The experimental use defense to infringement is
  very narrow and strictly limited

3
The Research Use Exception toPatent Infringement

• Madey v. Duke Univ. (contd)
• FACTS
• Madey was sole owner of certain patents used in
  his lab at Duke University.
• Madey left Duke, which continued to operate some
  of the equipment in the lab.
• Madey sued for infringement
• Duke asserted the defense of experimental use.

4
The Experimental Use Exception toPatent
Infringement

• Madey v. Duke Univ. (contd)
• HOLDING
• The burden is on the defendant to establish the
  experimental use defense.
• The defense is very narrow
• Acts in in furtherance of the alleged
  infringers legitimate business and not solely
  for amusement, to satisfy idle curiosity, or for
  strictly philosophical inquiry do not qualify.
• Non-profit status carries little weight.
• University research was in furtherance of the
  legitimate business was educating and
  enlightening students and faculty.

5
Regulatory Approval Exception of 35 U.S.C.
271(e)(1)

• Integra Lifesciences v. Merck KgaA
• 331 F.3d 860, 66 U.S.P.Q.2d 1865 (Fed. Cir.
  2003) rehg rehg en banc denied, (Dec. 3,
  2003)
• FACTS
• Patentee Integra owned patents covering the RGD
  peptide (glycine-arginine-aspartic acid) which
  binds integrin receptors.
• In support of Defendant Merck KgaA, Scripps
  scientists discovered a potential therapeutic
  application of RGD peptides (cyclic peptide) as
  anticancer drug and as a treatment for various
  other diseases.
• Collaboration agreement between required
  scientists at Scripps to conduct animal tests and
  develop all data the FDA might require before it
  would permit the drug to advance to clinical
  trials on human subject.
• Patentee Integras offer of a license was
  rejected, and Integra sued for infringement.

6
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Integra Lifesciences v. Merck KgaA
• ISSUE
• Whether the preclinical research (i.e.,
  identifying the new drug candidate) is exempted
  from liability for infringement of patent under
  the safe harbor provision (35 U.S.C. 271(e)(1)).
  
• In other words,
• Whether the safe harbor provision only applies to
  activities involving registration of generic
  copies of drugs already on the market for which
  the patent is about to expire.

7
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• (e)(1) It shall not be an act of infringement to
  make, use, offer to sell, or sell or import
  into the United States a patented invention
  (other than a new animal drug or veterinary
  biological product which is primarily
  manufactured using processes involving site
  specific genetic manipulation techniques) 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.

8
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Purpose of the 1984 Act
• To Restore patent term to pharmaceutical
  inventions to compensate for the regulatory delay
  caused by the FDA in approving a new drug during
  their patent term and
• To ensure that a patentees rights did not de
  facto extend beyond the patent term because of
  the time for a competitor (i.e., generic) to
  obtain regulatory approval.
• Question What activities are reasonably
  related ?

9
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Legislative History
• Legislation passed in response to Roche Products,
  Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858,
  221 USPQ 937 (Fed. Cir. 1984), and represents a
  compromise between research-based pharmaceutical
  companies and generic drug manufacturers.
• Allows competitor to conduct experiments in
  advance of the patent expiration if those
  activities were reasonably related to securing
  regulatory approval of generic drugs
• Permits pre-market approval activity (e.g.,
  bio-equivalency testing of a generic substitute)
  conducted for the sole purpose of sales after
  patent expiration
• The exempt activity considered as de minimus
  rather than substantial with respect to the
  rights of the patent holder since all that
  generic can do is test the drug for purposes of
  submitting data to the FDA for approval

10
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Integra Lifesciences v. Merck KgaA
• Use of a patented peptide in pre-clinical
  experiments did not come within statutory safe
  harbor of 35 U.S.C. 271(e)(1) protecting uses
  reasonably related to the development
  submission of information to the FDA.
• An interpretation such as that asserted by
  defendant would essentially vitiate the
  exclusive rights of patentees to research tool
  patents

11
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Integra Lifesciences v. Merck KgaA
• The term reasonably related tosubmission of
  information does not embrace all activity in RD
  chain simply because they lead to an FDA approval
  process, but rather covers those activities
  reasonably related to acquiring FDA approval of a
  drug already on the market as contrasted with
  experiment producing information the FDA
  considers in approval human trials for a new drug.

12
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Integra Lifesciences v. Merck KgaA
• HOLDING
• The pre-clinical research conducted was not to
  supply information to the FDA, but to identify
  new pharmaceutical compounds, therefore outside
  the scope of solely for uses reasonably
  related.
• Experiments conducted by defendant using claimed
  peptides to develop new drugs held to be
  infringement.
• 15,000,000 damages award for reasonable
  royalty was not supported by substantial
  evidence and case was remanded for proper damages
  award.

13
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Earlier Cases in Point
• Eli Lilly Co., v. Medtronic, Inc., 496 U.S.
  661 (1990)
• Safe harbor provision applies to the development
  of new drugs entire statutory scheme of
  regulation under the FDAs domain includes
  medical devices, food additives, color
  additives, new drugs, antibiotics drugs, and
  human biological product.
• AbTox, Inc. v. Exitron Corp., 122 F.3d 1019
  (Fed. Cir. 1997)
• The safe harbor refers to an entire statutory
  scheme of regulation, not merely to a particular
  subsection related to generic drugs.
• Bristol-Meyers Squibb Co. v. Phone-Poulenc
  Rorer, Inc., 2001 WL 1512597 (S.D.N.Y. Nov. 28,
  2001)
• the contention that Section 271(e)(1) only
  applies after a drug candidate has been selected
  or filed with the FDA would have the effect of
  preventing competitors from experimenting with
  patented inventions in order to create new or
  improved drugs, a result that would seem to
  negate Congresss intent to have new drugs come
  to market without delay upon the expiration of a
  patent

14
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Integra Lifesciences v. Merck KgaA
• CONCLUSIONS
• Safe harbor covers only the ultimate phase in
  the drug-approval process (i.e., test necessary
  for filing and obtaining approval of ANDA)
• Clinical studies with humans are reasonably
  related to the drug approval process and thus
  protected
• Preclinical studies, such as in-vitro/in-vivo
  testing to identify and develop new drugs are not
  protected
• Does not reach back down the chain of
  experimentation to cover development of new
  drugs, that will in turn be subject to FDA
  approval

15
The Regulatory Approval Exception35 U.S.C.
271(e)(1)

• Whats Next
• Merck KGaA filed a petition for Writ of
  Certiorari
• Research collaboration between pharmaceutical
  companies and scientific community at risk due to
  a treat of litigation involving research tool
  patents
• Need to reevaluate and/or scrutinize the use of
  patented technology in preclinical RD activities
• Stop on-going research?
• Seek licenses on patented research tools, or take
  a risk of exposing to potential litigation