Biotechnology, research and intellectual property law andrew j allen



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X. Exclusion from Patent Infringement for bona fide Research

Scope of research exclusion


The Court of Appeal recently acknowledged the existence of the 'exclusion from infringement for the benefit of those practicing the invention for the purpose of bona fide research'.75 The defence of experimental user is not part of the Patents Act 1953, but is derived from case law. In Monsanto v Stauffer76 the defendants were using a patented herbicide in field trials designed to obtain data necessary to achieve permission to use the herbicide in New Zealand. In the High Court Eichelbaum J accepted that the unlicensed use of patented inventions for the purpose of bona fide experiments, or with a view of seeing whether an improvement can be made upon the invention, is not an invasion of the exclusive rights granted by the patent.77 Under the grant of the letters patent the patentee has 'the full power, sole privilege and authority to make, use exercise and vend the invention within New Zealand'.78 It was clearly stated, however, that this right is limited by permitted experimental uses of the invention. A monopoly would be infringed where there was 'some deriving of advantage'.79 The defendant's use of the herbicide in field trials had 'gone well past the demarcation line of permitted experimental use'.80 Beyond these guidelines there is no definition of the scope of this experimental use exclusion.

The United Kingdom Patents Act 1977 contains an express provision excluding from infringement acts done for experimental purposes relating to the subject matter of the invention.81 The scope of this provision has been said to include 'trials carried out in order to discover something unknown or to test a hypothesis or even in order to find out whether something which is known to work in specific conditions, e.g. of soil or weather, will work in different conditions'.82

It may be asked whether permitted experimental use of a patented invention is part of the patent social contract. If it was in the legislation, as it is in the United Kingdom, then it would be clear to the inventor that he or she enters the contract agreeing to experimental use. In New Zealand, it is judicially crafted,and in order to determine the scope of this exclusion from infringement liability, the policy that guides and determines the boundaries of the exclusion needs to be examined. Can this policy help to set the limits as to what is research use and what is not? The experimental use exclusion from patent infringement liability can be justified by reference to the social contract underlying the patent system. It would be contrary to the aim of encouraging research and development, which is part of the patent social contract, if the progress of basic research were to be inhibited by patents. Therefore, the conduct of basic scientific research should be the first activity accepted as falling within the experimental use exception.

The scope of this exception may need to be carefully considered in light of biotechnological patents that appear to claim basic discoveries such as DNA sequence information. Too narrow a scope could stifle research and impair the processes of building new knowledge upon old. Too broad a scope may inhibit private sector investment in research by reducing the incentive value of the patent monopoly.

The incentive to invent rationale of the patent system works by persuading the inventor to disclose her or his invention in return for protection of the potential to generate financial rewards from its exploitation. The enticement is a guarantee of compensation for any unlicensed use of the invention. Any use which the inventor does not voluntarily accept, and which potentially reduces the profitability of the invention, will be a disincentive to future inventors to utilise the patent system.

In the context of biotechnology, the research exclusion may assume a more prominent role in the light of accusations that gene patents lock up basic biological information.83 The patent system requires a full specification of the invention to be made public, and the social contract analysis would suggest that the scope of the patent monopoly is equivalent to what has been contributed to the public stock of knowledge in the specification. The conclusion is that the information cannot be locked up. The patent holder may only control the commercial exploitation of the information. Research conducted upon patented inventions solely for the purpose of scientific curiosity does not threaten the potential rewards that a patentee can expect. This activity supports the advancement of human knowledge.

The scope of this permitted use is poorly defined because it will generally only be available as a defence to an infringement action where the patent holder's pecuniary interests are not threatened by the use of the invention. In these circumstances, litigation is unlikely. Cases indicate the issue has arisen primarily where a competitor has sought to use a patented product in order to gain regulatory approval to market a generic product. This was the situation in Monsanto v Stauffer,84 and has arisen most frequently in the area of generic pharmaceuticals which need the approval of the Department of Health before they can be marketed in New Zealand.85 The New Zealand Patents Act 1953 guards against a patent holder not making an invention available in New Zealand. Where the invention covered by a patent is not available in New Zealand on reasonable terms, an application can be made to the High Court for issue of a compulsory licence.86 This provision was amended in 1994, narrowing the grounds upon which a licence could be ordered, in compliance with the TRIPs agreement.87 Prior to this change, there was a presumption in favour of a grant of a compulsory licence for patented inventions in the fields of food and medicine.88 Applicants must first make every effort to obtain authorisation from the patentee on reasonable terms. Evidence suggests that fears of patent holders locking up areas of research are unfounded. DuPont, the holder of the patent for the Harvard Mouse, has agreed that not-for-profit researchers will be able to use the mouse without having to pay any licensing fee.89 Patents that comprise the breast cancer genes BRCA have not hindered the production of several hundred research papers discussing these genes.90

Evidence was presented to the Royal Commission on Genetic Modification which suggested patents covering tools and techniques used in research did not inhibit the progress of research. This evidence suggests the use of patented inventions, particularly the tools of genetic engineering, is facilitated by licensing agreements. The ownership of intellectual property is used as a bargaining chip in order to secure licences to use others' intellectual property.91 Improvements upon existing innovations will frequently involve the use of the intellectual property embodied in the first innovation. An example is a patent for a mousetrap (pioneer patent), and a subsequent patent for an improved mousetrap (improvement patent).92 It is likely that exploitation of the improved mousetrap will, in the absence of permission from the pioneer patent holder, be an infringement of the pioneer patent. The pioneer patent holder must obtain the permission of the improvement patent holder to use the better mousetrap invention. There is a commercial incentive for each owner to reach an agreement with the other, and the strength of each inventor's bargaining position reflects the value of his or her invention.


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