論美國之生醫科技研究工具之專利保護與授權 - 政大學術集成

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(1)國立政治大學法律科際整合研究所碩士學位論文指導教授：沈宗倫博士. 政治大. 學. ‧ 國. 論美國之生醫科技研究工具之立專利保護與授權. ‧. Research Tool Patent Protection and Licensing for. Nat. n. al. er. io. sit. y. Biomedical Innovations in United States. Ch. engchi. i Un. v. 研究生蔡鴻文中華民國九十九年六月二十八日.

(2) 論美國之生醫科技研究工具之專利保護與授權摘要. 論文內容著重在以下三個重點: 試驗免責、延展性授權與延展性專利範圍、書面描述要件。首先是 35 U.S.C. § 271(e)(1)之 Safe Harbor 緣由、案例、Integra v. Merck 一案之過程與後續影響以及 271(e)(1)的試驗免責與研究工具的關係, 最後提出建議應限縮試驗免責範圍, 以強制授權或是明定專利法中的試驗免責範圍緩和基礎研究專利範圍過大現象(第二、三章)。. 政治大研究工具專利開發者多所採用之延展性授權與延展性專利範圍無非立是想多獲得利益, 而研究工具專利對於生物科技發展是相當重要的, 第四. ‧ 國. 學. 章先以四方角色(大藥廠、大學與非營利機構、小藥廠與政府單位)討論研究工具對於本身的利益考量, 並且因試驗免責範圍不明, 延展性授權契約. ‧. 已是普遍存在, 詳細地討論其存在的意義, 並且分析已探討延展性授權金/. y. sit. Nat. 契約議題文章, 另外對於延展性專利保護範圍, 明確指出哪一些核准專利. er. io. 是延展性保護範圍, 雖然 2001 年的三方會議已經明確地限制此類專利的核准, 由於 Rochester v. G.D. a Searle 一案, 法院認為 Rochester 專利包含延. n. iv l C n 歸因於未揭露出清楚的書面描述要件, hengchi U. 展性保護範圍,. 於是進行第五章書. 面描述要件的討論。. 進而較詳細地探討生物機轉的途徑特性、功能性敘述必要性以及書面描述上的困難, 然後進行相關案件探討, 提出自己對於專利文件之書面描述要件的看法, 希望能在生物類研究工具專利保護範圍與書面描述要件中取平衡, 適切地保護研究工具發明。最後並提出總結與建議。.

(3) Research Tool Patent Protection and Licensing for Biomedical Innovations in United States. Abstract Over the last twenty years, the biotechnology industry has grown very rapidly, and increased our understanding of incurable diseases. Research tools are playing important role to form the core of the pharmaceutical research, development, and testing. Because this industry is so research tool intensive, numerous problems have arisen stemming from the competing interests of the many players in this field. From the legislative history, the Hatch-Waxman Act embodies the legislative compromise balancing the competing interests of the pioneer pharmaceutical and allied research-based products industries with those of the generic drug industry. And the section 35 U.S.C. § 271(e)(1) statute provides a “safe harbor” from patent infringement based on activities that are reasonably related to obtaining FDA regulatory approval of drug products, but the plain language is fairly ambiguous. In Eli Lilly v. Medtronic, Supreme Court held the safe harbor extends to medical devices, despite the fact that § 271(e)(1) does not refer specifically to medical devices. Recently, for the case of Merck v. Integra, Federal Circuit announced that the term “solely” limits the safe harbor exemption from extending beyond uses of patented inventions that are reasonably related to those specified in § 271(e)(1). But Supreme Court rejected and held that § 271(e)(1) applies to uses of patented inventions that are reasonably related to the development and submission of any information to the FDA. The Court was silent on the potential applications and opened the questions of the safe harbor’s application to patented research tools. These problems may be the reason that research tool providers attempt to request royalties such as reach-through royalties for covering the downstream compounds or products. They also try to file the patent application with the reach-through claim for claiming a future invention. However, the use of reach-through royalties is still controversial and causing a decrease in innovation. Patentees attempt to obtain reach-through claims for covering a future invention without actually describing in the written description. The Federal Circuit's holding in Rochester v. G.D. Searle that the Rochester's patents failed the written description requirement, and Rochester should curtail the use of reach-through claims. So far the USPTO has not been uniform in its application of written description requirement. We therefore propose a new test to determine whether, and under which circumstances, functional claiming may satisfy the written description requirement. One should not overreach the scope of the inventor’s contribution to the field of art as described in the patent specification. The approach would provide sufficient incentive for pioneering inventions, preserve room for the future, and thus expect to promote progress and to advance the purposes of patent law.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. Keywords: Research Tools, Hatch-Waxman Act, Safe Harbor, Reach-Through Royalty, Reach-Through Claim, Written Description Requirement.

(4) TABLE OF CONTENTS. I. Introduction .............................................................................................. 4 II. Overview of the Research Tools............................................................. 9 A. The Concepts of Research Tools ............................................................... 9 B. The Types of Research Tools and the Marketing Strategy..................... 10 C. Concerns and Problems on Research Tools .......................................... 12. III. Legislative Problems of § 271(e)(1) for Research Tool Patents ..... 14 A. Introduction of Safe Harbor of § 271(e)(1).............................................. 15. 政治大 2. The Competition of Drug Price and Patent Term Restoration Act.....................17 立 B. Judicial Interpretations ............................................................................. 18 1. The Status of Pharmaceutical Industrials before Hatch-Waxman Act. ............ 15. ‧ 國. 學. 1. Eli Lilly & Co. v. Medtronic, Inc..........................................................................19 2. Intermedics, Inc. v. Ventritex, Inc. .....................................................................20. ‧. 3. AbTox, Inc. v. Exitron Corp................................................................................20. y. Nat. 4. Infigen, Inc. v. Advanced Cell Technology, Inc. .................................................21. io. sit. C. Integra Lifesciences I, Ltd. v. Merck KGaA ............................................ 21. er. 1. Progress of Integra Lifesciences I, Ltd. v. Merck KGaA....................................22. al. n. iv n C h ethe D. Research Exemption versus i U ......................................... 31 n gSafe c hHarbor 2. Analysis of Disputed Patent Claims in Integra v. Merck and Rader’s Opinions 27. E. Scope of § 271(e) (1) with Respect to Research Tool Patent ................ 32. 1. Legislative Considerations Under § 271(e) (1) .................................................33 2. Reasonably Related and Patented Invention of the Interpre. of § 271(e) (1) ...34 3. The Arguments of Public Policy, de minimis Interference, Legislative Intent and Plain Language.....................................................................................................39. F. Legislative Proposals for Safe Harbor....................................................... 46 1. Limiting the Research Exemption .....................................................................46 2. Adopting the Fair Use for Patent Law ...............................................................47 3. Applying the Compulsory Licensing..................................................................48 4. Expanding the Research Exemption for Non-commercial Use.........................49. G. Outlook and Compromised Solutions of Research Tools ..................... 49 2.

