[co-author: Nile Delso ]*
Congress’s protection from patent infringement for drug developers created under the Hatch-Waxman Act of 1984 (Act) has been extensively litigated over the past three+ decades, but the scope of the so-called “safe harbor exemption,” provided in 35 U.S.C. § 271(e)(1), is still unclear and may be narrower than once thought.
In 1984, the Federal Circuit held, in Roche v. Bolar, that a generic manufacturer’s intended experimental use of a patented drug was patent infringement and rejected a broad interpretation of the traditional experimental use exception.[1] Accordingly, this decision delayed drug introduction and allowed a patentee to maintain market exclusivity long after the blocking patent(s) expired. In response to this unfair outcome, Congress enacted the Hatch-Waxman Act[2] to encourage new pharmaceutical development and increase public access to drugs.
The Act provides for two relevant sections: Section 201 of Title II added Section 156 (Extension of Patent Term), which extends the typical patent term if federal law requires a patented product to undergo regulatory review before its commercial marketing and Section 202, which amended 35 U.S.C. § 271 (Infringement of Patent) by adding Section 271(e)(1). This second addition is referred to as the safe harbor provision, which reads:
It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product …) 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.[3]
Courts have broadly construed this statute, which has been interpreted to apply to pre-clinical or clinical research[4] and can apply even if the company does not submit its experimental results to the FDA.[5] Additionally, even though the safe harbor exemption only states coverage for “drugs or veterinary biological products,” the provision has been construed to apply to even more categories of federally regulated products.[6]
The threshold of safe harbor application turns on whether the experimental activity is reasonably related to the development and submission of information to the FDA or any other federal regulatory agency. In Merck v. Integra, the Supreme Court focused on the statutory term “reasonably related” in adopting its broad construction of Section 271(e)(1). According to the Court:
Where a drugmaker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA, that use is “reasonably related” to the “development and submission of information under … Federal law.”[7]
This has been interpreted to mean that scientists must go beyond “basic scientific research” before Section 271(e)(1) applies.
Conflicting judicial approaches to interpreting Section 271(e)(1) have added ambiguity to the application of the safe harbor exemption. As a result, infringement liability risks remain for those who intend to use a patented invention without authorization. Specifically, whether safe harbor exempts the unauthorized use of patented devices, methods, or compositions subject to FDA approval (sometimes referred to as “research tools” or “manufacturing test methods)[8] has holdings at the Federal Circuit that litigants argue are inconsistent, followed by several recent district court cases that seem to side with a narrow application of the exemption.
In narrowing the exemption, the Supreme Court makes the connection between the two sections of the Act (Section 156 and Section 271(e)(1)) and that they were to work in parallel. By linking these sections, it could rely on the reference in Section 156(f) to “any medical device.”[9] This interpretation brought the medical device at issue within the scope of the safe harbor exemption.[10] Although the Court recognized the possibility of situations where patents not extendable under Section 156 would be subject to Section 271(e)(1),[11] these situations did not undermine the broader conclusion that the “patented inventions” subject to the Section 271(e)(1) noninfringement provision are the ones eligible for the benefit of the Section 156 patent term extension.[12]
However, by suggesting a symmetry between Section 271(e)(1) and Section 156, the Court left unresolved the meaning of the statutory term “patented invention.” Specifically, was the term intended to include any patented invention employed, while developing information related to one of the product types listed in Section 156? Alternatively, was the term restricted to only those patented inventions themselves eligible for a patent term extension under Section 156?
The Federal Circuit has decided multiple cases over the years related to this issue. In Abtox Inc. v. Exitron Corp,[13] the court broadened the scope of Section 271(e)(1) to include Class II medical devices, which do not require federal regulatory approval and are not eligible for a patent term extension under Section 156. In Proveris Scientific Corp. v. Innovasystems, Inc.,[14] the Federal Circuit adopted the most restrictive version of statutory symmetry and concluded that the term “patented invention” in Section 271(e)(1) is limited to only those products listed in Section 156(f) that are eligible for a patent term extension. In holding for Proveris, the court explained:
[I]n Eli Lilly the Court spoke of its interpreting the phrase “patented invention” in section 271(e)(1) to include all products listed in section 156(f) as producing a ‘perfect ‘product’ fit’ between the two provisions. The result we reach today achieves the same kind of fit, or symmetry. Because Proveris’s patented product is not subject to a required FDCA approval process, it is not eligible for the benefit of the patent term extension afforded by 35 U.S.C. § 156(f). At the same time, because Innova’s OSA device also is not subject to a required FDCA approval process, it does not need the safe harbor protection afforded by 35 U.S.C. § 271(e)(1)[.][15]
To add to these Federal Circuit decisions, several recent holdings at the district level side with a narrow reading of the safe harbor exemption in line with Proveris.
