Scientific Research and the Experimental Use Privilege in Patent Law
Released: 2004-10-28T00:00:00

Introduction to the Patent System

Patent Policy

The goal of the patent system is to promote the production and dissemination oftechnological information. Some observers believe that absent a patent system, individuals and firmswould be less likely to engage in research and development. Without the availability of patentprotection, new inventions could be easily copied by "free riders" who incurred no cost to developand perfect the technology involved, and who would therefore be able to undersell the originalinventor. The resulting inability of inventors to capitalize on their inventions would lead to anenvironment where too few inventions are made. By providing individuals with exclusive rights intheir inventions for a limited time, the patent system allows inventors to realize the profits from theirinventions. (16)

Other commentators believe that if the patent system were unavailable, individuals wouldmaintain their inventions as trade secrets so that competitors could not exploit them. Trade secretsdo not enrich the collective knowledge of society, however, nor do they discourage others fromengaging in duplicative research. The patent system avoids these inefficiencies by requiringinventors to consent to the disclosure of their inventions in issued patent instruments. (17)

Additional explanations for the patent laws have been offered. The Patent Act may stimulatetechnological advancement by inducing individuals to "invent around" patented technology. Issuedpatent instruments may point the way for others to develop improvements, exploit new markets ordiscover new applications for the patented technology. (18) Moreover, the patent system may encourage patentees tocommercialize their proprietary technologies during the term of the patent. The protection providedby a patent's proprietary rights increases the likelihood a firm will continue to refine, produce andmarket the patented technology. (19) Finally, the patent law has been identified as a facilitator ofmarkets. Absent patent rights, an inventor may have scant tangible assets to sell or license, and evenless ability to police the conduct of a contracting party. By reducing a licensee's opportunisticpossibilities, the patent system lowers transaction costs and makes technology-based transactionsmore feasible. (20)

The patent system has inspired numerous critics, however. Some detractors have assertedthat the patent system is unnecessary due to market forces that already suffice to create an optimallevel of invention. The desire to gain a lead time advantage over competitors, as well as therecognition that technologically backward firms lose out to their rivals, may well provide sufficientinducement to invent without the need for further incentives. (21) Others observe that theinventions that fueled many dynamic sectors of modern industry, such as biotechnologies andcomputer software, arose at a time when patent rights were unavailable or uncertain. (22)

While these justifications and criticisms have varying degrees of intuitive appeal, none ofthem has been empirically validated. No authoritative study conclusively demonstrates that societyobtains more rapid technological development with patents than it would without them. As a result,the rationales for, and criticisms of, the patent system remain open to challenge. (23)

Patent Acquisition and Enforcement

As mandated by the Patent Act of 1952, (24) U.S. patent rights do not arise automatically. Inventors mustprepare and submit applications to the U.S. Patent and Trademark Office ("USPTO") if they wishto obtain patent protection. (25) USPTO officials, known as examiners, then assess whether theapplication merits the award of a patent. (26) The patent acquisition process is commonly known as"prosecution." (27)

In deciding whether to approve a patent application, a USPTO examiner will considerwhether the submitted application fully discloses and distinctly claims the invention. (28) In addition, the applicationmust disclose the "best mode," or preferred way, that the applicant knows to practice theinvention. (29) Theexaminer will also determine whether the invention itself fulfills certain substantive standards setby the patent statute. To be patentable, an invention must be useful, novel and nonobvious. Therequirement of usefulness, or utility, is satisfied if the invention is operable and provides a tangiblebenefit. (30) To be judgednovel, the invention must not be fully anticipated by a prior patent, publication or other knowledgewithin the public domain. (31) A nonobvious invention must not have been readily within theordinary skills of a competent artisan at the time the invention was made. (32)

If the USPTO allows the patent to issue, the patent proprietor obtains the right to excludeothers from making, using, selling, offering to sell or importing into the United States the patentedinvention. (33) The termof the patent is ordinarily set at twenty years from the date the patent application was filed. (34) Patent title thereforeprovides inventors with limited periods of exclusivity in which they may practice their inventions,or license others to do so. The grant of a patent permits the inventor to receive a return on theexpenditure of resources leading to the discovery, often by charging a higher price than wouldprevail in a competitive market.