(5) 1. Positive Effects for Research Tools ..................................................................50 2. Negative Effects for Research Tools.................................................................51. IV. Reach-Through Royalties and Claims of Research Tools ............. 53 A. The Competing Interests of Various Users .............................................. 55 1. For Large Pharmaceutical Companies .............................................................55 2. For Universities and Other Non profits..............................................................56 3. For Small and Start-up Biotechnology Firms ....................................................57 4. For Government Interests .................................................................................59. B. Reach-Through Royalties.......................................................................... 60 1. Trends in the Use of Reach-Through Royalty Provisions .................................60. 政治大. 2. Reach-Through Royalties .................................................................................61 3. Reach-through Licensing Provisions for Small Biotechnology Firms ...............63. 立. C. Reach-Through Claims............................................................................. 66. ‧ 國. 學. 1. The Explanation of Reach-Through Claims ......................................................67 2. Trilateral Project B3b and the Univ. of Rochester v. G.D. Searle Case.............68. ‧. V. Written Description Requirements...................................................... 71. sit. y. Nat. A. The Nature of Biological Pathway ........................................................... 73. io. al. er. 1. Biological Pathways in General and the NF-κβ Pathway..................................73. n. 2. The NF-κβ Patent .............................................................................................74. Ch. i Un. v. B. Case Study for Written Description Requirement ................................... 77. engchi. 1. Regents of Univ. of Cal. v. Eli Lilly & Co. ..........................................................77 2. Enzo Biochem, Inc. v. Gen-Probe Inc. ..............................................................78 3. Univ. of Rochester v. G.D. Searle & Co.............................................................80. C. Proposal: Appropriate Protecting Biomedical Inventions..................... 81 1. Referring the Opinions from Scholars...............................................................81 2. Adopting the Common Feature Test .................................................................82 3. Disclosing the Functional Claims ......................................................................83 4. Biological Patent Application Practices.............................................................84 5. The Common Feature Test Practices ...............................................................87. V. Conclusions............................................................................................... 88 Reference ........................................................................................................ 90 3.

(6) I. Introduction The 21st century has been hailed as the biotechnology century as a result of the remarkable advances that are made almost daily in both our understanding of the genetic resources, as well as our ability to manipulate them. The Organization for Economic Co-operation and Development (OECD) defines biotechnology as follows: “The application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services.”1 The potential of biotechnology is most pronounced in the medical field where medical uses for genes and genetic information include: diagnostic genetic testing; gene therapeutics based upon the introduction of new genes; gene regulators which function by replacing command sequences; protein therapeutics which are medicinal proteins produced in laboratories; pharmacogenetics;2 and small molecule drugs discovered through the use of. 立. 政治大. ‧. ‧ 國. 學. biotechnology techniques and disease targets.3 Even biotechnology has the potential to affect many life-science fields, this thesis will focus on the legal issues related to research tools which are compositions or methods useful in conducting experiments in biomedical applications.. n. al. er. io. sit. y. Nat. The reason for the growth of this industry is, in part, due to the discovery of recombinant DNA techniques and the invention of other research tools allowing for manipulation and study of the genome, proteins, and biological pathways. However, because the industry is so research tool intensive, numerous problems have arisen stemming from the competing interests of the many players in the biotechnology field, including universities and other non-profit entities, private research firms, private tool innovators, and the pharmaceutical companies. Moreover, research tools are extremely varied, ranging from broad spectrum tools with wide applications to very specific tools with limited applications. In addition to these problems, the United States Congress may have inadvertently created a loophole in § 271(e)(1), allowing for virtually unlimited use of research tools without the attendant obligation to obtain a license in certain situations.. Ch. engchi. i Un. v. The United States Congress in 1984 passed the Hatch-Waxman Act, also known as the 1. 2. 3. Organization for Economic Co-operation and Development, Scientific, Industrial and Health Applications of Biotechnology - A Statistical Definition, available at http://www.oecd.org/document/42/0,2340,en_2649_34537_1933994_1_1_1_1,00.html, accessed at June 20, 2010. Michael J. Malinowski & Maureen A. O'Rourke, A False Start? The Impact of Federal Policy on the Genotechnology Industry, 13 YALE JOURNAL ON REGULATION 162 (1996), at 177. Laurie L. Hill, The Race to Patent the Genome: Free Riders, Hold Ups, and the Future of Medical Breakthroughs, 11 TEXAS INTELLECTUAL PROPERTY LAW JOURNAL 221 (2003), at 223. 4.

(7) Drug Price Competition and Patent Term Restoration Act of 1984.4 Hatch-Waxman was a carefully negotiated act, designed with incentives to bring cheap, generic drugs to market when the patent on the pioneer drug expired, while preserving the incentives for research and development of new drugs to the pioneer drug manufacturers. Prior to Hatch-Waxman, generic drug manufacturers submitted New Drug Applications (NDA) to the FDA before they could market the drug. The approval process has to take five to seven years, and tests could not begin until the relevant drug patents expired. Under those situations, bringing most generic drugs to market was not cost-effective. Thus, because of a lack of competition the public suffered from artificially high drug prices post-patent. Hatch-Waxman solved the problems preventing generic drugs from entering the market by substituting for the NDA requirement and Abbreviated New Drug Application (ANDA) requirement, which required the generic manufacturer only to show bio-equivalency, 5 reducing the approval time to one to two years. Additionally, the Congress created a “safe harbor” from infringement, § 271(e)(1), that allows generic manufacturers to develop “reasonably related” data for their ANDA prior to the expiration of the patent on the pioneer drug. The pioneer drug manufacturers, in turn, receive a term extension to make up for market exclusivity lost to the FDA approval process, allowing them to recoup more of the research and development costs during the life of the patent.. 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. In theory, the principles embodied by Hatch-Waxman are a boon to the public. However, despite Congress’s seemingly clear goals, but poor drafting of § 271(e)(1) left the safe harbor open to unintended consequences. One such consequence is the preempting of patented research tools from infringement when they are used to develop and submit information pursuant to FDA approval of a new drug or device. Such is very likely to be litigated increasingly (e.g. Eli Lilly v. Medtronic, Intermedics v. Ventritex, and Integra v. Merck etc.)6 often as research tools take an increasingly prominent role in research and development 4. Ch. engchi. i Un. v. Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585. (codified at 15 U.S.C. §§ 68b-68c, 70b (1994) 5 A drug shall be considered to be bioequivalent to a listed ... drug if — (i) the rate and extent of absorption of the drug do not show ... a significant difference from the rate and extent of absorption...of the listed drug when administered at the same molar dose of . . . the therapeutic ingredient under similar experimental ... conditions in either a single dose or multiple doses; or .. . (ii) the extent of absorption of the drug does not show a . . . significant difference from the extent of absorption of the . . . listed drug when administered at the same molar dose of the . . . therapeutic ingredient under similar experimental conditions in ... either a single dose or multiple doses and the difference from . . . the listed drug in the rate of absorption of the drug is . . . intentional, is reflected in its proposed labeling, is not . . . essential to the attainment of effective body drug . . . concentrations on chronic use, and is considered medically . . . insignificant for the drug. 21 U.S.C. § 355(j)(8)(B) (2003), available at http://www.law.cornell.edu/uscode/html/uscode21/usc_sec_21_00000355----000-.html, accessed at June 20, 2010. 6 Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 679 (1990); Intermedics, Inc. v. Ventritex, Inc., 775 F. Supp. 1269 (N.D. Cal. 1991), aff'd, 991 F.2d 808 (Fed. Cir. 1993); Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003), vacated, 545 U.S. 193 (2005). 5.

