Tuesday, December 18, 2007

Patented Research Tools and the 271(e)(1) Exemption

Proveris Scientific v. Innovasystems, (Civ. No. 05-12424 (D. Mass.)) a case pending before the Federal Circuit involving a "spray data acquisition system" used to test perfumes and nasal sprays, provides the court with an opportunity to clarify the applicability of the 271(e)(1) research use exemption to research tools. 271(e)(1) states in relevant part that “[i]t shall not be an act of infringement to . . . offer to sell, or sell . . . 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 or veterinary biological products.” Innova, the alleged infringer, argues that the device is intended solely for use in generating data as required under the FDCA and is only sold to pharmaceutical companies or FDA, and thus falls squarely within a plain reading of the statute.

The patent owner (Proveris) argues that 271(e)(1) does not encompass laboratory equipment, but is limited to what it refers to as “products” – drugs, medical devices, food additives and color additives regulated under the FDCA. In the alternative, Proveris argues that Innova does not fall within the exemption because it is not generating data for submission to FDA, but rather selling equipment used by others to generate such data. The district court sided with Proveris, and ruled that a machine is not a “patented invention” within the meaning of the statute, denying Innova recourse to the 271(e)(1) exemption as a matter of law.

Congress enacted 271(e)(1) primarily for the purpose of exempting generic drug companies from infringement liability for testing a patented drug prior to patent expiration for the purpose of generating the data necessary for FDA approval, but the language is much broader, and the courts have interpreted the statute as covering more than just patented drug candidates. For example, in Medtronic the Supreme Court held that the exemption encompasses medical devices, and in Merck the Court indicated that 271(e)(1) potentially reaches any invention used in the generation of data which might reasonably be appropriate for FDA submission. The Merck decision specifically refrained from deciding whether 271(e)(1) applied to “research tools,” but later in Classen the Maryland District Court held that 271(e)(1) (as interpreted in Merck) does apply to at least some research tools (in that case a computer-implemented system for analyzing adverse event data).

Innova seems to be correct in arguing that a plain reading of the statute would encompass the sale of a device that is only used for preparing data for FDA submission. But if the Federal Circuit agrees it would raise some interesting line drawing questions. Would it be enough if the device is predominantly used for generating data for FDA submission, even if it has some other minor R&D applications (the Proveris patent states that the invention is useful for R&D as well as generating data for FDA). Merck provides little guidance as to where in the process of going from early stage drug discovery to clinical trials the 271(e)(1) exemption kicks in. Would the courts adopt a standard similar to 271(c), where liability would depend upon whether the device has a “substantial non-exempt” use? In a case where a device can be used for both basic research and for generating data for FDA submission, could a seller of the device fall under the exemption by notifying its customers that they are only authorized to use the device for activities reasonably related to generating data for FDA? If FDA requires a certain type of test to secure marketing approval, could someone patent the test (or a device necessary for performing the test), and hence block competitors from securing approval of a non-patented product? (I don’t know how feasible that would be in practice, but it is essentially one of the arguments raised by Innova.)

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