By Wan Chieh (Jenny) Lee and Joshua Goldberg
There is currently no statutory basis in the United States for a broad “experimental use”
exception to patent infringement. As outlined below, however, U.S. law provides for a more
limited experimental use exception, sometimes referred to as the “Bolar exemption”, as
supported by the relevant case law
1. History of the Bolar Exemption
An experimental use defense to patent infringement has long been part of the common law of the United States. Prior to the enactment of the Hatch-Waxman Act, the seminal case in this area, Roche Products, Inc. v. Bolar Pharmaceutical Co. from 1983, arose in the U.S. District Court. In this case, the defendant Bolar, a generic pharmaceutical manufacturer, used a patented drug product to conduct studies that were required to obtain regulatory approval of a generic version of the drug product. The District Court found that the defendant could rely on the experimental use as an exception to infringement. The Court of Appeals for the Federal Circuit (the Federal Circuit) reversed. Specifically, the Federal Circuit noted that Bolar’s use of the patented drug product “is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” The Federal Circuit noted that the experimental use exception is “truly narrow,” and that Bolar’s intended use of the patented drug “with a view to the adaption of the patented invention to the experimentor’s business is a violation of the rights of the patentee to exclude others from using his patented invention.”
Under Roche v. Bolar, patent owners would enjoy a de facto patent term extension because generic competitors are required to spend time after patent expiration to generate experimental data before they can obtain FDA approval for market entry of a generic product. The Federal Circuit declined to create a new exception to infringement. Instead, the Court stated that “[i]t is the role of Congress to maximize public welfare through legislation” and that “[n]o matter how persuasive the policy arguments are for or against these proposed bills, this court is not the proper forum in which to debate them.”
By denying an experimental use exception to a developer of generic drugs, the decision effectively frustrated the generic drug provisions of the then–recently enacted Federal Food Drug and Cosmetic Act of 1982. The Bolar exemption was later codified in 35 U.S.C. § 271(e)(1) in 1984, as part of the Hatch-Waxman Act, which includes a statutory scheme linking generic drug approval to a patent listing and litigation process, in direct response to and abrogated the Roche v. Bolar decision.
35 U.S.C. § 271(e)(1) states that:
It shall not be an act of infringement to make, use, offer to sell,
or sell within the United States or import into the United States
a patented invention (other than a new animal drug or
veterinary biological product (as those terms are used in the
Federal Food, Drug, and Cosmetic Act and the Act of March 4,
1913) which is primarily manufactured using recombinant DNA,
recombinant RNA, hybridoma technology, or other processes
involving site specific genetic manipulation techniques) 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.
This exception under 35 U.S.C. § 271(e)(1) became commonly known as the Bolar exemption
or § 271(e)(1) safe harbor. Under the Bolar exemption, “[w]hile performing development
work and seeking such approval, a generic drug manufacturer is free from liability for patent
infringement based solely upon acts necessary to prepare the ANDA.”
2. Courts’ Interpretations of the Bolar Exemption
The U.S. Supreme Court has interpreted the scope of 35 U.S.C. § 271(e)(1) to provide “a
wide berth for the use of patented drugs in activities related to the federal regulatory
process”, and to indicate the exemption applies to “all uses of patented inventions that are
reasonably related to the development and submission of any information under the [Federal
Food, Drug and Cosmetics Act].”This broad interpretation of the § 271(e)(1) exemption
includes “(1) experimentation on drugs that are not ultimately the subject of an FDA
submission or (2) use of patented compounds in experiments that are not ultimately
submitted to the FDA.” The Court noted, however, that “[b]asic 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,” would not be within the scope permitted by the Bolar exemption.