(8) activities. Besides, granting the research tools patent may raise problems toward public policy and potentially limiting the flow of science. With little or no protection from the safe harbor, innovators will face great liability from the research tool patents owners. Furthermore, the common-law research exemption has recently been narrowed. Although the Supreme Court in Integra v. Merck7 held that the exception was not limited to tests that generate safety and effectiveness data; rather, it included “any” tests (including basic research on biological mechanisms) that might generate data submitted to the FDA. And it failed to discuss the applicability under the safe harbor to innovators prior to submission of a new drug candidate to the FDA. Thus, the holding did little to clarify the research tool problem. It only further confused the issues as they relate to research tools. Nevertheless, the Integra court definitely acknowledged that the cumulative effect of the number of patent licenses required to develop a drug can be substantial. In addition to the high costs associated with obtaining numerous licenses, manufacturers may also face the resistance of patentees who refuse to license their technologies, thereby blocking entire research programs. Therefore four practical approaches have been suggested to achieve the reasonably incentive and appropriately protection for biomedical research tool patents.8 The legislative issue of. 立. 政治大. ‧. ‧ 國. 學. experimental research use exemption and the reach-through royalties/claims will be further discussed in this thesis.. n. al. er. io. sit. y. Nat. Basically, the interaction is problematic between private suppliers and users of research tools on one hand, and not-for-profit, budget-conscious institutions, such as universities, on the other hand. These problems generally result from the variation in the perceived value of the research tools. Research tool providers strategically attempt to leverage their tools to request royalties such as reach-through royalties, which means not only on the tools, but also on the downstream inventions. They also try to file the patent application with broad protection by way of obtaining the reach-through claim which means a claim to a future invention based on a current disclosed invention.. Ch. engchi. i Un. v. Such license agreements for biomedical research tools often contain reach-through royalty provisions. The provisions are controversial because they require the licensee to provide the licensor with royalties for, or exclusive use of, future discoveries made with the tool. Many see the use of reach-through royalties as contributing to the decrease in the dissemination of tools among academics, subsequently causing a decrease in the sharing of scientific knowledge. Some see reach-through licensing as limiting innovation, and therefore as detrimental to the public good. We will discuss the various competing interests involved 7 8. Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005). Wen-Yin Chen, To Study the Impacts of Basic Science on the Biotechnology from the U.S. Practical Experiences, 67 TAIPEI UNIVERSITY LAW REVIEW 115 (2008), at 177. (“The patent authority should take some measures to avoid the problems caused by the basic science patents, such as (1)clarifying the application of experimental use exemption; (2)establishing the standard of patent licensing; (3) prohibiting the reach-through claims; and (4)adopting the compulsory licensing under WTO/TRIPs.”) 6.

(9) in the reach-through licensing controversy and suggests a regulatory scheme that provides for the widespread dissemination of research tools among academics, while being sensitive to the concerns of small businesses whose survival depends on being able to accurately value their tools. In addition to reach-through royalty, the issued patent with reach-through claims also exists and it attempts to cover the downstream products discovered by the basic patented research tools even they are not specifically or fully disclosed in the patent. Many research tool and reach-through patents are the results of functional claiming which their impact is certainly enormous. Due to their broad scope, the research tool patents potentially can cover prior art compounds. Even more significantly, the reach-through claims cast shadows on future development and downstream innovations involving the claimed biological functionality. On the other hand, an argument in favor of allowing functional claims is, “incentives may matter” to promote the upstream discoveries because they “may prove of great benefit to the human race.”9. 立. 政治大. ‧. ‧ 國. 學. Reach-through claims, however, they normally fail to meet at least one and often several of the written description, enablement, utility, novelty, or non-obviousness requirements. The invention must be described in the patent in a manner sufficiently clear and complete to enable the skilled man to make/use it. The mentioned materials for use in a process must be adequately described in the patent or obtainable without undue burden. An example of a denied claim was when the United States Federal Circuit refused to recognize a reach-through claim for University of Rochester10. In this case, Rochester wanted to obtain. er. io. sit. y. Nat. patent protection not just for the screening method they had devised but for any drugs with the necessary selective inhibition properties and it was ruled that the Rochester’s patent failed to meet the written description requirement and the enablement requirement.. n. al. Ch. engchi. i Un. v. It is truly that to file a patent application for research tools in early stages remains necessary. In order to compensate for the early stage, reach-through claims must ensure the adequate and future protections. We propose an approach to test and to determine whether, and under which circumstances, functional claiming may satisfy the written description requirement. By excluding unwarranted functional claiming patents, the proposed approach preserves the purpose of written description requirement which is to ensure that the scope of the patent does not overreach the scope of the inventor’s contribution to the field of art as described in the patent specification.. 9 10. Corp. of Am. Holdings (LabCorp) v. Metabolite Labs., Inc., 126 S. Ct. 2921 (Breyer, J., dissenting). Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 926 (Fed. Cir. 2004). 7.

(10) This thesis will explore the problems related to research tools, including the controversial issues induced by research tools and how they fit into the statutory scheme of the Hatch-Waxman Act and § 271(e)(1), in light of the Court's decisions in Eli Lilly and Integra cases. The issues of reach-through royalties and reach-through patent claims are also discussed. Finally we provide an approach to achieve the adequate written description for research tools. In this thesis, Chapter I is introduction. Chapter II indicates the concepts of the research tools and discovers their controversial problems. Chapter III discusses the legislative problems and case law surrounding the safe harbor. An analysis of the research tool problem within the context of the principles, language, and case law is included. Chapter IV considers the competing interests of research tools for various users and the enforcements of reach-through royalties and claims. Chapter V studies three selected trial cases on research tools and proposes an approach to make adequate written description for appropriate protecting the inventions of biomedical research tools. At last, Chapter VI summarizes the perspectives and proposals mentioned at Chapter III, IV, and V for the research tools in biomedical area.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 8. i Un. v.

(11) II. Overview of the Research Tools This chapter introduces the concepts of biomedical research tools at section A. According to the different applications, the types and corresponding marketing strategies for research tools are subsequently discussed at section B. Due to the commercial possibilities and potentials of research tools arising, the concerns and problems are therefore explored at section C. A. The Concepts of Research Tools Developments in biomedical research in the last decade have increased our understanding of the cause and development of incurable diseases, thus enabling us to develop products and services for the treatment of those diseases. The nature of the development of those products and services, however, is increasingly cumulative and collaborative due to the complex and uncertain nature of biotechnology research and development. Increasing numbers of so-called research tools are needed to develop much needed products and services that will directly impact the health of the public. Patented research tools are ubiquitous in the pharmaceutical industry. They save valuable time and money for researchers.11 Over the last twenty years, the biotechnology industry has boomed,. 立. 政治大. ‧. ‧ 國. 學. y. Nat. sit. n. al. er. io. and research tools now form the core of much of the pharmaceutical research, development, and testing done today.12 Such inventions include patented assays and procedures; patented cell lines; patented recombinant DNA constructs and methods; enzymes; DNA microarrays for high throughput drug screening; patented research animals; research tools for bioinformatics such as computer programs; DNA, protein, and combinatorial chemistry libraries; reagents; drugs and drug targets; and many other patented machines and apparatuses.13 Pharmaceutical manufacturers and other biotechnology companies rely on patented research tools to save time and money. Under 35 U.S.C. § 271(e)(1), it may be possible for pharmaceutical manufacturers submitting applications for new, patented drugs, to take advantage of the safe harbor, whereas the safe harbor was clearly included in Hatch-Waxman as part of a quid pro quo for the benefit of generic drug manufacturers, not the makers of new drugs.. 11. 12. 13. Ch. engchi. i Un. v. Nicholas Groombridge and Sheryl Calabro, Integra Lifesciences v. Merck — Good for Research or Just Good for Research Tool Patent Owners?, 22 BIOTECHNOLOGY LAW REPORT 462, 462, 470 (2003). (new startup venture that aims to combine pharmaceutical research, development, and testing, with new discoveries and tools in the sciences). Richard J. Warburg et al., Patentability and Maximum Protection of Intellectual Property in Proteomics and Genomics, 22 BIOTECHNOLOGY LAW REPORT 264, 264 (2003). Id. at 265-66. 9.