Patent rights are not self-enforcing. A patentee bears responsibility for monitoring itscompetitors to determine whether they are using the patented invention or not. Patent proprietorswho wish to compel others to observe their intellectual property rights must usually commencelitigation in the federal district courts. (35) The U.S. Court of Appeals for the Federal Circuit possessesexclusive national jurisdiction over all patent appeals from the district courts, (36) while the U.S. SupremeCourt possesses discretionary authority to review cases decided by the Federal Circuit. (37)

The Common Law Experimental Use Privilege

General Principles

Under the Patent Act of 1952, any individual who makes, uses, sells, offers to sell, or importsinto the United States a patented invention without the authorization of the patent owner facesliability for infringement. (38) Although the Patent Act authorizes a number of defenses to acharge of patent infringement -- such as that the patented invention does not meet the statutorystandards for patentability and was improvidently awarded a patent by the USPTO (39) -- the statute does notexpressly authorize a generally applicable experimental use privilege. The federal courts havenonetheless developed a "common law" experimental use privilege using their judicial powers.

Judicial decisions from the nineteenth century established the scope of the experimental useprivilege. In the first of these opinions, the 1813 case of Whittemore v. Cutter , (40) Justice Joseph Storyexplained that "it could never have been the intention of the legislature to punish a man, whoconstructed such a machine merely for philosophical experiments, or for the purpose of ascertainingthe sufficiency of the machine to produce its described effects." (41) Later, in Sawin v.Guild , (42) Justice Storyexplained that an unauthorized manufacture of a patented invention was not an infringement unlessit constituted "making with an intent to use for profit, and not for the mere purpose of philosophicalexperiment, or to ascertain the verity and exactness of the specification." The 1861 decision in Peppenhausen v. Falke further explained:

It has been held, and no doubt is now well settled, thatan experiment with a patented article for the sole purpose of gratifying a philosophical taste, orcuriosity, or for mere amusement, is not an infringement of the rights of the patentee. (43)

This judicial conception of the experimental use privilege has been described as"crabbed," (44) "narrowlyconstrued" (45) and "rarelysustained." (46) Asexplained in numerous judicial opinions, the experimental use exception applies only to uses donefor amusement, to satisfy idle curiosity or for strictly philosophical inquiry. (47) Any use that iscommercial in nature is not subject to the doctrine. (48)

The opinion of the Court of Claims in Pitcairn v. United States provides one example ofjudicial views concerning the experimental use privilege. (49) In that case, the U.S. government was accused of infringing 59patents relating to helicopters. The government contended that various aircraft used only forpurposes of testing and demonstration should be held not to infringe. The court disagreed,explaining:

Defendant urges the court to exclude fromcompensation any aircraft used by the defendant for testing, evaluational, demonstrational orexperimental purposes. Use for such purposes is use by or for the Government and is compensable.Obviously every new helicopter must be tested for lifting ability, for the effect of vibration oninstalled equipment, flight speed and range, engine efficiency, and numerous other factors. Tests,demonstrations, and experiments of such nature are intended uses of the infringing aircraftmanufactured for the defendant and are in keeping with the legitimate business of the using agency.Experimental use is not a defense in the present litigation. (50)

This language further suggests that if the use furthers the user's "legitimate business" objectives, evenin a tangential way, then it is not experimental. (51)

A 2002 decision on the experimental use privilege, Madey v. Duke University , (52) reflects this narrow senseof the experimental use privilege. Here, Duke University recruited Dr. John M.J. Madey fromStanford University in order to serve as a research professor and director of a laser laboratory. Adispute ultimately led to Madey's resignation from Duke. After he left the university, Madey broughtsuit for infringement of two patents relating to the operation of specialized equipment used in theDuke laser laboratory. (53)

Responding to Madey's charges of patent infringement, Duke sought to take advantage of theexperimental use privilege. Duke explained that it was a non-profit educational institution dedicatedto teaching, research and the advancement of knowledge. Duke further argued that it does notundertake research or development work principally for the purpose of obtaining patents or designingproducts for the marketplace. The district court agreed that the experimental use privilege appliedand ruled in favor of Duke. (54)

