X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Should universities be allowed to conduct research on patented inventions? The U.S. Court of Appeals for the Federal Circuit’s recent decision in Madey v. Duke University, 307 F.3d 1351 (Fed. Cir. 2002), is certain to set off a lively debate about the matter. The ruling calls into question the very right of a school to function as a research institution, free from third-party patent problems. John Madey owned two patents relating to free-electron lasers. Duke University employed him to run a lab using equipment developed under the patents. After a dispute, Duke removed Madey as director of the lab, but continued to use his patented equipment. Madey sued Duke for infringement. The lower court dismissed his claim based on the experimental-use doctrine. On appeal, the Federal Circuit reversed and remanded, ruling that a university enjoys no special privilege or experimental-use exemption to conduct testing or research. With Madeyin hand patent owners are now armed with a decision that is sure to embolden their enforcement efforts and licensing programs. The decision almost guarantees that the 108th Congress will reconsider earlier attempts to provide a statutory research exemption. Before Madeyand earlier dictum from the Federal Circuit in Roche Products v. Bolar Pharmaceutical Co., 733 F.2d 858, 862-63 (Fed. Cir. 1984), it had been accepted precedent that an experimental-use exemption exists for purely scientific research to study and understand a patented invention. This had been unquestioned under the case law line that came from no less an authority than perhaps the leading scholar on the early Supreme Court, Joseph Story. In his landmark opinion in 1813 in Whittemore v. Cutter, 29 F. Cas. 1120, 1121 (C.C.D. Mass. 1813), Story used the now anachronistic term “philosophical” (instead of “scientific”) to describe the experimental-use exemption from patent infringement. This exemption resides at the very core of the constitutional mandate for Congress to create a patent system “to promote the Progress of … useful Arts.” Those skilled in such “useful Arts” are free to use the knowledge imparted by a patent disclosure to create better technologies. Schools maintain that the unique nature of university research requires a research exemption. Yet Madeyholds that “the profit or nonprofit status of the [experimental] user is not determinative” of whether there is an exemption from infringement. Complicating matters for universities is the question of whether corporate-sponsored research at a state institution is free from infringement liability. In other words, may a corporate research sponsor piggyback off the sovereign immunity of the direct infringer — the university or other public institution — that conducts its research? While still subject to review by the Federal Circuit, at least one court has said no. The corporate sponsor may be nabbed for infringement liability under a theory of active inducement. Syrrx Inc. v. Oculus Pharms. Inc., 64 U.S.P.Q.2d 1222 (D. Del. 2002). A further setback for U.S. universities — profit or nonprofit — is that American corporate research efforts are now being shunted overseas, where infringement is not an issue. Europe and Asia both have a liberal research exemption. Without a harmonized patent regime including a common definition of a research exemption, the exportation of research to foreign institutions will accelerate, to the great expense of the educational infrastructure of the United States. Recently, a trial court denied the existence of a university research exemption in Infigen Inc. v. Advanced Cell Technology Inc., 65 F. Supp. 2d 967, 981 (W.D. Wis. 1999). There, an experimental-use exemption was denied on the basis that “it is up to Congress to decide whether there should be an infringement exemption for university-based research laboratories. So far, Congress has not seen fit to grant one.” A principal object of high-technology research at the major universities is to pinch, touch, poke and feel the latest innovations. University researchers want to understand and tinker with the very latest (and often patent-protected) technology to develop yet further new developments. As a matter of course, the pure researcher will use technology described in the latest literature. There is no better way to see just how good new developments may be. Universities don’t have corporate-style patent departments to help guide research. Universities don’t generally identify potential research that should be emulated, and they don’t generally evaluate patents in an area of technology and advise researchers whether there may be infringement problem. It has been axiomatic since the early days of the country — since the time of Joseph Story — that any scientific-philosophical research is immunized from patent infringement. There are at least two distinct differences between the Ph.D. in a commercial laboratory and that of his academic cousin. First, unlike their university counterparts, who are prone to publish their scientific results immediately and to disclose them to their peers at academic conferences, commercial researchers are secretive at the early stages of their work. It is much easier for owners of research tool patents to enforce their intellectual property against a university, whose scientific research is widely known, than against a commercial laboratory. After the fact — when commercial research is published — a patent owner does not have much incentive to go after a commercial researcher because the research has been completed. Second, major biotechnology corporate research organizations have internal patent departments with patent attorneys holding both law degrees and often Ph.D.s. They are equipped to help researchers through the patent maze. The common view among the university community is that a research exemption exists for nonprofit organizations, but not for businesses. “Business entities should not be allowed to argue that their use or manufacture is experimental, and, therefore, an excused infringement,” writes Michelle Walters in her article “De Minimus Use and Experimental Use Exceptions to Patent Infringement: A Comment on the Embrex Concurrence,” which appeared in the Quarterly Journal AIPLA. “If the purpose of the experiments is solely for business reasons or to develop a noninfringing device that can compete with the patented device, the infringement is not excused,” Walters notes. Courts don’t necessarily agree with this argument. Responding to Duke’s plea for special treatment as a nonprofit research organization, the Madeycourt denied any difference in treatment from a regular commercial enterprise: “Our precedent does not immunize any conduct that is in keeping with the alleged infringer’s legitimate business, regardless of commercial implications. For example, major research universities, such as Duke, often sanction and fund research projects with arguably no commercial application whatsoever. However, these projects unmistakably further the institution’s legitimate business objectives, including educating and enlightening students and faculty participating in these projects. These projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students, and faculty. The Madeyopinion said: “So long as the [accused infringing] act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense.” If the United States is to maintain its high level of biotechnology and nanotechnology research, it is essential that the country rethink its posture on research exemptions. If Madeyhelps start a conversation about when research should be free of infringement fears, the case may ultimately have a positive long-term effect, however bothersome the ruling in the short term. Stephen B. Maebius and Harold C. Wegner are partners in the intellectual property department in the Washington, D.C., office of Milwaukee’s Foley & Lardner ( www.foleylardner.com). If you are interested in submitting an article to law.com, please click herefor our submission guidelines.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.