(12) According to the National Institutes of Health (NIH), research tools are the full range of resources that scientists use in the laboratory.14 However, the actual definition of a research tool is difficult to pin down and often depends on one’s point of view. Some inventors create research tools incidentally as a means to achieve their research goals. Other inventors view research tools as end products. In many cases, these other inventors invest considerable amounts of time and money in the development of their tools with an end goal to profit.15 Research tools are unlike other patented inventions with respect to the difference between the various consumers of the tool and the provider of the research tool. The NIH aptly reported, “[w]hat a user sees as a research tool, a provider may see as a valuable end product for sale to consumers.”16 To scientists, however, the use of research tools should be freely available as necessary to promote the useful arts and sciences. These conflicting perspectives illustrate the difficult issues raised by research tools.. 立. 政治大. ‧ 國. 學. B. The Types of Research Tools and the Marketing Strategy . ‧. There is little dispute that research tools are set apart from mainstream patentable subject matter. In many cases, a research tool is hard to distinguish from natural phenomena. For example, genes or cell lines are considered research tools, but are often merely discoveries made in the lab after trial and error. 17 Research tools can generally be. sit. y. Nat. n. al. er. io. subdivided between specialized research tools and broad spectrum research tools. Specialized research tools tend to have very limited application. They include genes, cell lines, therapeutic compounds, and other known biologics involved in disease pathways that are yet to be understood.18 Broad spectrum research tools include new techniques, databases, instruments and reagents, which are useful in pursuing a wide range of research problems.19 These tools are not incidental to the accomplishment of research goals, but are themselves the direct goal of research and development. Thus, they are expensive to develop. Moreover, they generally have a broad potential market.20 14. 15 16 17. 18. 19 20. Ch. engchi. i Un. v. REPORT OF THE NATIONAL INSTITUTES OF HEALTH (NIH) WORKING GROUP ON RESEARCH TOOLS, available at http://www.nih.gov/news/researchtools, accessed at June 20, 2010, [hereinafter NIH REPORT], at Background. Id. Id. COMM. ON INTELLECTUAL PROP. RIGHTS IN THE KNOWLEDGE-BASED ECON., NAT'L RESEARCH COUNCIL, A PATENT SYSTEM FOR THE 21ST CENTURY 28 (Stephen A. Merrill et al. eds., The National Academies Press 2004), available at http://www.nap.edu/html/patentsystem/0309089107.pdf, accessed at June 20, 2010, [hereinafter PATENT SYSTEM] (most research tools are created simply to facilitate a research objective). NIH REPORT, supra note 14, at Therapeutic Compounds as Research Tools, Biologicals and Drug Targets as Research Tools. Id., at Broad Spectrum Research Tools. Id. 10.

(13) Broad spectrum tools are consequently marketed in various ways. Like other patented inventions, many inventors of broad spectrum research tools attempt to maximize profits by charging a high price of a large up-front sum, royalties and reach-through royalties, or a combination of these for use of the tool.21 The problem with attempts to charge a high premium is that many of the potential customers, including nonprofit and small research entities, which include universities, are often unable to afford the premium.22 Conversely, another strategy is to charge a relatively small yearly subscription fee for the technology, with the hope that it will be widely disseminated. 23 The most prominent example of this strategy is the Cohen-Boyer patents that formed the basis of recombinant DNA research. Under the Cohen-Boyer patents, a license required $10,000 upfront and an additional yearly fee of $10,000.24 However, the success of the Cohen-Boyer licensing stemmed, in part, from its ease of use and the fact that it was the only known technique to conduct recombinant DNA research.25. 立. 政治大. ‧. ‧ 國. 學. Comparing the marketing strategy employed by the Cohen-Boyer patents to the strategy originally employed by Cetus in its license scheme for the Polymerase Chain Reaction (PCR) proves interesting.26 Recognizing the necessity of PCR to the field of molecular biology,. n. al. er. io. sit. y. Nat. Cetus attempted to impose reach-through royalties on all downstream commercial ventures that used PCR. Consequently, the price of the license caused many members of the scientific community to threaten a boycott of PCR.27 Both the Cohen-Boyer strategy and the PCR strategy reaped tremendous profits. However, the example also shows that even scientists will not be held hostage in order to progress their research. Nevertheless, this example illustrates one of the difficult problems that research tools pose. That is, if the Constitution grants patents to “promote the useful arts”,28 should inventors of research tools be able to essentially corner the progress of research by holding out on the transfer of technologies crucial to the development and progress of science?. 21. 22 23 24 25 26 27 28. Ch. engchi. i Un. v. Heather Hamme Ramirez, Comment, Defending The Privatization of Research Tools: An Examination of the “Tragedy of the Anticommons” in Biotechnology Research and Development, 53 EMORY LAW JOURNAL 359, 374-78 (2004). NIH REPORT, supra note 14, at Broad Spectrum Research Tools. Ramirez, supra note 21, at 374-76. Id. at 375. Id. at 374-376. Id. at 376-378. Id. at 376-377. U.S. Constitution, Article 1, Section 8, Clause 8 (To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries). 11.

(14) C. Concerns and Problems on Research Tools As biotechnology is rapidly growing, patents have been used to protect developments and commercial possibilities and potentials arising from genetic research.29 Research tools pose unique problems from the perspective of public policy. In addition to potentially restricting the flow of science, some schools of thought do not consider research tools as patentable subject matter. Other problems arise from the interaction between private suppliers and users of research tools on one hand, and not-for-profit, budget-conscious institutions, such as universities, on the other hand. These problems generally stem from the variation in the perceived value of the research tools. The interaction between private entities and not-for-profit institutions is particularly difficult because the research goals of each respective party are motivated in different ways.30 The private firms, naturally, are profit motivated. Thus, when they supply the research tool, they seek to maximize profits. Likewise, the aim of their research is also profit motivated. Consequently, their research and development is geared for commercial exploitation. This causes research tool providers to attempt to leverage their tools in order to collect royalties not only on the tools, but also on downstream inventions.31 Ironically, when. 立. 政治大. ‧. ‧ 國. 學. universities attempt to leverage their research tools, private entities object, especially where the development of the research tool was sponsored using federal funds.32. sit. y. Nat. n. al. er. io. On the other hand, the goal of non-profit research is to further the knowledge of mankind. Non-profit research is often sponsored by the government or other charitable entities and consequently has limited budgets. This results in a more budget-conscious mindset, which often makes the acquisition of a research tool impossible, especially where the tool owner is trying to leverage the tool to maximize potential profits. Nevertheless, when non-profit entities are the source of the tool, as opposed to the users, they act just as "unscrupulously" as members of private industry. Like private industry, they seek to maximize their profits on the research tool by charging costly premiums to users. This leaves many private firms frustrated by the double standard. 33 Nevertheless, these sorts of behaviors may stem from the tendency of research tool owners to overestimate the value of the tools.. 29. 30 31. 32 33. Ch. engchi. i Un. v. NUFFIELD COUNCIL ON BIOETHICS, The Ethics of Patenting DNA — A Discussion Paper 3 (July 23, 2002), available at http://www.nuffieldbioethics.org/go/ourwork/patentingdna/publication_310.html, accessed at June 20, 2010. NIH REPORT, supra note 14, at Competing Interests at Stake. Ramirez, supra note 21, at 374-378 (comparing strategies employed in the Cohen-Boyer patents, which originated at a university, and the PCR patents, which were developed by a private company). NIH REPORT, supra note 14, at Importing Research Tools from Universities. Id. at Private Firms. 12.

(15) The reason why inventors of research tools tend to overestimate the value of their tools is difficult to ascertain.34 This phenomenon may result partly from the differences in the perception of the tools' value between the suppliers, who are more likely to view their tools as an end product, and the end users, who typically view them as a means to an end. Additionally, research tool owners may see their tools as the keystone to downstream inventions. Thus, they may feel a right to reap the rewards of commercially successful inventions based on the "but for me ..." logic, especially when the downstream invention carries an enormous price tag for development or the potential for enormous profits.35 Similarly, as previously noted, the reason suppliers may see their invention as more valuable than it is stems from the fact that their invention may make science more efficient and, in some cases, possible.36. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 34. 35 36. Ch. engchi. i Un. v. PATENT SYSTEM, supra note 17, at 71 (universities may overvalue their research tools just as private companies or government entities do). Id. (a research tool holder may insist on reach-through rights or downstream royalties). For example, the Cohen-Boyer patents and PCR made recombinant DNA research possible. 13.

