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As previously noted, courts are inconsistent in the treatment of § 271(e)(1). Problems regarding the scope of § 271(e)(1) took center stage in Eli Lilly when the Supreme Court took a plain language approach to the term “patented invention.”147 It again arose in Integra when the Supreme Court adopted a plain language approach to the scope of “reasonably related.”148
After Eli Lilly, courts focused on two phrases from § 271(e)(1) in the interpretation of its scope. First, they looked at whether the use of the patent was “reasonably related” to the pursuit of FDA approval.149 Second, courts asked whether the invention qualified as a
“patented invention” under § 271(e)(1). In order to apply § 271(e)(1) to the research tool patent problem, it must be evaluated by both criteria, as well as the principles underlying the inclusion of the Bolar Amendment into the Hatch-Waxman Act.
1. Legislative Considerations Under § 271(e) (1)
The legislative history is a poor guide for interpreting what Congress tried to accomplish with § 271(e)(1).150 The safe harbor of § 271(e)(1) was not part of the original quid pro quo that comprises the body of Hatch-Waxman.151 Indeed, it appears that § 271(e)(1) was an afterthought, that corrected only the de facto term extension that a pioneer drug company enjoyed due to the necessity of FDA approval before the marketing of generic drugs.152 Because the Bolar Amendment was not originally included in the bill, policy considerations arising from the legislative debates cannot be easily assigned. Nevertheless, Congress considered three main themes that appear to be important to the passage of the Hatch-Waxman Act as a whole. They are: (1) providing the consumer with cheap, generic versions of drugs; (2) reducing the latency time in which the generic drug appears on the market after the expiration of the patent; and (3) accomplishing the first two goals while preserving the incentives to pioneer drug companies to invest in new drug discovery and marketing.
Congress’s first intended goal with the passage of Hatch-Waxman was to make cheap drugs available to the public. Congress accomplished this by two means: amending the FDCA to allow generic drug manufacturers to take advantage of the ANDA process for drug approval,153 and creating a right to a de minimis interference on the rights of the pioneer
147 Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 665 (1990).
148 Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).
149 Id.
150 Eli Lilly, 496 U.S. at 669 (dismissing legislative history arguments as unclear).
151 Thus, the generic manufacturer's benefit arising from Hatch-Waxman's quid pro quo was not primarily to overturn Roche.
152 In the original Senate version of the bill, the Bolar Amendment was absent. The House of Representatives added it to avoid giving pioneer drug manufacturers a term extension to their patent term.
153 Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, § 202, 98 Stat. 1585
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drug patent holder in order to pre-approve generic drugs.154 These provisions of Hatch-Waxman, in aggregate, removed the barriers keeping widespread generic drugs out of the market.
Congress accomplished the second goal by bringing generic drugs to market cheaper and more quickly with the ANDA process and the safe harbor. The amendment to the FDCA, which made the ANDA procedure available to generic drug manufacturers, provided the incentive to generic pharmaceutical manufacturers to enter the market. This was due to a drastic reduction in the costs associated with the FDA approval process, compared to those of the NDA approval process. Congress intended to drive down the cost of bringing generic drugs to market because they would not have a term of market exclusivity to recoup the cost associated with the FDA approval process.155 In addition to making the entry of generic drugs into the marketplace feasible for generic manufacturers from a cost stand-point, Congress also amended the patent statute to remove the latency between the expiration of the patent and the arrival of the generic version of the drug on the market. This goal was accomplished by the safe harbor of § 271(e)(1).
Finally, Congress wanted to bring cheap, generic drugs to market as soon as possible, but only if the incentives were preserved that brought innovative new drugs to market by pioneer pharmaceutical manufacturers.156 To accomplish this, Congress introduced § 156 to the patent statute, which gave pioneer pharmaceutical manufacturers a statutory right to recover market exclusivity lost to the FDA approval process. Congress designed § 156 to replace the de facto term extension, which helped pioneer pharmaceutical manufacturers recoup the investment in research and development prior to passage of the Hatch-Waxman Act. Congress offset any loss of de facto term extension through the term contained in § 271(e)(1). In conjunction with the changes to the FDCA, this brought generic drugs to market as soon as the term of the patent expired. Thus, pioneer pharmaceutical companies had more time to recoup their investments in research and development and FDA approval.
In the end, pioneer drug companies received a larger window of statutory exclusivity, but lost the bars keeping generic drugs off the market.
