Research Exemption

The US research exemption has two components: a narrow common law exception and the broader statutory Bolar exemption: COMMON LAW EXPERIMENTAL USE EXCEPTION: origin: Whittemore v. Cutter (1813); Justice Story suggested that making a patented invention 'for the purpose of philosophical experiment' alone, without intent to use for profit, did not constitute infringement; MADEY v. DUKE UNIVERSITY (Fed. Cir. 2002): Duke University used patented free-electron lasers in its research laboratory; the Court held the experimental use exception is limited to experiments 'for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry'; ANY use that advances the institution's legitimate business objectives is NOT exempt; university research serves business objectives: advancing the institution's reputation; securing grant funding; educating students; generating faculty scholarship; therefore university research is NOT protected by the common law exception even if nonprofit; PRACTICAL EFFECT: the common law exception is essentially dead in the US for any real research activity; commercial labs, universities, research hospitals — none have a meaningful common law research exception; the exception might protect an individual hobbyist experimenting for personal curiosity with no commercial nexus; STATUTORY BOLAR EXEMPTION (§ 271(e)(1)): covers activities solely reasonably related to FDA regulatory submissions; a significant research carve-out for pharmaceutical, device, and biologics research; see the Bolar Exemption guide for detailed scope; DIFFERENCE: common law = no commercial purpose; Bolar = regulatory submission purpose; both have specific and limited scope; neither protects general academic or commercial research using patented tools.

European countries provide significantly broader research exemptions than the US: EUROPEAN PATENT CONVENTION (EPC) ARTICLE 27(b): acts done for experimental purposes relating to the subject matter of the invention shall not be infringement; EPC Rule 29(2): the experimental use exception applies to all EPC contracting states; GERMAN PATENT ACT (§ 11 No. 2): acts performed for experimental purposes relating to the subject matter of the patented invention are not infringement; KEY DISTINCTION: experiments 'on' the patent vs. experiments 'with' the patent; experiments ON the invention (to understand how it works, to test it, to develop improvements): EXEMPT; experiments WITH the invention (using a patented tool to research something unrelated): NOT exempt; GERMAN CASE LAW: clinical trials using patented drugs to test new indications = experiments ON the invention = exempt; using a patented DNA probe to search for genes = using the probe as a tool (experiments WITH, not ON) = potentially infringing; UK PATENTS ACT § 60(5)(b): acts done for experimental purposes relating to the subject matter of the invention; similar to German scope; research to understand or improve the patented invention: exempt; commercial research using patented tools for unrelated research: not clearly exempt; FRANCE: Code de la Propriété Intellectuelle, Article L. 613-5: experimental acts; specific regulatory exemption also included; NETHERLANDS, BELGIUM, SWEDEN, OTHERS: similar experimental use exemptions implemented nationally; SCOPE NUANCE: the 'subject matter of the invention' limitation is key; courts in Germany and UK distinguish between experiments on vs. with; a patented antibody used as a research tool in cancer screening (research WITH the antibody) may not be exempt even in Europe.

Asian patent systems have implemented research exemptions with varying scope: JAPAN: Patent Act Article 69(1): 'The effects of the patent right shall not extend to the working of the patent right for experimental or research purposes'; the Japanese research exemption is broader in wording than the US common law exception; SCOPE IN JAPAN: commercial research at pharmaceutical companies has been found to fall within the exemption; academic and nonprofit research: clearly exempt; purely profit-motivated research without a discovery/science purpose: potentially not exempt; key issue: Japan's courts have not definitively resolved whether commercial preclinical drug development (similar to what Madey addressed in the US) is fully exempt; CHINA: Patent Law Article 69(4): acts specifically for the purpose of scientific research and experimentation; does not extend to acts for commercial production; Chinese courts are still developing this area; commercial drug development research involving patented compounds is complex; SOUTH KOREA: similar research exemption in Patent Act Article 96(1); experimental and research purposes exempted; INDIA: Patents Act Section 107A(a): research or research related activities do not infringe; INDIA'S APPROACH: broadest of the major Asian systems; India's research exemption is explicit and codified; commercial research for regulatory submissions (Bolar equivalent) is separately addressed in Section 107A(b); combined effect: India has both a broad research exemption AND a broad Bolar-equivalent; TAIWAN: Patent Act Article 59: acts done for experimental or research purposes are not infringement; SINGAPORE: Patents Act Section 66(2)(b): acts done for experimental purposes relating to the subject matter of the invention; similar to UK/EPC standard.