(16) III. Legislative Problems of § 271(e)(1) for Research Tool Patents When Congress passed the Hatch-Waxman Act, there was no way to anticipate the research tool patent problem. The problem arose from the combination of three factors. First, Congress did a poor job drafting § 271(e)(1). Second, biotechnology, still in its infancy in 1984, has grown tremendously. Third, the importance of intellectual property is more prominent today than in 1984. Congress did a poor job drafting § 271(e)(1). Justice Scalia stated, “No interpretation we have been able to imagine can transform § 271(e)(1) into an elegant piece of statutory draftsmanship.”37 Section 271(e)(1) reads:. 政治大. It shall not be an act of infringement to make, use, offer to sell, or sell within the United States a patented invention . . . 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 ...38. 立. ‧. ‧ 國. 學. er. io. sit. y. Nat. Congress wrote few restrictions into the language “patented invention.” In 1988, it amended the scope slightly to exclude certain animal drugs and veterinary biological products created using biotechnology tools.39 The term “patented invention” applies to any patented invention that can qualify under the “reasonably related” standard. Congress restricted the application of § 271(e)(1) to uses “reasonably related” to submission for FDA approval under federal laws that regulate drugs, but gave no additional guidance as to whether the federal laws referred to were a statutory scheme regulating drugs, such as the Food, Drug, and Cosmetic Act,40 or specific sections of federal statutes relating to drugs. As viewed in its plainest language, § 271(e)(1) applies to any patented invention used to develop and submit information pursuant to FDA approval. Thus, Congress inadvertently created the research tool patent problem.. n. al. Ch. engchi. i Un. v. The research tool patent problem is increasingly troublesome in an era where the value of intellectual property takes increasing prominence in companies’ portfolios.41 In 1984, the potential interference to the rights of research tools patents posed by § 271(e)(1) likely did 37 38 39. 40 41. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 679 (1990). 35 U.S.C. § 271(e)(1). Generic Animal Drug and Patent Term Restoration Act, PUBLIC LAW No. 100-670, § 201(i)(2)(A), 102 Stat. 3971 (1988) (codified in 35 U.S.C. § 271(e)(1)). Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 321-399 (1984). Warburg et al., supra note 12, at 264-66. 14.

(17) not affect the value of the patent. Since 1984, many new inventions can be directly used to develop information pursuant to FDA approval of drugs and devices.42 The impact resulting from the rapid growth of biotechnology tools may no longer be easily written off as de minimis. Patent holders are more aware today of the value of their patents, and they are not eager to forego remuneration of the use of their patents by deep pockets, especially those of the pharmaceutical industry. In order to appreciate the various facets of the research tool patent problem, we place the legislative history at section A and study the case law in order to make sense of whether research tools should qualify under the safe harbor of § 271(e)(1) at section B. For the selected cases, the court decisions of Integra v. Merck case are valuable for further discussed at section C. The research exemption in patent law is denoted at section D. Then we focus on the scope of § 271(e)(1) for patented research tools at section E. The legislative proposals are suggested at section F. At the end of this chapter, we concluded some outlooks of research tools at section G.. A. Introduction of Safe Harbor of § 271(e)(1) . 學. ‧ 國. 立. 政治大. ‧. io. sit. y. Nat. With respect to the history of the Safe Harbor, four aspects which are pharmaceuticals before Hatch-Waxman, the status of pharmaceutical industrials before Hatch-Waxman Act, drug price competition, and patent term restoration act will be discussed in this section.. n. al. er. 1. The Status of Pharmaceutical Industrials before Hatch-Waxman Act.. iv n C U pioneer the h Hatch-Waxman e n g c h i Act,. Prior to the passage of drugs dominated the marketplace. The pioneer drugs enjoyed seventeen years of exclusivity by virtue of their patents. Additionally, FDA regulations both hurt and helped the period of market exclusivity for pioneer drugs. On one hand, safety and efficacy testing took a pharmaceutical manufacturer from five to ten years to complete. Until the manufacturer completed this testing, the FDA would not approve their New Drug Application (NDA). During the time taken to complete the FDA approval process for an NDA, the useful life of a patent continued to diminish.43 Thus, it took anywhere from seven to ten years after the issuance of the patent before it could be marketed and sold publicly, reducing the useful patent life on the drug accordingly. In 1984, a novel drug therefore enjoyed around seven to ten years of market exclusivity.44 42 43. 44. NIH REPORT, supra note 14. Elizabeth Stotland Weiswasser & Scott D. Danzis, The Hatch-Waxman Act: History, Structure, and Legacy, 71 ANTITRUST LAW JOURNAL 585 (2003). 35 U.S.C. § 154, Contents and term of patent; provisional rights. (a patent grants “to the patentee ... for the 15.

(18) On the other hand, prior to the passage of Hatch-Waxman, novel drugs often recovered the market exclusivity lost in the approval process. In most cases, while the generic drug awaited approval for its NDA, the pioneer drug enjoyed a de facto term extension.45 In effect, the novel drug manufacturer recovered an equivalent exclusivity period for time lost during the new drug approval process. Although there were a handful of generic drug manufacturers before the passage of Hatch-Waxman, the NDA requirement on a generic version of a drug made it difficult for generic pharmaceutical manufacturers to successfully bring a generic drug to market. Because of the cost of an NDA and the length of time necessary to prove safety and efficacy of the generic version of the drug, bringing generic versions to market was, in most cases, cost-prohibitive.46 In fact, in 1984, there were almost 150 commercially viable, unpatented drugs without a generic counterpart.47 Today, nearly three-quarters of drugs listed in the FDA Orange Book have a generic counterpart, which accounted for over 50% of all prescriptions distributed in the United States.48. 立. 政治大. ‧ 國. 學. ‧. The public suffered the greatest harm arising from the drug market prior to the passage of the Hatch-Waxman Act. The government, and thus taxpayers, bought large numbers of drugs under prescription plans for government employees and military personnel. Because of the lack of serious competition in the market-place, drugs were more expensive across the board, even in instances where generic drugs were available.49 The higher costs associated with drugs prior to passage of the Hatch-Waxman Act cost the public more in taxes, more in insurance premiums, and more for the drugs themselves.. er. io. sit. y. Nat. al. n. iv n C U government and the public as a Congress estimated tremendous hsavings e n gtocboth h i the. result of the Hatch-Waxman Act. One estimate suggested that consumers would save over one billion dollars by making generic drugs more accessible. 50 For example, in 1984 government prescription plans saved 1.2 million dollars per year buying generic metronidazole. Indeed, Congress estimated a savings of 50% over the cost of brand name drugs if they could make generic versions of the drugs more accessible.51 Congress designed. 45 46 47. 48. 49. 50. 51. term of seventeen years ... the right to exclude others from making, using, or selling the invention....”) Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 670 (1990). Weiswasser & Danzis, supra note 43, at 588-90. The World Drug Situation, available at http://whqlibdoc.who.int/publications/1988/9241561149_(part1).pdf, accessed at June 20, 2010. Generic Pharmaceutical Association, Generic Pharmaceutical Facts at a Glance, available at http://www.gphaonline.org/about-gpha/about-generics/facts, accessed at June 20, 2010. Weiswasser & Danzis, supra note 43, at 588-90 (noting the situation of generic drugs prior to Hatch-Waxman). Medicare Prescription Drug Coverage , WHITE HOUSE OFFICE OF COMMUNICATIONS (2006), available at http://www2.ed.gov/parents/needs/speced/medicare/fact-sheet.pdf, accessed at June 20, 2010. Id. 16.