Regenxbio v. Sarepta,[16] out of the District of Delaware, is illustrative. Plaintiffs Regenxbio and the University of Pennsylvania hold patents, claiming a “cultured host cell containing a recombinant nucleic acid molecule” that can encode an AAV capsid protein. These host cells do not specifically require FDA approval, however, gene therapy products made from such host cells are subject to a regulatory approval process. The district court cited Proveris in the denial of Sarepta’s motion to dismiss based on the safe harbor, explaining:
Proveris holds that a patented product that is not subject to FDA premarket approval is not a ‘patented invention under § 271(e)(1) … . Sarepta is not using the patented cultured host cells to obtain FDA approval to introduce generic cultured host cells to compete in the marketplace when the’ 617 patent expires. Instead, Sarepta is using the patented cells to develop its own patentable product. Sarepta can begin using the patented host cells immediately upon expiration of the patent because the cells are not subject to any FDA regulatory approval process.[17]
This is consistent with several other recent district court decisions.[18] In 2021, the District Court for the Southern District of California reached a similar conclusion in Allele v. Pfizer.[19] Defendants Pfizer and BioNTech allegedly used Allele’s patented mNeon Green product, a “fluorescent protein used as a biological tag in genetic engineering,” to research and develop their SARS-CoV-2 vaccine. After Allele sued for patent infringement, Pfizer and BioNTech argued that they conducted their allegedly infringing activities to submit data on their vaccine to the FDA and thus were protected by the safe harbor exemption. Relying on Proveris, the court disagreed, holding that because Allele’s patented proteins were not subject to FDA approval and did not constitute a “patented invention,” under the statute, the safe harbor exemption did not apply.[20]
A review of the relevant case law at the Federal Circuit level raises questions as to the scope of the term “patented invention” in Section 271(e)(1). Restricted interpretations of the term find support in a narrow interpretation of the Eli Lilly Court’s holding, as relied on by the Federal Circuit in Proveris. A recent emerging consensus at the district level indicates support for the interpretation that a patented invention subject to safe harbor exploitation must also be eligible for the benefit of patent term extension afforded by 35 U.S.C. § 156(f), at least where the patents can otherwise be characterized as “research” patents. Unless the Federal Circuit or the Supreme Court steps in with a different reading, parties relying on safe harbor defense should be aware of potential risks associated with a potential unauthorized use of patented technology that is not itself subject to federally regulated approval.
[1] Subsequent interpretation of the experimental use, or research, exemption has clarified its scope as ”[v]ery narrow and limited to actions performed for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” See, e.g., Madey v. Duke University, 307 F.3d 1351 (Fed. Cir. 2002). The exemption “does not immunize use [of a patent invention] that is in any way commercial in nature” nor “any conduct that is in keeping with the alleged infringer’s legitimate business,” even if that business is research or education with no commercial intent. Id. at 1362.
[2] Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 [hereinafter Hatch-Waxman Act]. Title II of the Act amended Title 35 of the U.S.C. (the patent law).
[3] Id. at 1603; 35 U.S.C. § 271(e)(1).
[4] See Merck KGaA v. Integra Life Sciences, 545 U.S. 193 (2005) (”[T]he statutory text [of § 271(e)(1)] makes clear that it provides a wide berth for the use of patented drugs in activities related to [FDA] approval.). (”[The exemption] necessarily includes preclinical studies of patented compounds that are appropriate for submission to the FDA in the regulatory process). Id. at 202. See also Chartex Int’l Plc v. M.D. Pers. Prods. Corp., 1993 U.S. App. LEXIS 20560, at *8-9 (Fed. Cir. Aug. 12, 1993).
[5] See, e.g., Merck, 545 U.S. at 204-08.
[6] See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990) (“The phrase ‘patented invention’ in § 271(e)(1) is defined to include all inventions, not drug-related inventions alone.). The scope of Section 271(e)(1) is discussed in greater detail in Section III, below.
[7] Merck, 545 U.S. at 207. Emphasis added.
[8] The National Institutes of Health defines “research tools” as “tools that scientists use in the laboratory including cell lines, monoclonal antibodies, reagents, animal models, growth factors, combinatorial chemistry and DNA libraries, clones and cloning tools (such as PCR), methods, laboratory equipment and machines.” 64 Fed. Reg. 72,090, 72,092 n.1 (Dec. 23, 1999).
[9] 35 U.S.C. § 156(f) (“The term ‘product’ means: (A) A drug product [, which means the active ingredient of a new drug, antibiotic drug, or human biological product]. (B) Any medical device, food additive, or color additive subject to regulation under the Federal Food, Drug, and Cosmetic Act.).
[10] Eli Lilly, 496 U.S. at 669-71.
[11] ”[T]here may be some relatively rare situations in which a patentee will obtain the advantage of a [Section 156] extension but not suffer the disadvantage of the [Section 271(e)(1)] noninfringement provision, and other in which he will suffer the disadvantage without the benefit.” Id. at 671-72.
[12] Id. at 672, 674-75.
[13] 122 F.3d 1019, 1027 (Fed. Cir. 1997).
[14] 536 F.3d 1256, 1263 (Fed. Cir. 2008).
[15] Id.
[16] Regenxbio, 2022 U.S. Dist. LEXIS 1945.
[17] Regenxbio, at *8-9.
[18] See, e.g., Allele Biotechnology & Pharms., Inc. v. Pfizer, Inc., 20-cv-01958-H-AGS, 2021 U.S. Dist. LEXIS 85347 (S.D. Cal. May 4, 2021); PSN Illinois, LLC v. Abbot Labs, 09-cv-5879, 2011 U.S. Dist. LEXIS 108055 (N.D. Ill. Sept. 20, 2011) (holding that research tools used in connection with S1P2 receptors not subject to FDA approval were not “patented inventions” protected by the safe harbor); ISIS Pharm., Inc. v. Santaris Pharma A/S Corp., 3:11-cv-2214-GPCKSC, 2014 U.S. Dist. LEXIS 26148 (S.D. Cal. Feb. 27, 2014) (”‘[R]esearch tools’ do not qualify for protection under § 271(e)(1).).
[19] Allele, 2021 U.S. Dist. LEXIS 85347.
[20] Id. at *18.
*Nile is a 2022 summer associate with Troutman Pepper and not admitted to practice law in any jurisdiction.