2. Reasonably Related and Patented Invention of the Interpretations of § 271(e) (1)
Patented research tools are “reasonably related” to FDA approval when they are used to develop or submit data to the FDA. Research tools that might qualify include testing
(1984).
154 35 U.S.C. 271(e), § 202, 98 Stat. at 1603.
155 130 CONG. REC. 23057 (1984) (statement of Representative Waxman).
156 Weiswasser & Danzis, supra note 43, at 590.
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procedures, processes, and apparatuses; DNA probes; and patented enzymes.157 Naturally, research tools can, in most instances, also be used for purposes other than for FDA approval, and in such cases they do not fall under the scope of § 271(e)(1).158 Although an in-depth analysis of the dividing line between when a research tool patent is or is not reasonably related is beyond the scope of this thesis, it is helpful to put the problem into context with respect to the point in the approval process when the safe harbor applies. Doing so helps to circumscribe which research tools can benefit from the safe harbor of § 271(e)(1).
As previously discussed, the Federal Circuit and now the Supreme Court grappled with the timing issue with respect to when the safe harbor serves as a defense to patent infringement. According to the Supreme Court, the safe harbor protects nearly all unlicensed uses of patented inventions when used pursuant to the FDA approval process.159 In part, the Supreme Court held:
We think it apparent from the statutory text that § 271(e)(1)’s exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA… There is simply no room in the statute for excluding certain information from the exemption on the basis of the phase of research in which it is developed or the particular submission in which it could be included.160
The Supreme Court opted for the plain language, but left questions regarding at what point an otherwise infringing use falls outside the safe harbor. In any event, both the Federal Circuit and the Supreme Court’s holdings appear to ignore Congress's intent of a de minimis impact on the inventions using the safe harbor.
The research tool problem more naturally falls under the second approach for resolving issues with § 271(e)(1), which is an analysis of the phrase “patented invention.” The difficult issue to resolve with respect to the term “patented invention” is its scope. Both the legislative history and statutory language are silent.161 Congress’s original consideration of the scope of the term "patented invention" omitted animal drugs and veterinary biological products.162 In 1988, they further narrowed the scope of which animal drugs and veterinary
157 Warburg et al., supra note 12, at 266.
158 This logic follows from the fact that if a use is not reasonably related to the generation and development of data pursuant to FDA approval, the particular invention for which the otherwise in-fringing use is made is irrelevant — the safe harbor will not shield the infringement. See Jian Xiao, Carving Out a Biotechnology Research Tool Exception to the Safe Harbor Provision of 35 U.S.C. § 271(e)(1), 12 TEXAS INTELLECTUAL PROPERTY LAW JOURNAL 23, 55 (2003), at 37-40.
159 Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).
160 Id.
161 Congress never directly addressed research tools as part of the scope of Hatch-Waxman.
162 Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, § 201, 98 Stat. 1585
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biological products should be excluded by amending the safe harbor to specifically exclude animal drugs and veterinary processes manufactured by molecular biological techniques.163
Similarly, records of the House and Senate debates suggest that the focus concentrated primarily on drugs as the patented inventions eligible for the safe harbor.164 The debate in both houses focused on drugs: the advantages of cheap drugs,165 the necessity to protect the patent protection of drugs, and the compromise between pharmaceutical companies and the public's need for cheap, generic drugs.166 Medical devices were not mentioned in the debates, nor did Congress consider patented research tools. Despite Congress’s seemingly myopic vision of the safe harbor as applying only to drugs and some medical devices, the version ratified contained no narrowing language. Thus, in the case of § 271(e)(1), Congressional debates indicated that it applied to drugs and some devices, but Congress ratified the bill with no such narrowing language. Consequently, the true intent of Congress is obscured by the seemingly inconsistent messages. The most likely explanation is that Congress simply never anticipated that § 271(e)(1) would apply to patents covering more than just drugs and some “medical devices.”167
In Eli Lilly, the Supreme Court attempted to sort out the inconsistencies in the legislative history and the text of § 271(e)(1).168 The Court opined that § 201 (§ 156) and § 202 (§ 271(e)) of Hatch-Waxman are intended to be complementary.169 Despite the lack of narrowing language in § 271(e)(1), the Supreme Court indicated that it was part of an
“overall scheme” intended to correct the distortions on the front end of the patent term (FDA approval) and on the back end of the patent term (the de facto term extension).170 The Court confused the issue, however, with the suggestion that “there may be some relatively rare situations in which a patentee will obtain the advantage of the § 201 extension but not suffer the disadvantage of the § 202 non-infringement provision, and others in which [the patentee]
will suffer the disadvantage without the benefit.”171 The Court reinforced and expanded this
(1984).