(19) the Hatch-Waxman Act to provide incentives for generic drug manufacturers to bring more generic drugs to market, which in turn benefited the pocket books of consumers and saved the government millions of dollars per year. 2. The Competition of Drug Price and Patent Term Restoration Act In 1984 Congress enacted the Drug Price Competition and Patent Term Restoration Act, known more commonly as the Hatch-Waxman Act.52 The Hatch-Waxman Act is a broad compromise between the pioneer pharmaceutical companies, generic pharmaceutical companies, and the public. Pioneer pharmaceutical companies got a statutory patent term extension for up to five years in order to restore market exclusivity lost to the FDA approval process.53 Generic drug companies benefited from the Hatch-Waxman Act in the form of a major revision to the Food, Drug, and Cosmetic Act (FDCA).54 Instead of requiring an NDA for generic versions of previously approved drugs, Congress made the Abbreviated New Drug Application (ANDA) process available to generic manufacturers, 55 which was available only to drugs approved by the FDA prior to 1962, and thus prior to the Hatch-Waxman Act.56 Generic drug companies also benefited from the inclusion of the. 立. 政治大. ‧ 國. 學. Bolar Amendment, which provided a safe harbor for otherwise infringing activities pursuant to FDA approval of generic drugs.57. ‧. n. al. er. io. sit. y. Nat. In April of 1984, the Federal Circuit decided Roche Products, Inc. v. Bolar Pharmaceutical Co.58 Roche held that a generic drug manufacturer’s testing of generic versions of patented drugs infringed the patents of pioneer drugs. The court held that Bolar’s activities infringed because they were not protected by the common law research exemption, and were not de minimis uses of the patent. 59 From the perspective of the pioneer pharmaceutical companies, Roche reinforced the novel drug's de facto term extension while the generic drug equivalents awaited FDA approval of their NDA.60. Ch. engchi. i Un. v. The House of Representatives responded to Roche as a natural extension of the principles embodied in the Hatch-Waxman Act.61 As part of the Hatch-Waxman Act's 52 53. 54 55. 56 57 58 59 60 61. Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585. 35 U.S.C. § 156 (2000), Extension of patent term, available at http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_156.htm, accessed at June 20, 2010. Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 321, 331-337, 341-364, 371-379, 381-384, 391-399 (1984). Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, § 101, 98 Stat. 1585, 1585-97. Weiswasser & Danzis, supra note 43, at 588-90. Id. at 604-06. 733 F.2d 858 (Fed. Cir. 1984). Id. at 863. Weiswasser & Danzis, supra note 43, at 586-89, 605. The Bolar Amendment was not part of the original compromise between pioneer drug companies and generic drug companies. Weiswasser & Danzis, supra note 43, at 605. 17.

(20) benefit to generic drug companies, they received an exemption from patent infringement on the novel drug counterpart, provided that the use of the patent developed information that would reasonably lead to pre-expiration FDA approval of a generic version of a drug.62 This facilitated availability of generic drugs immediately upon the expiration of the patent on the pioneer drug. In light of the changes to the patent statute, the Hatch-Waxman Act also modified the FDCA to give pioneer drug companies the ability to resolve patent disputes prior to the generic entry into the market. The Hatch-Waxman Act included a provision, which requires pioneer drug companies to submit patent information on novel drugs to the FDA. The FDA lists these patents in a publication entitled “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the Orange Book.63 Generic manufacturers, in addition to their ANDA, must certify the patents listed in the Orange Book upon which they rely in order to show bioequivalence.64. 立. 政治大. ‧. ‧ 國. 學. Finally, the Hatch-Waxman Act benefited the public through increased competition in the marketplace, which resulted in lower consumer costs for drugs and insurance. Additionally, generic drugs were available immediately upon expiration of the relevant patents. Indeed, the Hatch-Waxman Act effectively removed bathers to generic drugs in the marketplace, while still retaining sufficient incentives to pioneer drug manufacturers to develop new and useful drugs.. al. er. io. sit. y. Nat B. Judicial Interpretations . n. iv n C U consistently inconsistent in their h e nthe Since the passage of Hatch-Waxman, h i are g ccourts. interpretations of § 271(e)(1), thereby withholding from the legal community a vehicle to predict how problems such as the research tool patent problem should be resolved. Indeed, outcomes in the courts with respect to § 271(e)(1) are unpredictable, with inconsistent holdings and dicta from case to case and court to court, and even opinions, which in light of today's technology, are logically invalid.65 Until recently, the general trend expanded the scope of the Hatch-Waxman Act.66 With respect to the application of § 271(e)(1) to patented 62 63 64. 65. 66. 35 U.S.C. § 271(e)(1), Infringement of patent. Weiswasser & Danzis, supra note 43, at 599. § 355(b)(2)(A) (requiring that a generic manufacturer certify that a drug is either not patented, based on an expired patent, patented, or based on a patent that is invalid). Certifications with respect to patent invalidity cause significant controversy that can lead to litigation. Weiswasser & Danzis, supra note 43, at 600. AbTox, Inc. v. Exitron Corp., 122 F.3d 1019, 1029 (Fed. Cir. 1997) (showing the holdings of Eli Lilly to be inconsistent with each other in light of application to Class I and II medical devices). See also Intermedics, Inc. v. Ventritex, Inc., 775 F. Supp 1269 (N.D. Cal. 1991), aff'd, 991 F.2d 808 (Fed. Cir. 1993); Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003), vacated, 545 U.S. 193 (2005). Paul Fehlner, Not Such a Safe Harbor After All, 10 No. 6 ANDREWS INTELLECTUAL PROPERTY 18.

(21) research tools, five cases address the topic directly, and all have slightly different applications of § 271(e)(1). 1. Eli Lilly & Co. v. Medtronic, Inc. The first case addressing the problems arising from § 271(e)(1) was Eli Lilly & Co. v. Medtronic, Inc.67 The Supreme Court grappled with the problem of whether the language of § 271(e)(1) applied to a cardiac defibrillator, a Class III medical device.68 Like drugs, the FDA requires that Class III medical devices undergo safety and efficacy testing prior to marketing. 69 Although § 271(e)(1) broadly applies to the term “patented invention,” Congress narrowed it with respect to the scope of its applicability by requiring that the use be “reasonably related to the development and submission of information under a federal law which regulates the manufacture, use, or sale of drugs. ...”70 The Supreme Court held that a Class III medical device was considered a “patented invention” because it met the requirement that it be pursuant to FDA approval under a federal statute regulating drugs.71. 立. 政治大. ‧ 國. 學. The Supreme Court came to this conclusion based on the “patented invention” standard. The Court held that the issue turned on the meaning of the term “Federal law” in the statutory language, not the term “drug.”72 Justice Scalia wrote for the Court that § 271(e)(1). ‧. “more naturally summons up the image of an entire statutory scheme. ...”73 Thus, the scope of § 271(e)(1) applies not only to drugs, but potentially to any invention, provided its use is related to a requirement imposed under a federal law related to drugs.74. er. io. sit. y. Nat. The Supreme Court also addressed the “symmetry principle” inherent in the Hatch-Waxman Act. The symmetry principle requires that the “patented invention” of § 271(e)(1) be an invention eligible for term extension under 35 U.S.C. § 156.75 The Court held that § 156 and § 271(e) are meant “generally to be complementary.”76 Thus, the Court. n. al. 67 68 69 70 71 72 73 74. 75 76. Ch. engchi. i Un. v. LITIGATION REPORTER 18 (July 22, 2003) (the Hatch-Waxman Act has been construed broadly to include medical devices and experiments). Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990). Id. at 664. 21 U.S.C. § 355 (2003). 35 U.S.C. § 271(e)(1). Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 666 (1990). Id. at 666-667. Id. at 666. Id. at 666-670. Justice Scalia pointed out that there were two possible ways of reading this statute. First, it could be viewed as referring to any “statutory scheme of regulation” that included as one of its components drugs, or conversely, that it could be read to apply to sections of federal statutes dealing with drugs. The Court suggested that if Congress intended § 271(e)(1) to read as only those sections of federal statutes dealing with drugs, the statutory language more naturally would have read, “It shall not be an act of infringement to make, use, or sell a . . . patented invention for [a] drug product, drug composition, or drug use.” Id. at 669-70. Id. at 673. 19.