On appeal, the Federal Circuit reversed the district court's experimental use determination. The Court of Appeals characterized the experimental use privilege as "very narrow and strictlylimited." (55) Inparticular, the Federal Circuit observed that the experimental use privilege "does not immunize anyconduct that is in keeping with the alleged infringer's legitimate business, regardless of commercialimplications." (56) Itfurther explained that:

Major research universities, such as Duke, oftensanction and fund research projects with arguably no commercial application whatsoever. However,these projects unmistakably further the institution's legitimate business objectives, includingeducating and enlightening students and faculty participating in these projects. The projects alsoserve, for example, to increase the status of the institution and lure lucrative research grants, studentsand faculty. (57)

As a result, the Federal Circuit held that the district court had resolved the case based upon aninappropriately expansive view of the experimental use privilege. It remanded the litigation backto the district court, with instructions to resolve the issue in light of the Federal Circuit'sdecision. (58)

Many patent law experts agree that following the Madey v. Duke University case, colleges,universities and other academic institutions are unlikely to be able to rely upon the common lawexperimental use privilege as a defense to a charge of patent infringement. (59) Co-authors LawrenceSung, then a member of the University of Maryland Law School faculty, and attorney Claire M.Maisano explained that the "decision in Madey leaves grave doubt that the common law exemptionto patent infringement liability can act as a safe harbor for any academic research effort." (60) Commentator MichelleCai further opined that "practically any project conducted by a research university, even one withoutany commercial implications, would be in keeping with the university's legitimate business interestsand hence would not qualify for the experimental use defense." (61)

Observers generally agree that Madey v. Duke University either retains, or perhaps restrictsto an even greater degree, the quite limited nature of the common law experimental use privilege asit might be applied outside of academic settings. (62) Attorneys Paul Devinksy and Mark G. Davis concluded that theopinion is consistent with previous judicial interpretations of the common law experimental useprivilege. As a result the privilege "lives on as a narrow defense to a claim of infringement." (63) Other observers wouldgo further. Ms. Cai states, for example, that the decision "has essentially destroyed any practicalmeaning to the experimental use defense." (64) Attorneys Cathryn Campbell and R.V. Lupo are in accord,stating that after Madey v. Duke University "the Experimental Use Exception would appear toprovide little, if any protection in today's world." (65)

Experimental Use and Innovation Policy

Although the experimental use privilege has been part of the patent law for many years, the Madey v. Duke University opinion has renewed dialogue over the propriety and scope of thisinfringement exemption. Proponents and detractors of a broad experimental use privilege, as wellas those who do not believe the doctrine is important as a practical matter, have expressed diverseopinions. This report summarizes these competing views.

Some commentators believe that a broad experimental use privilege is inappropriate as amatter of technology policy. Under this view, a liberal experimental allowance would greatly easethe ability of competitors to "design around" the invention or develop competing technologies. Patent owners in turn would be less able to appropriate the returns of their investments in researchand development, this account continues, and would therefore be discouraged from making futureinvestments in research and development. (66) As attorney Jordan Karp concludes: "Rather than spurringincreased innovative activity, a broad experimental use exception would have just the oppositeeffect." (67)

For some observers, a broad experimental use privilege is inappropriate even when researchtakes place within an academic research setting. This is because university research is often notisolated from the private sector, but instead may have significant commercial implications. (68) As stated by two seniorofficers of the USPTO, the Madey v. Duke University decision "recognized a basic economic truthunderlying research performed by large universities -- it is a business, and universities derivesubstantial commercial value from that research." (69)

Indeed, some commentators believe that university research is increasingly likely to havecommercial implications. This shift is believed to be due in part to federal legislation commonlyknown as the Bayh-Dole Act. (70) The Bayh-Dole Act aims to encourage the commercialization ofbasic research by allowing universities and small businesses to procure patents on inventions thatresult from federally funded research. Since the passage of the Bayh-Dole Act, many researchuniversities have developed patent portfolios and garnered significant royalties from intellectualproperty licensing. (71) Because academic institutions are increasingly benefitted from the patent system, some observersreason, they should also be held accountable when they infringe the patents of others. (72)

In contrast, others believe that the common law experimental use privilege is overly narrow. They assert that the current scope of this doctrine too greatly restricts the ability of innovators to"tinker" with the developments of others. (73) Under this view, research may be chilled if scientists cannotexperiment upon state-of-the-art technology free from charges of patent infringement. By limitingthe tools with which researchers can work, these commentators say, the patent system couldultimately depress, rather than promote innovation. (74)