a. Scope of Bolar Exemption
i. Applicable Fields of Technology
Although the language of the statue refers to “drugs or veterinary biological products,” the
Supreme Court in Eli Lilly & Co. v. Medtronic, Inc. interpreted this to extend beyond just drug
products and veterinary biological products. The Court reasoned that the Bolar exemption
is generally complementary to 35 U.S.C. § 156(a), which provides patent term extension for
patents relating to products that were subject to regulatory delays and could not be marketed
prior to regulatory approval. The combination of these two statutory provisions represents a compromise struck in the enactment of the Hatch-Waxman Act that gave additional patent term for products subject to regulatory delays and could not be marketed prior to regulatory approval, but removed the de facto patent term extension created by the combined effect of patent law and the requirement for premarketing regulatory approval discussed in Roche v. Bolar. All of the types of products eligible for patent term extension under § 156(a) are also eligible for the Bolar exemption under § 271(e)(1) and vice versa. Therefore, the Bolar exemption is applicable to medical devices, food additives, color additives, new drugs, antibiotic drugs, human biological products, new animal drugs and veterinary biological products that require regulatory approval by the FDA.
Furthermore, the § 271(e)(1) exemption has been interpreted by the Supreme Court to apply to “all uses of patented inventions that are reasonably related to the development and submission of any information under the [Federal Food, Drug and Cosmetics Act].” Therefore, the Bolar exemption is available to generic drug manufacturers as well as innovative manufacturers, as long as the use is reasonably related to seeking approval before the FDA. The exemption under § 271(e)(1) may also extend to third parties, e.g., an active pharmaceutical ingredient (API) supplier, engaged by the party seeking FDA approval. See Shire, LLC v. Amneal Pharms., LLC.
ii. Purpose of Experiments/Infringing Activities
Under § 271(e)(1), the Bolar exemption is limited only to those activities that are “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.” This exemption does not cover all research activities. The Court in Merck KGaA v Integra specified that “[b]asic 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 not within the scope of the Bolar exemption.
iii. Examples of Exempted and Infringing Activities
The Bolar exemption is not limited only to information that is submitted to the FDA. Rather, the statute has been interpreted by the U.S. Supreme Court to apply to preclinical studies “as long as there is a reasonable basis for believing that the experiments will produce the type of information that are relevant to an IND or NDA.” These preclinical studies may relate to a drug’s safety, efficacy, mechanism of action, pharmacokinetics, and pharmacology. The § 271(e)(1) exemption is sufficiently broad to encompass “(1) experimentation on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA.
The § 271(e)(1) exemption allows uses for more than FDA approval, as long as the use is reasonably related to FDA approval. The Federal Circuit in AbTox, Inc. v. Exitron Corp. explained that the statute “does not look to the underlying purposes or attendant consequences of the activity (e.g., tests led to the sale of the patent), as long as the use is reasonably related to FDA approval.”
Recently, in Edwards Lifesciences Corp. v. Meril Life Scis. Priv. Ltd., the Federal Circuit reiterated the standard from Merck KGaA v Integra that “for each act of infringement the safe harbor is available only for acts or uses that bear a reasonable relation to the development and submission of information to the FDA.” In view of this framework, the Court determined that “Meril’s importation of the transcatheter heart valves [to the medical conference] constituted another step in the right direction ‘on the road to regulatory approval’,” and therefore, “firmly resides in the § 271(e)(1) safe harbor.”
While the § 271(e)(1) exemption is to be broadly applied, there are some activities that do not fall within the scope of the exemption. For example, in Proveris Sci. Corp. v. Innovasystems, Inc., the Federal Circuit declined to extend the § 271(e)(1) exemption to research tools used for generating data for FDA submission. The defendant, Innova, produces an optical spray analyzer that measures the physical parameters of aerosol sprays used in drug delivery devices subject to a required FDA approval process. However, neither plaintiff Proveris’ patented product nor Innova’s optical spray analyzer are subject to FDA approval. The court in Proveris declined to extend the § 271(e)(1) exemption to Innova’s sale of the optical spray analyzer, because the product at issue does not require FDA approval.