(22) suggested that if a device is not eligible for term extension, then the safe harbor of § 271(e)(1) should not apply either.77 Despite the Supreme Court’s good intentions with respect to the so-called symmetry principle, later cases show that symmetry is not compatible with a broad application of the term “patented invention” in § 271(e)(1) that extends the safe harbor to all medical devices, including Class I or Class II medical devices. 2. Intermedics, Inc. v. Ventritex, Inc. Intermedics, a Northern District of California case affirmed by the Federal Circuit, addressed the question of intent in the application of § 271(e)(1).78 Here, the court refused to subjectively consider specific uses for which the § 271(e)(1) exemption was granted.79 Rather, the court held that Congress intended the test for determining whether § 271(e)(1) applies to be an objective test, “focusing on conduct rather than motive or ultimate aim.”80 To that end, the court set out the relevant factors to test whether a particular use is reasonably related to the pursuit of FDA approval:. 立. 政治大. ‧. ‧ 國. 學. [W]ould it have been reasonable, objectively, for [the allegedly infringing] party to believe that there was a decent prospect that the ‘use’ in question would contribute (relatively directly) to the generation of kinds of information that was likely to be relevant in the processes by which the FDA would decide whether to approve the product?81. sit. y. Nat. n. al. er. io. This test allows all patents the benefit of § 271(e)(1), provided the uses are “reasonably related.” Even ancillary uses are permitted if reasonably related to FDA approval under Intermedics.82. Ch. 3. AbTox, Inc. v. Exitron Corp.. engchi. i Un. v. AbTox extended Eli Lilly to Class I and Class II medical devices.83 The Federal Circuit resolved the issue of whether medical devices, which were not eligible for term extensions under § 156(a),84 enjoyed the protection of the safe harbor of § 271(e)(1).85 The Federal Circuit decided between the two disparate holdings in Eli Lilly: whether § 271(e)(1) applied as part of an entire statutory scheme of regulation, or whether § 271(e)(1) required 77 78 79 80 81 82 83 84 85. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 671-673 (1990). Intermedics, Inc. v. Ventritex, Inc., 775 F. Supp. 1269 (N.D. Cal. 1991), aff'd, 991 F.2d 808 (Fed. Cir. 1993). Id. at 1278. Id. Id. at 1280. Id. AbTox, Inc. v. Exitron Corp., 122 F.3d 1019, 1029 (Fed. Cir. 1997). 35 U.S.C. § 156(a)(4) (2000), Extension of patent term. AbTox, Inc. v. Exitron Corp., 122 F.3d 1019, 1028-1029 (Fed. Cir. 1997). 20.

(23) symmetry.86 The court noted that the FDA did not require pre-marketing approval for Class I and Class II medical devices. Thus, these devices were not eligible for term extensions under § 156(a). The Federal Circuit held, “Ultimately, this court must follow the Supreme Court's broader holding, which remains in force despite a potential conflict with its own narrower reasoning . . . the Supreme Court commands that statutory symmetry is preferable but not required.” 87 Consequently, under § 271(e)(1), otherwise infringing acts need only be reasonably related to FDA approval to be entitled to the safe harbor.88 4. Infigen, Inc. v. Advanced Cell Technology, Inc. Infigen was a decision that cut against the precedent of the Federal Circuit with respect to § 271(e)(1).89 In Infigen, the Western District Court of Wisconsin opined that the only patents to which § 271(e)(1) applies to were those which qualified for the term extension in § 156(f).90 However, food and color additives are not eligible for term extensions, because they are not subject to a stringent pre-market approval process as required under § 156(a), though they are technically listed in § 156(f) as being eligible for term extension. Thus, the holding of Infigen is somewhat contradictory. On one hand, the court asserted that the safe harbor in § 271(e)(1) is available for all products defined in § 156(f).91 On the other hand,. 立. 政治大. ‧ 國. 學. ‧. not all products defined in § 156(f) as eligible to receive term extensions may actually receive a term extension because of the regulatory review requirement of § 156(a). Thus, the Infigen court broke from earlier holdings of the Federal Circuit that rejected symmetry between § 156 and the safe harbor in § 271(e)(1).. n. er. io. sit. y. Nat. al. C. Integra Lifesciences I, Ltd. v. Merck KGaA . Ch. engchi. i Un. v. Integra is the most recent important case interpreting § 271(e)(1). Starting from Integra Lifesciences I, Ltd. v. Merck KGaA92 in 2003, the Supreme Court’s subsequent reversal93 in 2005, and the issued opinion on remand94 in 2007, this will be discussed at this section. It is unfortunate that the scope of § 271(e)(1) with respect to the use of research tools mentioned at this case is still unclear.. 86 87 88 89 90 91 92 93 94. Id. at 1027-30. Id. at 1029. Id. at 1030. Infigen, Inc. v. Advanced Cell Tech., Inc., 65 F. Supp. 2d 967 (W.D. Wis. 1999). Id. at 980. Infigen, 65 F. Supp. 2d at 980. Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003). Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005). Integra Lifesciences I, Ltd v. Merck KGaA, 496 F.3d 1334 (Fed. Cir. 2007). 21.

(24) 1. Progress of Integra Lifesciences I, Ltd. v. Merck KGaA Integra is the most recent important case interpreting § 271(e)(1).95 On July 18, 1996, Integra filed a complaint against Merck for patent infringement in the Southern District of California. Integra owns five patents related to a short tri-peptide known as an RGD peptide.96 These peptides are known to bind to αυβ3 receptors on the surface of cells.97 A researcher at Scripps Research Institute (Scripps) discovered that blocking these αυβ3 receptors could have therapeutic uses in inhibiting tumor growth.98 Following this discovery, Merck KGaA (Merck) entered into an agreement with Scripps to fund “the necessary experiments to satisfy the biological bases and regulatory (FDA) requirements for the implementation of clinical trials” using a certain cyclic RGD peptide developed at Scripps, or derivatives thereof. 99 A derivative of this peptide was later chosen for clinical development. In its case before the Southern District of California, Integra asserted that the agreement between Merck and Scripps was commercial in nature and that research conducted pursuant to that agreement was an infringement of its patents. After trial, a jury found Merck liable for the infringement of four of Integra's patents.100. 立. 政治大. ‧ 國. 學. ‧. Merck appealed to the Federal Circuit from the jury’s verdict of infringement. The company asserted that the district court had erroneously interpreted § 271(e)(l).101 In its review of the lower court’s interpretation of the statute, the Federal Circuit announced that the term “solely” limits the safe harbor exemption from extending beyond uses of patented inventions that are reasonably related to those specified in § 271(e)(1).102 The court further. er. io. sit. y. Nat. 95. Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003), vacated, 545 U.S. 193 (2005). U.S. Patent No. 5,695,997 (issued Dec. 9, 1997); U.S. Patent No. 4,988,621 (issued Jan. 29, 1991); U.S Patent No. 4,879,237 (issued Nov. 7, 1989); U.S Patent No. 4,792,525 (issued Dec. 20. 1988); U.S Patent No. 4,789,734 (issued Dec. 6, 1988). 97 Integra Lifesciences I, Ltd. v. Merck KGaA, RGD peptides are a short tri-peptide segment of fibronectin (an adhesive protein) having the amino acid sequence Arg-Gly-Asp (in single-letter notation, RGD). The RGD peptide sequence promotes beneficial cell adhesion by interacting with αυβ3 receptors on cell surface proteins called integrins. Id. 98 Id. at 863. 99 Id. Merck KGaA began funding research at Scripps in 1988 when Dr. Cheresh, a researcher at Scripps, identified a monoclonal antibody that had activity as an inhibitor of integrin activity. Id. The collaboration was enlarged in 1995 when Dr. Cheresh discovered that a Merck-provided peptide, having the sequence c(RGDfV), inhibits new blood vessel growth by interaction with a specific integrin. Id. In this collaboration, cyclic RGD peptides were synthesized and studied. Id. It was found that some cyclic RGD peptides have anti-angiogenic properties, of interest for the treatment of a host of diseases, including cancer, macular degeneration, and rheumatoid arthritis. Id. "Angiogenic" refers to the process of generating new blood vessels, a process essential to tumor growth. Id. The purpose of the collaborative research was to (1) assess the potential efficacy of the peptides as therapeutic agents; (2) discover the mechanism of the action of the peptides; and (3) shed light on the histopathology, toxicology, circulation, diffusion, and half-life of the peptides in the blood stream. Id. The ultimate goal of the research was to find a product that would be sufficiently effective in the treatment of angiogenic disease that could be developed and brought to market. Id. at 873-874. 100 Id. at 863-864. 101 Id. 102 Id. at 866. Section 271(e)(1) allows exemption from infringement for patented inventions "solely for uses reasonably related to the development and submission of information under a Federal law which regulates ... 22. al. n. 96. Ch. engchi. i Un. v.