163 Generic Animal Drug and Patent Term Restoration Act, Pub. L. No. 100-670, § 201(i)(1)(A), 102 Stat. 3971 (1988) (codified in 35 U.S.C. § 271(e)(1)). Congress further restricted animal drugs and veterinary biological products with the phrase “which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques[.]” 35 U.S.C. § 271(e)(1).
164 H.R. Rept. No. 98-857, pt. 1, at 20 (1984). In one instance “medical devices” were also considered, but it is the only reference found in the legislative history that deviates from the word “drug” and its derivations.
165 130 CONG. REC. 23057-65 (1984).
166 Id.
167 H.R. Rept. No. 98-857, pt. 1, at 20 (1984); Xiao, supra note 158, at 56.
168 Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 665-74 (1990).
169 Id. at 672-73.
170 Id. at 670. The Supreme Court opined that Hatch-Waxman was designed to correct problems arising from the patent term lost while a drug awaited FDA approval, and the de facto patent term that a drug received while the generic version awaited FDA approval. Congress corrected the de facto term extension with both changes to the FDCA and the introduction of § 271(e)(1). Id. at 671-672.
171 Id. at 671-672 (emphasis added).
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principle in Integra.172 Thus, the court implied that symmetry is the overriding principle.
But the Court said that it does not always apply, opening the door to Class I and II medical devices, cosmetics, and research tools, none of which are eligible for term extension under § 156.173 Indeed, the Court expressly rejected this sort of “disequilibrium [from becoming] the general rule for patents relating to all products (other than drugs)…”174 But, if the door is open to large classes of patented inventions such as Class I and II medical devices, cosmetics, and research tools, what did the Court mean by “relatively rare situations”? The application of “relatively rare” to entire classes of inventions is therefore contradictory, which leaves the reader's understanding no clearer with respect to the scope of § 271(e)(1).175
Another way to reconcile the scope of the term “patented invention” is through the definitions codified as part of § 201 of the Hatch-Waxman Act.176 Because of the complementary nature of § 156 and § 271(e)(1),177 Congress plausibly intended for the definitions to apply to both sections equally.178 Indeed, the Supreme Court reinforced this principle when it stated that the “1984 Act [must be] taken as a whole.”179
Based on the literal language of the definitions, however, this argument is tenuous. In § 156, the term “product” is narrowed to human drug products or medical devices subject to regulation under the FDCA, in addition to food additives and cosmetics.180 The term
“patent” is defined to be “a patent issued by the United States Patent and Trademark Office,”181 a much broader application than the scope of “product.”182 Furthermore, the term “invention” is conspicuously absent from the definitions, suggesting that the definitions were not intended to apply to § 271(e)(1), especially given the fact that § 271(e)(1) and § 156 were not drafted at the same time. Using this reasoning, it seems unlikely that Congress
172 Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).
173 None of these devices have an extensive regulatory approval process as required by § 156.
174 Eli Lilly, 496 U.S. at 672. The Court continued:
It seems most implausible to us that Congress, being demonstrably aware of the dual distorting effects of regulatory approval requirements in this entire area … should choose to address both those distortions only for drug products; and for other products named in § 201 should enact provisions which not only leave in place an anticompetitive restriction at the end of the monopoly term but simultaneously expand the monopoly itself, thereby not only failing to eliminate but positively aggravating distortion of the [patent term].
Id. at 672-73.
175 AbTox, Inc. v. Exitron Corp., 122 F.3d 1019, 1029 (Fed. Cir. 1997) (noting that the Supreme Court's broad holding with respect to classes of inventions falling into the scope of § 271(e)(1) contradicts its narrow reasoning of statutory symmetry between §§ 271(e)(1) and 156).
176 Codified as 35 U.S.C. § 156 (2000).
177 Eli Lilly, 496 U.S. at 673.
178 Hatch-Waxman Act, Pub. L. No. 98-417 § 201(f), 98 Stat. 1585, 1600-01 (1984). This argument logically follows from the structure of Hatch-Waxman. Title II contained definitions in § 201 (what is today 35 U.S.C. § 156). Section 202 of Hatch-Waxman became 35 U.S.C. § 271(e)(1).
179 Eli Lilly, 496 U.S. at 669.
180 U.S.C. § 156(f)(1).
181 U.S.C. § 156(f)(6).
182 U.S.C. § 156(f)(1). See also Eli Lilly, 496 U.S. at 669.
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intended the definition of "product" to extend to the scope of “patented invention.”