Other observers believe that limiting the experimental use privilege with respect touniversities and nonprofit institutes could impede academic research. Some university-basedscientists believe that, unlike some of their counterparts in the private sector, academic researchershave all but ignored the patent system. (75) In order to avoid patent infringement, universities may have todevote scarce resources to perform costly patent searches and engage in licensing negotiations withpatent holders. To a greater extent than profit-seeking firms, educational institutions may find thatthese obligations weigh heavily on their frequently tight budgets. (76)

Several legal scholars have suggested that the holding of Madey v. Duke University raisesparticular concerns with regard to patented research tools. A "research tool" is an invention, suchas a particular cell line, reagent, or antibody, that is used exclusively or primarily for the purpose ofconducting scientific research. (77) Some observers believe that patents are too frequently grantedon research tools, particularly in biotechnology, and that such patents may impede futureadvancement. For example, two members of the University of Michigan Law School faculty,Michael A. Heller and Rebecca S. Eisenberg, have concluded that researchers might someday needto obtain numerous patent licenses in order to conduct basic research. (78) The costs andcomplications of engaging in numerous patent transactions may potentially create an"anti-commons": an environment where resources that could be committed towards further researchand development are inefficiently under-utilized. (79) Under this view, the narrowly cabined experimental useprivilege contemplated in Madey v. Duke University strengthens patents on research tools and mightmake research and development more difficult to accomplish. (80)

Notably, other scholars contest these theories. For example, F. Scott Kieff, a member of thelaw faculty of Washington University in St. Louis, asserts that this scenario is incorrect as a matterof individual incentives. (81) Rational patent holders should always encourage others toresearch with their technologies, Kieff explains, so as to increase the number of applications for theirinventions and hence their own profits. Wesley M. Cohen, an academic at the Fuqua School ofBusiness at Duke University, has also conducted empirical research suggesting that although the"anti-commons" environment posited by Heller and Eisenberg may be theoretically possible, to dateit has not actually occurred. (82)

Other commentators believe that "scientists recognize the benefits of sharing materials freelywhenever possible and have developed informal norms to achieve broad dissemination of researchtools." (83) For example,the National Institutes of Health ("NIH") has issued "Principles and Guidelines" in order to promotethe broad use of patented research tools in biotechnology. (84) In particular, the NIHencourages patent proprietors to license their proprietary research tools in such a way as to minimizerestrictions upon their use. Although the Principles and Guidelines formally apply only to recipientsof federal funding, the NIH has urged the entire biotechnology community to adopt similar policies"so that all biomedical research and development can be synergistic and accelerated." (85)

Finally, a third set of commentators remain agnostic about the propriety of an experimentaluse privilege, but believe that this issue is not of great importance for practical reasons. Patentinfringement litigation is widely regarded as costly, time-consuming and complex. (86) There may be insufficienteconomic justification to commence litigation against individuals who are not making commerciallyimportant uses of patented inventions. As a result, patent infringement suits may only rarely bebrought against hobbyists, philosophers and noncommercial defendants, regardless of how narrowlyor broadly the experimental use privilege is defined. (87)

It is also important to remember that the patent law may, in certain circumstances, provideresearchers with the ability to use products even though they have been patented by others. One ofthese principles is known as the "exhaustion" doctrine. Under this legal rule, once a patent ownerhas sold a patented product, he cannot control the use of that particular product. Any patent rightsin that specific physical item are said to have been "exhausted" by this initial sale. Sometimes theexhaustion principle is termed the "first sale" doctrine. (88)

For example, suppose that a pharmaceutical firm wished to analyze a drug that had beenpatented by another. That firm might wish to confirm the drug's biological activity , identify newmedical indications, or compare its pharmacological profile to those of other compounds. If the firmis able simply to purchase the patented drug on the open market, then no issues of patentinfringement will ordinarily arise. Any patent on the drug is exhausted once the drug has been sold,allowing the purchasing firm to use the patented drug as it wishes. The scope of the experimentaluse privilege is irrelevant in this scenario. (89)

On the other hand, suppose that a patented drug is not available for purchase within themarket. In order to experiment with that compound, a pharmaceutical firm must synthesize it withinits own laboratories. This step would be an act of patent infringement, however, because the rightto make a patented invention is exclusive to the patent owner. (90) In this case theexperimental use privilege would, at least theoretically, come into play as a possible defense topatent infringement.