(25) explained that the limitation created by the term “solely” was essential because “activities that do not directly produce information for the FDA are already straining the relationship to the central purpose of the safe harbor.”103 The safe harbor's central purpose was explained as an express objective to facilitate the immediate entry of generic drugs into the marketplace. The court thus held that “[t]he safe harbor does not reach any exploratory research that may rationally form a predicate for future FDA clinical tests.”104 Two rationales support the court’s holding. First, the court noted that the FDA has no interest in the general “hunt” for new drugs.105 Rather, it is concerned with specific drugs for which approval is being sought. Second, the court held that Congress had narrowly tailored the safe harbor in order to ensure only a de minimis impact on patent holders' rights.106 This de minimis impact was protected by limiting safe harbor protection to those activities that are reasonably related to the FDA approval of a drug already on the market. The court therefore concluded that Merck’s activities, which were not related to a drug already on the market, did not fall under the safe harbor.107. 立. 政治大. ‧ 國. 學. The Federal Circuit held that general research activities used to screen potential drug candidates were not protected by the safe harbor of § 271(e)(1).108 The court also argued. ‧. that if the safe harbor exemption was expanded to include Merck’s activities, it would “effectively vitiate the exclusive rights of patentees owning biotechnology tool patents.”109. y. Nat. sit. n. al. er. io. [E]xpansion of section 271(e)(1) to include [new drug development] activities would effectively vitiate the exclusive rights of patentees owning biotechnology tool patents. After all, patented tools often facilitate general research to identify candidate drugs, as well as downstream safety-related experiments on those new drugs. Because the downstream clinical testing for FDA approval falls within the safe harbor, these patented tools would only supply some commercial benefit to the inventor when applied to general research. Thus, exaggerating section 271(e)(1) out of context would swallow the whole benefit of the Patent Act for some categories of biotechnological inventions. Needless to say, the 1984 Act was meant to reverse the effects of Roche under limited circumstances, not to deprive entire categories of 103 104 105. 106 107 108 109. Ch. engchi. i Un. v. drugs or veterinary biological products." 35 U.S.C. § 271(e)(1). Integra, 331 F.3d at 866. Id. at 866-867. Id. at 866. In using the word "hunt" the court elaborated upon its meaning by saying that "the FDA does not require information about drugs other than the compound featured in an Investigational New Drug application." Id. at 867. Id. Integra, 331 F.3d at 867-868. Id. (explaining that patented tools facilitate general research in identifying and testing the safety of new drugs). 23.

(26) inventions of patent protection.110 By stating that the “downstream clinical testing ... falls within the safe harbor,” the Federal Circuit implied that use of patented research tools is eligible for § 271(e)(1) protection, provided that the research tools are used pursuant to a testing phase of a new drug approval process. Integra directly affirmed and narrowed the scope of the “reasonably related” test111 set forth in Intermedics,112 and, for the first time, directly commented on the status of research tools with respect to the safe harbor. The court explained that many patents cover tools that are used to facilitate general research to identify candidate drugs and to test the safety of those newly identified drugs. The court acknowledged that such tools fall within the safe harbor when used for clinical testing required for FDA approval, yet argued that they would hold little commercial benefit to the patent holder if they fell within the safe harbor when used to support general research. The court then held that if § 271(e)(1) was “exaggerated,” it “would swallow the whole benefit of the Patent Act for some categories of biotechnological inventions.”113. 立. 政治大. ‧ 國. 學. In 2005, the Supreme Court rejected the Federal Circuit’s holding and construed the provision more broadly, but impliedly affirmed the Federal Circuit's stance on symmetry.114. ‧. The Court sided with the Federal Circuit's analysis of Eli Lilly as decided in AbTox, that the plain language trumps any symmetry.115 The Court held that the exception was not limited to tests that generate safety and effectiveness data; rather, it included “any” tests (including basic research on biological mechanisms) that might generate data submitted to the FDA. Addressing the Court’s conclusion116 that the § 271(e)(1) exemption was largely limited to bioequivalency studies, the Supreme Court added, “[t]here 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”.117 Rather, the safe harbor includes within its scope “(1) experimentation on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in. n. er. io. sit. y. Nat. al. 110. 111. 112. 113 114. 115 116 117. Ch. engchi. i Un. v. Id. (emphasis added). Congress added § 271(e)(1) after the main quid pro quo (term extension and changes to the FDCA to make ANDA approval available to generic manufacturers) to take care of the de facto term extension. Intermedics, Inc. v. Ventritex, Inc., 775 F. Supp. 1269, 1280 (N.D. Cal. 1991), aff'd, 991 F.2d 808 (Fed. Cir. 1993) (discussing the reasonably related test). Stephen A. Becker, I PATENT APPLICATIONS HANDBOOK § 3:19 (2005 ed.). “[T]he Federal Circuit held that the exemption is limited to uses reasonably related only to the development and submission of information for FDA safety and effectiveness approval process.” Id. (emphasis added) Id. Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005) (Congress extended § 271(e)(1) protection to "all uses . . . ‘reasonably related’ to [the development of] information f o r submission under a federal law regulating ... drugs"). Id. at 2382-84. Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003). Id. 24.

(27) experiments that are not ultimately submitted to the FDA”.118 While preclinical work need not directly generate information for inclusion in an FDA submission, the Supreme Court held that use of another’s patented invention must still be ‘reasonably related’ to the development and submission of information to the FDA for § 271(e)(1) to apply. According to the Court, a reasonable relationship exists, and the safe harbor applies, “[a]t least where a drug maker 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”.119 The Court’s requirement that the experimentalist at least have a notion of the biological mechanism underlying the drug’s effect appears to be an effort to exclude basic research from the scope of the safe harbor.120. 政治大. The Supreme Court explicitly refrained, however, from addressing whether its expansive reading of § 271(e)(1) might permit drug researchers freedom to use not just patented compounds in their work, but patented research tools as well. Because Integra had not argued that its patented RGD peptides were research tools, the Supreme Court explicitly did not “express a view about whether, or to what extent, § 271(e)(1) exempts from infringement the use of ‘research tools’ in the development of information for the regulatory process”.121 The Supreme Court vacated the Federal Circuit’s decision and remanded the. 立. ‧. ‧ 國. 學. er. io. sit. y. Nat. case to the appeals court for fresh review of the evidentiary record in view of the correct, newly enunciated legal standard. Moreover, the Supreme Court did not comment on the scope of “patented invention” in § 271(e)(1).122 The Court explicitly declined to address the application of the regulatory approval exception to patented research tools, and did not address the scope of the experimental use exception. In a footnote, the Court opined, “We ... do not . . . express a view about whether, or to what extent, [section] 271(e)(1) exempts from infringement the use of ‘research tools’ in the development of information for the regulatory process.”123. n. al. Ch. engchi. i Un. v. The Supreme Court agreed with the Federal Circuit that “basic scientific research on a particular compound, performed without the intent to develop a particular drug or a 118. Id. at 206. Id. at 207. 120 Id. Basic scientific research on a particular compound, performed without the intent to develop a particular drug or a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce, is surely not ‘reasonably related to the development and submission of information’ to the FDA. 121 Id. at 205. 122 Id. at 2382-83. 123 Id. at 2382 n.7. In the Supreme Court’s defense, however, Integra did not argue that the patents in issue covered research tools or that Merck used them as research tools. Id. at 2382-84. Thus, the court did not comment on the applicability of § 271(e)(1) to research tools. 25 119.