Research exemptions shape how universities interact with patent holders and how they commercialize their own IP: UNIVERSITY PATENTING AFTER BAYH-DOLE: the Bayh-Dole Act (1980) enabled universities to own patents on federally funded inventions; universities now actively patent and license research results; major research universities (MIT, Stanford, Caltech) generate significant licensing revenue; this shift made universities patent holders as well as patent users — creating tension; PATENT RIGHTS FOR RESEARCH TOOLS: many basic research tools (cell lines, genetic sequences, antibodies, fluorescent proteins) are patented; universities often need these tools for further research; IN THE US: no research exemption protects universities from infringing these patents; the common law exception (post-Madey) does not help; options: license the tool; pay the license fee; design around the patent; THE CLEARING HOUSE PROBLEM: thousands of research tools used in a single research project may all be separately patented; obtaining licenses for all would be prohibitively expensive; in practice: most tool patent holders do not enforce against academic research (enforcement costs exceed revenue; reputational damage); some grant royalty-free licenses to nonprofits (e.g., academic use licenses); COMPULSORY LICENSING PRESSURE: if universities cannot access basic research tools due to patent blocking, there is policy pressure for compulsory licenses; US law does not provide for compulsory licenses of research tools; other countries use their broader research exemptions to avoid this problem; MARCH-IN RIGHTS (BAYH-DOLE § 203): the federal government has limited march-in rights for federally funded inventions not being adequately utilized; in practice, march-in rights have never been exercised; ACADEMIC LICENSING STRUCTURES: university tech transfer offices routinely include non-exclusive academic/research use licenses in their commercial licenses; these allow academic researchers to use the commercialized technology for research purposes; bridges the gap created by the narrow US research exemption.

The proliferation of research tool patents creates specific challenges for scientific progress: RESEARCH TOOL PATENTS: a research tool is a patented composition, device, or method used in research but not itself the end product; examples: PCR (Cetus/Roche) — fundamental to modern molecular biology; GFP (green fluorescent protein — Chalfie, Tsien, Shimomura); CRISPR-Cas9 (Broad/UC Berkeley) — multiple overlapping patents; specific antibodies; transgenic animal models (Harvard oncomouse); ANTI-COMMONS THEORY (Heller & Eisenberg, Science 1998): when too many upstream research tools are owned separately, the total cost of accessing them for downstream research exceeds the value of the research; no one can afford to use all required tools; innovation is blocked despite technology being theoretically available; the 'tragedy of the anti-commons' — too many rights, too little use; PCR EXAMPLE: Roche held the fundamental PCR patents; charged high royalties for research use; the result was high costs for research labs; PCR has become extraordinarily valuable; the original restriction led to workarounds and design-arounds; CRISPR PATENT WAR: the Broad Institute and UC Berkeley have been litigating since 2012 over fundamental CRISPR-Cas9 patents; both grant licenses but in overlapping portfolios; the uncertainty delayed some commercialization; courts have largely separated the patent estates; PRACTICAL NORMS: in practice, many research tool patent holders grant royalty-free licenses to academic institutions; do not enforce against academic research; use research exemptions as a matter of policy rather than law; LICENSING SOLUTIONS: patent pools for research tools; open-source biology (BioBricks; OpenMTA); NIH guidelines on research tool licensing encourage broad access; Merck Genome Research Patent Pledge (non-assertion against academic research).