Statutory Experimental Use Privileges

The existence, possible scope and importance of the common law experimental use privilegein patent law remains the subject of considerable debate. However, it should be noted that the PatentAct of 1952 includes a limited statutory experimental use privilege for patents on pharmaceuticals,medical devices, and certain other products regulated by the Food and Drug Administration (FDA). This provision, enacted as part of 1984 legislation known as the Hatch-Waxman Act, (91) applies to firms seekingto market generic equivalents of brand-name products. In addition, Congress has enacted otherintellectual property legislation that incorporates provisions shielding researchers from infringementliability. This report considers these topics in turn.

The Hatch-Waxman Act

The Hatch-Waxman Act for the first time introduced a statutory experimental use privilegeinto the patent laws. This privilege applies only to certain products -- notably specific kinds ofpharmaceuticals and medical devices -- that are regulated by the FDA. Firms must obtain FDAapproval in order to market these products. Ordinarily the FDA will approve only of those productsthat have been proven to be safe and effective through laboratory, animal and clinicalinvestigations. (92) Suchstudies can be costly and time-consuming. In some cases, the effort to obtain FDA marketingapproval requires many years to complete. (93)

Many firms wish to sell drugs or medical devices that are "generic" -- that is to say,equivalent to a product that was first developed and sold under a brand name by a different company. Prior to Hatch-Waxman Act, generic firms faced two notable difficulties in getting their productsto market. First, generic firms ordinarily had to conduct the same sort of expensive and lengthyclinical investigations as their brand-name counterparts in order to obtain FDA marketing approval. This requirement existed even in circumstances where the generic drug was chemically identical toa brand-name drug of widely acknowledged safety and effectiveness. (94)

Second, generic firms had to account for the patents owned by their brand-name competitors. As of the early 1980's, legal uncertainty existed as to whether a generic firm could conduct clinicaltrials at all if a brand-name firm held patents on the drug or medical device. As part of the FDAmarketing approval process, the generic firm would need to both make and use the patented drug ordevice -- activities that under the intellectual property laws are exclusive to the patentproprietor. (95) The resultwas that a generic firm could be sued for patent infringement and, at least until the relevant patentsexpired, enjoined from engaging in the activities it needed to perform in order to satisfy FDAmarketing approval requirements.

Some generic drug and medical device firms sought to rely upon the common lawexperimental use privilege in this situation. Their position was that activities performed in order tofulfill FDA marketing approval standards were merely experimental in nature, and as a result shouldbe exempted from patent infringement. (96) Whether the courts would uphold this argument remained anopen legal question for many years.

Eventually this issue came before the Federal Circuit, which in 1984 issued its decision in Roche Products, Inc. v. Bolar Pharmaceutical Co. (97) Here the Federal Circuit conclusively held that the common lawexperimental use privilege did not shield generic firms engaged in FDA marketing approvalactivities from charges of patent infringement. In this case, Roche Products, Inc. ("Roche") marketeda prescription sleeping pill under the trademark "Dalmane." Roche also was the proprietor of apatent claiming a chemical compound, flurazepam hcl, that was the active ingredient in Dalmane. Bolar Pharmaceutical Co. ("Bolar"), a manufacturer of generic drugs, grew interested in marketinga generic equivalent of Dalmane. Prior to the expiration of Roche's patent, Bolar obtained a supplyof flurazepam hcl from a foreign manufacturer. It began to form the flurazepam hcl into dosage formcapsules to obtain stability data, dissolution rates, bioequivalency studies and blood serum studiesnecessary to obtain marketing approval from the FDA. (98)

The Federal Circuit concluded Bolar's activities infringed the Roche patents, and that theexperimental use defense did not apply. The Court of Appeals reasoned:

Bolar's intended "experimental" use is solely forbusiness reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.Bolar's intended use of flurazepam hcl to derive FDA required test data is thus an infringement ofthe [Roche] patent. Bolar may intend to perform "experiments," but unlicensed experimentsconducted with a view to the adaptation of the patented invention to the experimentor's business isa violation of the rights of the patentee to exclude others from using his patented invention. It isobvious here that it is a misnomer to call the intended use de minimus. It is no trifle in its economiceffect on the parties even if the quantity used is small. It is not a dilettante affair such as Justice Storyenvisioned. We cannot construe the experimental use rule so broadly as to allow a violation of thepatent laws in the guise of "scientific inquiry," when that inquiry has definite, cognizable, and notinsubstantial commercial purposes. (99)

Congress responded to Roche v. Bolar by enacting the statute commonly known as the Hatch-- Waxman Act. The statute introduced a number of changes to both the patent law and the food anddrug law. (100) Amongthem was an accelerated marketing approval process for generic products. (101) In addition, theHatch-Waxman Act created a statutory exemption from patent infringement for activities associatedwith regulatory marketing approval. As originally enacted and codified in 35 U.S.C. Â§ 271(e)(1),the Hatch-Waxman Act exempted from patent infringement "uses reasonably related to thedevelopment and submission of information under a Federal law which regulates the manufacture,use, or sale of drugs." Through the Generic Animal Drug and Patent Term Restoration Act, whichbecame effective on November 16, 1988, Congress extended this provision to cover regulatedveterinary drugs and biological products as well. (102)

A number of significant judicial opinions have interpreted the Hatch-Waxman Act'sexperimental use privilege. The U.S. Supreme Court opinion in Eli Lilly and Co. v. Medtronic clarified the sorts of products that are covered by this statute. (103) In that case, Eli Lilly,which owned a patent claiming a cardiac defibrillator, filed an infringement action against Medtronicfor its use of a similar device. Medtronic in turn pointed to 35 U.S.C. Â§ 271(e)(1), arguing thatMedtronic's use of the defibrillator was reasonably related to obtaining data for FDA approval. EliLilly in turn argued that the wording of 35 U.S.C. Â§ 271(e)(1) -- as it was at the time -- onlyexpressly referred to "drugs," not "medical devices." (104)

The Supreme Court sided with Medtronic, concluding that all of the products eligible forpatent term extension under the Hatch-Waxman Act fall within the scope of the 35 U.S.C. Â§271(e)(1) experimental use privilege. Justice Scalia concluded that the statutory phrase "a Federallaw which regulates the manufacture, use, or sale of drugs" meant the entirety of the Food, Drug andCosmetic Act, which regulates drugs but also covers medical devices and other products. As a resultof the Eli Lilly and Co. v. Medtronic holding, 35 U.S.C. Â§ 271(e)(1) extends to a range of subjectmatter, including pharmaceuticals, medical devices, food additives, color additives, and biologicalproducts. A generic firm may therefore use these products during the term of another's patentwithout fear of infringement liability, as long as the use is reasonably related to obtaining data forFDA approval. (105)

Other noteworthy judicial opinions have considered the nature of the activities that areexempted by the Hatch-Waxman Act privilege. The leading decision in Intermedics, Inc. v.Ventritex, Inc. interpreted the statutory exemption generously. (106) According to the Intermedics decision, "[w]here it would have been reasonable, objectively, for an accused infringerto believe that there was a decent prospect that the use in question would contribute (relativelydirectly) to the generation of information that was likely to be relevant in the processes by which theFDA would decide to approve the product," (107) then the court should apply the 35 U.S.C. Â§ 271(e)(1)infringement exemption. Following Intermedics , a number of other decisions have found that theaccused infringer's activities fall within the statutory experimental use exemption. (108)

The Hatch-Waxman experimental use privilege is not without limit, however. A 2003Federal Circuit decision, Integra Lifesciences, I, Ltd. v. Merck , (109) held that the 35 U.S.C.Â§ 271(e)(1) experimental use exemption did not apply under the facts before the court. Here, Integrasued Merck for infringement of several patents relating to compounds thought to eliminate tumorgrowth and for treating a variety of other diseases. In turn, Merck asserted 35 U.S.C. Â§ 271(e)(1) asa defense. The district court held that the Scripps-Merck activity did not fall under the 35 U.S.C. Â§271(e)(1) exemption. (110)