In Classen v. Biogen, the Court explained that “§ 271(e)(1) provides an exception to the law of infringement in order to expedite development of information for regulatory approval of generic counterparts of patented products,” but “does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained.” At issue in Classen were post-approval studies conducted to evaluate suggested association between childhood vaccinations and risk of developing type 1 diabetes, and to determine whether timing of vaccination influences risk. Biogen and GlaxoSmithKline provided vaccines, advised on immunization schedules, and reported any adverse vaccine effects to the FDA. The court in Classen found that “the Biogen and Glaxo activities charged with infringement are not related to producing information for an IND or NDA and are not a ‘phase of research’ possibly leading to marketing approval.” Therefore, the § 271(e)(1) exemption was found not applicable to these activities
However, not all post-approval activities fall outside of the § 271(e)(1) exemption. In Momenta Pharms. Inc. v. Amphastar Pharm., Inc., the Federal Circuit declined to adopt a bright line pre-/post-approval distinction for § 271(e)(1), and instead, held that “post-approval studies that are ‘reasonably related to the development and submission of information under a Federal aw which regulates the manufacture, use, or sale of drugs’ fall within the scope of the § 271(e)(1) safe harbor.” In a subsequent proceeding, the Court clarified that “routine record retention requirements associated with testing and other aspects of the commercial production process” are different from “non-routine submissions that may occur both pre and post-approval, such as the submission of investigational new drug applications (“INDs”),
new drug applications (“NDAs”), supplemental NDAs, or other post-approval research results.” Therefore, “[t]he routine quality control testing of each batch of generic [drug] as part of the post-approval, commercial production process is… not ‘reasonably related to the development and submission of information’ to the FDA,” and not exempt from infringement under § 271(e)(1).
In contrast, in Classen Immunotherapies v. Elan Pharms., Inc., the Court of Appeal for the Federal Circuit held that a post-approval clinical study and submission of the results from the study to the FDA to revise an approved product’s label was exempt from infringement under §271(e)(1). The court explained that in the post-approval context the analysis may be less straightforward, however, the § 271(e)(1) exemption “does not categorically exclude post approval activities from the ambit of the safe harbor.” The § 271(e)(1) exemption allows drug manufacturers to voluntarily conduct post-approval studies on their products for purposes of developing and submitting information to the FDA, such as supplemental new drug applications seeking the FDA’s approval to revise the label of their products. The court considered these post-approval studies to “serve similar purposes as pre-approval studies in ensuring the safety and efficacy of approved drugs” and is therefore “an integral part of the regulatory approval process” and exempt from infringement under § 271(e)(1).
In Amgen Inc. v. Hospira, Inc., the issue of whether the manufacture and stockpiling of batches of product would be exempt from infringement under § 271(e)(1) was determined at trial by a jury and upheld by the Court of Appeals for the Federal Circuit. The patented inventions in this case are related to a method of manufacturing. Amgen asserted that Hospira’s manufacture of batches of drug substance for its biosimilar drug product infringes the patented methods. At trial, the jury found certain batches were entitled to protection under the § 271(e)(1) safe harbor. In affirming the jury finding, the Federal Circuit explained that manufacturing to stockpile commercial inventory does not automatically remove the activity from the § 271(e)(1) safe harbor, but can be probative evidence of whether the use was reasonably related to seeking FDA approval. Therefore, certain stockpiling activities are permitted under the § 271(e)(1) exemption, but manufacturing solely for the purpose of stockpiling without any relationship to submitting information to the FDA is not exempt from infringement under § 271(e)(1).
3. Conclusion
The Bolar exemption is codified in 35 U.S.C. § 271(e)(1) and provides a limited exemption to patent infringement for certain experimental uses. Specifically, this exemption is “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,” which includes medical devices, food additives, color additives, new drugs, antibiotic drugs, human biological products, new animal drugs and veterinary biological products that require regulatory approval by the FDA. Under § 271(e)(1), the commercial character of the act is not dispositive as long as the act is reasonably related to the development and submission of information for FDA approval. Contrary to the experimental use exception, the scope of the Bolar exemption has so far been broadly interpreted. However, for technologies that are not subject to FDA premarketing approval, i.e., non-pharmaceutical or non-medical technologies, the § 271(e)(1) exemption is not available
