Research Tool Patents — Opening Loopholes For Offshore Use

April 19, 2002 Advisory
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Several recent United States trial court holdings have opened up possible "loopholes" for the use of research tool patents and compounds for research use without infringement liability.
In Bayer AG v. Housey Pharmaceuticals, Inc., the Court held that liability for infringing imports and sales under 35 USC §271(g) applies only to products derived from patented manufacturing processes, and not to patented screening methods. The Housey patents generally relate to method of determining whether a substance is an inhibitor or activator of a protein. However, under a plain reading of the statute, the Court found that §271(g) addresses only products derived from patented manufacturing processes, i.e., methods of actually making or creating a product, and not methods of gathering information about, or identifying a substance worthy of further development. According to the Court, the processes of identification claimed in the Housey patents were not steps in the manufacture of final drug products.
This decision complements recent policy statements by the US Patent Office on so-called "reach-through claims" to preclude claims to compounds identified by patentable assays without a direct description of such compounds. (See "USPTO Report on Comparative Study on Biotechnology Practices: Reach-Through Claims" available at www.uspto.gov). This decision now makes it more difficult for the owner of an assay patent to sue a party for using an assay or a receptor to detect inhibitors outside the US. According to this Court, the importation, use or sale of a manufactured final product is necessary, and no remedy is available under §271(g).
In Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., BMS claimed that its use of RPR's patented intermediates for the preparation of taxol in an attempt to find taxol analogs fell within 35 USC §271(e)(1), which exempts from infringement liability the use of a patented invention solely for uses reasonably related to the development and submission of information to the FDA. The Court concluded that BMS' use of the intermediates as a starting point to identify taxol analogs was exempt under 35 USC §271(e)(1) because it was objectively reasonable for BMS to believe that there was a "decent prospect" that its use of the intermediates would have contributed to the generation of information that was likely to be relevant in the FDA review process.
In Columbia University v. Roche Diagnostics, Columbia sued Roche for its infringement of Columbia's patents directed to methods and products to produce genetically engineered erythropoietin (EPO). Because it concluded that infringement under 35 USC §271(a) must occur in the United States, the Court found that Roche did not directly infringe Columbia's patents for methods of genetically transforming cells to induce them to produce EPO, even if it obtained cell lines it used in Germany from its collaborator in the United States. The Court stated that mere ownership of products used to infringe abroad did not relocate the infringing activities of Roche to the United States. The Court also rejected Columbia's argument that importation of EPO, an unpatented by-product of Columbia's patented methods, should result in infringement under the so-called "fruit of the poisonous tree" doctrine. The Court concluded that Roche did not directly infringe the Columbia patents even if it subsequently imported EPO into the United States, because the EPO itself was not a patented invention under the statute
As indicated from these cases, the nature of the research and collaborations in the biotechnology and pharmaceutical industries result in interesting factual scenarios relating to patent infringement under the US patent laws. While each situation must be evaluated on its own facts, Courts have demonstrated that certain uses of patented products and methods do not result in infringement. It remains to be seen if the Appeals Court agrees with these trial Court holdings, and how far future decisions broaden these rulings to other uses of patented research tools.

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