The Federal Circuit affirmed the district court on appeal. The Federal Circuit observed thatMerck's experiments did not supply information for submission to the FDA. Rather, Merckconducted these experiments in order to determine which of several compounds was the best drugcandidate to subject to future testing. (111) The court then reasoned that such activities were notconducted "solely for purposes reasonably related to the development and submission of informationunder federal law," as the statutory exemption required. Rather, they were early-stage, exploratoryexperiments performed merely to identify promising pharmaceutical compounds. (112) The IntegraLifesciences decision makes clear that the 35 U.S.C. Â§ 271(e)(1) exemption does not apply to allexploratory research, but is instead a "narrowly tailored" exemption intended to have a " de minimis impact on the patentee's right to exclude." (113)

Other Statutes

Although the Hatch-Waxman Act awards limited experimental use privileges with respectto patents on certain drugs, medical devices, and other products regulated by the FDA, the Patent Actof 1952 does not provide for a more broadly oriented experimental use privilege. However,Congress has enacted a number of specialized intellectual property statutes that expressly incorporatea more comprehensive experimental use doctrine. For example, the Plant Variety Protection Actallows the Department of Agriculture to issue plant variety certificates on sexually reproducibleplants. (114) Thesecertificates provide their owner with the exclusive right to "exclude others from selling the variety,or offering it for sale, or reproducing it, importing, or exporting it, or using it in producing (asdistinguished from developing) a hybrid or different variety therefrom." (115) The statute doesinclude a research exemption, however, stipulating that "[t]he use and reproduction of a protectedvariety for plant breeding or other bona fide research shall not constitute an infringement of theprotection provided under this chapter." (116)

Another specialized intellectual property statute, the Semiconductor Chip Protection Act of1984, (117) allowsindividuals to claim exclusive rights in "mask works" -- circuitry designs used on a computer orother semiconductor chip. (118) It is an act of infringement either to reproduce these maskworks, or to sell or import a semiconductor chip embodying a protected mask work. (119) However, thislegislation expressly exempts those individuals who "reproduce the mask work solely for the purposeof teaching, analyzing, or evaluating the concepts or techniques embodied in the mask work or thecircuitry, logic flow, or organization of components used in the mask work." (120)

A third example is provided by the Vessel Hull Design Protection Act. (121) This legislation, whichallows designers of an original boat hull to register their designs with the federal government,incorporates an experimental use privilege similar to that of the Semiconductor Chip Protection Act. Under the Vessel Hull Design Protection Act, individuals who make, use, sell or import the protecteddesign without the authorization of the registered design owner may be subject to infringementliability. (122) Yet thestatute expressly exempts from infringement those uses "solely for the purpose of teaching,analyzing, or evaluating the appearance, concepts, or techniques embodied in the design, or thefunction of the useful article embodying the design." (123)

Legislative Issues and Alternatives

Should congressional interest continue in this area, a variety of options are available. If thecurrent scope of the common law experimental use privilege is deemed to be appropriate, then noaction need be taken. Alternatively, Congress could enact legislation confirming the narrowlycabined view of the experimental use privilege as set forth in Madey v. Duke University andpredecessor cases.

If reform of the experimental use privilege is deemed prudent, however, another possibilityis the introduction of some additional form of the experimental use privilege into the Patent Act of1952. This infringement exemption could supplement or replace the narrow experimental useprivilege introduced by the Hatch-Waxman Act. One option is to incorporate a generally applicableprivilege of the sort contemplated by the proposed, but unenacted Patent Competitiveness andTechnological Innovation Act of 1990. H.R. 5598 was introduced before the 101st Congress onSeptember 12, 1990. Section 402 of that bill provided:

It shall not be an act of infringement to make or use apatented invention solely for research or experimentation purposes unless the patented invention hasa primary purpose of research or experimentation. If the patented invention has a primary purposeof research or experimentation, it shall not be an act of infringement to manufacture or use suchinvention to study, evaluate, or characterize such invention or to create a product outside the scopeof the patent covering such invention.

H.R. 5598 was reported by the House Judiciary Committee on October 26, 1990. Other intellectualproperty statutes, including the Plant Variety Protection Act, Semiconductor Chip Protection Act,and the Vessel Hull Design Protection Act, also provide examples of the manner in which agenerally applicable statutory experimental use privilege could be drafted.