Nevertheless, even if the definitions do not apply directly, they shed additional light as to the Congressional intent of the meaning of “patented invention.” This logic gives credence to the argument that “product” and “invention” are analogous because they serve similar functions — they both define the scope of the products or inventions that are eligible for the safe harbor or term extension. If the symmetry principle is applied, they would have to be the same product or invention.
It is just as easy to argue that if § 156 and § 271(e)(1) are to be taken as a whole, then the terms arguably were intended to be non-analogous and have different scopes. The Supreme Court strengthened this argument by suggesting § 271(e)(1) can apply without § 156 and visa versa.183 Under this line of analysis, the term “patented invention” is unrestricted except that it is reasonably related to the pursuit of the generation of information under laws regulating drugs. It is based on a plain language approach, implying that Congress purposefully chose not to include narrowing language in § 271(e)(1) because of its overall goal of ensuring cheap, generic drugs. Thus, the definitions of § 156 serve no purpose with respect to the interpretation of the scope of “patented invention” in § 271(e)(1).
Unfortunately, twenty years after the fact either argument is plausible. Presumably, in the spirit of viewing the 1984 Act as a whole, the best approach may be to use § 156's framework and the complementary nature of § 156 and § 271(e)(1) to elucidate general principles embodied in the Hatch-Waxman Act. Section 271(e)(1) would then be read in light of the goals of Congress and the overall principles embodied in the Hatch-Waxman Act as a whole. The result would balance the principles of (1) symmetry, (2) reading the 1984 Act as a whole (where the distortions imbued in the patent term are removed from both the front end and the back of the patent term) except in rare situations, and (3) the overall goal of providing the public with cheap, generic drugs while preserving incentives to pioneer patent manufacturers. These principles would resolve problems when the plain language application defeats legislative purpose of the safe harbor. The scope of the plain language of
§ 271(e)(1) would apply to any patented invention as long as it furthers the overriding goals set forth by Congress and read in light of the principles gleaned from § 156, Eli Lilly, and Integra. Naturally, medical devices, cosmetics, and food additives would be within the scope of “patented invention” because they are included within the subject matter of the FDCA.184 Research tools, on the other hand, which are not part of the subject matter of the FDCA,185 may fall outside the scope of the safe harbor.
183 Eli Lilly, 496 U.S. at 671-72.
184 21 U.S.C. § 321 (2005).
185 Id. (Research tools are not mentioned within the statute.).
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3. The Arguments of Public Policy, de minimis Interference, Legislative Intent and Plain Language
First of all, patented research tools must be evaluated both from the standpoint of patent law policy and also the stated goals of the Hatch-Waxman Act. Naturally, the principle of a safe harbor is contrary to the principle of market exclusivity embodied in the patent statute.186 Patents give inventors incentives to create and market their inventions. Courts recognized a general research exemption at common law, but the Federal Circuit recently indicated that it was not available for uses with commercial implications.187 From the standpoint of patent policy, current trends tend to be more protective of patent exclusivity.188 Nevertheless, the safe harbor of § 271(e)(1) is not a common law principle, and a careful balancing of policy, where the FDCA significantly affects the term of exclusivity granted to a patent holder, justifies a safe harbor to combat the term effects resulting from a long FDA approval process. From the standpoint of patent law, however, extension of the scope of the safe harbor to Class I and II medical devices, cosmetics, and other products covered by the FDCA with no extensive pre-market approval process is a stretch. This result makes sense because the FDCA does not require extensive pre-market testing on these devices that effectively toll the term of their patents. Moreover, if protection for these devices that are included in the scope of the FDCA is a stretch,189 then extension of the safe harbor to patented research tools is an even greater stretch because research tools are not covered by any federal legislation requiring a regulatory process. In other words, like Class I and II medical devices, research tools have no need for a term extension. Arguably then, they also have no need for a safe harbor according to a symmetry argument.
As previously noted, Congress attempted to create a market environment where cheap, generic drugs were available to consumers, while preserving the incentives to pioneer pharmaceutical companies to pursue research and development of new drugs. Congress took the patent policy into account, but in the end decided that the safe harbor was, at most, a de
As previously noted, Congress attempted to create a market environment where cheap, generic drugs were available to consumers, while preserving the incentives to pioneer pharmaceutical companies to pursue research and development of new drugs. Congress took the patent policy into account, but in the end decided that the safe harbor was, at most, a de