Academic and noncommercial basic research has always been an engine for innovation, particularly in the areas of medicine and drugs. The extent to which patents may touch noncommercial research is critically important, whether to spur innovation by offering a reward, or to limit the use of patented technology for basic research under the threat of infringement suits. At the same time, distinctions between noncommercial basic research and commercial development are not so clear. Perhaps surprisingly, applied commercial drug and medical device research has more protection from patent infringement litigation than noncommercial research does. The U.S. Supreme Court is set to touch on the question of the patentability of research-based advancements with its upcoming review of the Myriad decision. For now, patent owners and researchers should look to previous lower court decision and emerging technology transfer best practices for guidance.

What’s protected: different research, different standards

Different kinds of pharmaceutical and medical device research receive differing kinds of protection from patent infringement litigation. Applied research that is ultimately aimed at FDA approval enjoys a relatively broad statutory safe harbor. Basic research does not.

35 U.S.C. § 271(e) shields activity that is preparatory to approval of medical devices or pharmaceuticals. Section 271(e)(1) states that “[i]t shall not be an act of infringement to make [or] use … a patented invention solely for uses reasonably related to the development and submission under a Federal law which regulates the manufacture, use, or sale of drugs.” This section exempts from patent infringement, for example, the design, testing, and clinical use of new drugs or devices in development, including for generic devices and drugs that will rely on a body of information from predecessor drugs or devices to speed development and approval. In short, § 271(e)(1) often permits a competitor to use someone else’s proprietary, patented technology in its efforts to develop a competitive medical device or drug.

In Momenta Pharma. v. Amphastar Pharma., the Federal Circuit interpreted § 271(e)(1) broadly and expanded the exemption to shield the use of a patented method for post-approval testing of commercial lots of a product, because the ongoing testing was required by FDA as part of the approval. A majority of the court concluded that exemption applies to post-approval uses of patented inventions as well as pre-market testing conducted in order to obtain FDA approval. (Momenta contains a stinging dissent that argues that majority went too far by extending the statute’s protection to post-FDA-approval activity.)

Basic, noncommercial researchers do not have the same level of protection from infringement litigation. Basic researchers used to have a robust “experimental use defense” to counter claims of patent infringement. But the Federal Circuit essentially eliminated the defense with its 2002 decision in Madey v. Duke. Madey held there is no safe harbor for basic research performed by any entity or institution, unless the research is done “solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.”

Recent decisions do not help to clarify the scope of what exemption for basic research actually exists. In Myriad, for example, the majority in the Federal Circuit quickly dismissed the dissent’s public policy concern regarding the decision’s potential adverse effects on basic research. The majority stated “patents are rarely enforced against scientific research, even during their terms.” This comment seems to recognize that patents could be enforced against basic research, but — in the hopes of the majority–patent owners choose not to pursue scientific researchers.

Managing the transfer of license enforcement control

The public institutions where much of the basic research in question takes place have also weighed into the mix. These institutions have begun to seek control of the terms of patent licenses that could be used against their basic research. For example, the Association of University Technology Managers (AUTM) — comprised of technology transfer offices for some of the largest public research institutions in the U.S. — has explicitly identified the potential danger to basic research when an academic institution out-licenses patents to commercial enterprises. Specifically, AUTM now advocates for licensing agreements that, inter alia:

  • Reserve the right of universities and other non-profit and governmental organizations to practice licensed inventions;
  • Structure exclusive licenses in a manner that encourages technology development and use; and
  • Ensure broad access to research tools.

By including the right specific language in patent licenses, technology offices and other organizations have the ability to preclude enforcement of patents against basic researchers.

Where to go from here

Until now, the combination of the statutory safe harbor for drug development with popular sentiment in favor of basic, noncommercial research has provided some protection to basic researchers from charges of patent infringement. But as research funding increasingly comes from private sources, and as patents on the materials and methods used in basic research become subject to private control, the relationship of patents to basic research may be changing. For example, in Alzheimer’s Inst. of Am. v. Avid Radiopharmaceuticals and Alzheimer’s Inst. of Am. v. Elan Pharmas, the Alzheimer’s Institute of America (the AIA) sued numerous non-profit research institutions for development and use of mouse lines incorporating a gene that may be associated with Alzheimer’s disease.

A few actions to consider include the following:

Patent owners should consider what rights they wish to reserve to basic or non-commercial researchers when licensing or enforcing patents, and should draft agreements or complaints accordingly. They should also consider the apparent potential for the Court of Appeals for the Federal Circuit to revisit the scope of the § 271(e)(1) safe harbor.

Drug and device companies that acquire technology should consider the AUTM recommendations that may cause a licensor to seek to reserve rights to allow basic or non-commercial researchers to use the licensed technology in non-commercial research. They should also consider the possibility that the scope of the § 271(e)(1) safe harbor may be uncertain or changing.

Basic or noncommercial researchers and academic institutions should be aware that there has been attention to the treatment of non-commercial research in cases like the Myriad dispute before the Supreme Court and the AIA suit that named non-profit research organizations as patent infringement defendants. There may be increasing patent risk to researchers, but there may also be sentiment in the courts to limit patent assertion against basic researchers.