A more limited statutory experimental use privilege presents another law reform option. Such a privilege might be limited to patented inventions that arise in particular technological fields,in the fashion of the proposed, but unenacted Genomic Research and Diagnostic Accessibility Actof 2002. H.R. 3967 would have exempted from patent infringement the use of genetic sequenceinformation for purposes of research. In addition, this bill would have limited the remedies that theowner of a patent on genetic diagnostic testing could obtain during infringement litigation. Following its introduction in the 107th Congress on March 14, 2002, H.R. 3967 was referred to theSubcommittee on Courts, the Internet and Intellectual Property on May 6, 2002, but no further actionwas taken.

Another possibility would be to limit the experimental use privilege to patented researchtools, in whatever technological field they might arise. Yet another option is to grant anexperimental use privilege in favor of universities or non-profit research institutions, but retain thecurrent law of experimental use with respect to for-profit enterprises.

Consideration of any sort of statutory reform with respect to experimental use privilegeshould take into account the Agreement on Trade-Related Aspects of Intellectual PropertyRights. (124) TheUnited States is a signatory to the so-called "TRIPS Agreement," which is a component of theinternational agreements that form the World Trade Organization (WTO). The TRIPS Agreementin part requires its signatories to grant patent owners the right to exclude others from making, using,offering for sale, selling, or importing a patented invention. (125) Further, under Article27 of the TRIPS Agreement, such rights must be "enjoyable without discrimination as to the placeof invention, the field of technology and whether products are imported or locally produced."

The TRIPS Agreement does allow member states to limit patent rights under certaincircumstances, however. As stated in Article 30 of the TRIPS Agreement:

Members may provide limited exceptions to theexclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflictwith a normal exploitation of the patent and do not unreasonably prejudice the legitimate interestsof the patent owner, taking account of the legitimate interests of thirdparties.

Article 30 presumably allows its signatories to provide for a generally applicable experimental useprivilege. Many WTO members, including Germany, (126) Japan (127) and the United Kingdom, (128) already incorporatesuch a privilege into their patent statutes. However, a more limited form of the experimental useprivilege may raise concerns under the non-discrimination provision of Article 27. To the extent thatthe experimental use privilege is available for some sorts of inventions and not others, it may conflictwith the Article 27 obligation not to discriminate as to the "field of technology" in which a patentableinvention arises. (129)

Finally, the experimental use privilege need not be an all-or-nothing proposition. Anotheroption is to grant researchers the ability to experiment with the patented inventions of others --provided they compensate the patent holder at a specified royalty rate. This regime would effectivelyamount to a "compulsory license" available to researchers. (130) Janice Mueller, amember of the faculty of the University of Pittsburgh Law School, posits that this approach wouldensure "a royalty award of sufficient amount to maintain incentives for the development andpatenting of new research tools, yet [alleviate] the access restrictions and up-front costs currentlyassociated with acquisition and use of many proprietary research tools." (131)

In weighing this approach to the experimental use issue, it is also important to note that theTRIPS Agreement places some restrictions upon the ability of WTO members to grant compulsorylicenses. Article 31, which is among the more detailed provisions in the TRIPS Agreement, in partrequires that each application for a compulsory license be considered on its individual merits; thatthe proposed user must have made efforts to obtain a license from the patent owner; and that thelegal validity of such a license be subject to review by the courts or other independent authority. (132) Deliberations over a"compulsory license" approach to the experimental use privilege may wish to account for theseobligations.

Concluding Observations

Whether the patent law's experimental use privilege should be retained as a narrowlyconfined doctrine of limited availability, or expanded to encompass additional experimentalactivities, technologies, and researchers, continues to be the subject of active discussion in thescientific and legal communities. A limited experimental use privilege may best encouragetechnological advancement by rewarding successful researchers with patent rights that are not easilycircumvented. However, some commentators believe that the circumscribed nature of theexperimental use privilege may in fact restrict researcher access to state-of-the-art technologies andthus discourage further technological development. Although the courts have relied upon existinglaw in order to reach their decisions in particular cases, whether a narrow experimental use privilegemost appropriately serves the contemporary scientific research community remains open to policydebate.