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

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. (cont’d) 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. (cont’d) 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 infringer’s 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); reh’g & reh’g 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 Integra’s offer of a license was rejected, and Integra sued for infringement.

6. The Regulatory Approval Exception:35 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 Exception:35 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 Exception:35 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 patentee’s 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 Exception:35 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 Exception:35 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 Exception:35 U.S.C. § 271(e)(1) Integra Lifesciences v. Merck KgaA The term “reasonably related to…submission of information” does not embrace all activity in R&D 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 Exception:35 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 Exception:35 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 FDA’s 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 Congress’s intent to have new drugs come to market without delay upon the expiration of a patent”

14. The Regulatory Approval Exception:35 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 Exception:35 U.S.C. § 271(e)(1) What’s 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 R&D activities Stop on-going research? Seek licenses on patented research tools, or take a risk of exposing to potential litigation