Madey v. Duke University
This case has ruffled a number of feathers in the academic community, parts of which had tended to assume that it could own patents but, at least when carrying out research with no direct commercial goal, need not worry about those of others because pure research was thought to be protected by an “experimental use” exception from patent infringement. The Federal Circuit Court of Appeals has now held that this is not so.
The case arose out of two patents owned by Madey, who had been employed by but subsequently terminated as a laboratory director at Duke University. The patents were obtained prior to his taking up an appointment at Duke. After his termination he sued Duke for infringement of his patents. Duke defended on the grounds that the work it was doing was the subject of government licenses and that it was protected by the experimental use exception. So far as the former was concerned, the district court held that to the extent that the patents were being used by Duke to fulfill government contracts, there could be no claim of patent infringement and that the only recourse was an action for compensation before the Court of Claims. On the experimental use issue the district court placed the burden on Madey to show that the University’s use did not meet the experimental use exception.
The Federal circuit reversed on both issues. On the government license issue, it held that there was insufficient evidence before the court to conclude whether in the present case the work carried out under a government contract was “for the United States” as required by 28 USC 1498(a).
However, it is on the experimental use issue that the universities are most upset. Duke apparently argued that as a non-profit educational establishment its activities were inoculated against patent infringement as long as they were solely for research, academic or experimental purposes. The Federal Circuit disagreed and pointed out that in Roche v. Bolar and other cases it had held that although an experimental use exception as crafted in the nineteenth century continued to exist, it was a very narrow one for example “to satisfy idle curiosity or for strictly philosophical enquiry”. The court went on to state:
regardless of whether a particular institution or entity is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense. Moreover, the profit or non-profit status of the user is not determinative.
The court noted that even projects undertaken without direct commercial application often “unmistakably further the institutes legitimate business interests ... These projects also serve for example to increase the status of the institution and lure lucrative research grants, students and faculty.
 64 USPQ2d 1737 (Fed. Cir. 2002).
 28 USC 1498 implements the rights of the United States government to assert eminent domain with respect to acts carried out on its behalf as provided by the Fifth Amendment to the Constitution. Under these provisions, use of a patented invention by the Federal government is not an act of patent infringement but can give rise to an action for compensation. Any such action must be brought before the Court of Federal Claims and not before the normal district courts.
 Roche Products Inc. v. Bolar Pharmaceutical Co., Inc. 221 USPQ 937 (Fed Cir 1984), had held that premarketing testing (required by the FDA) by a generic drug manufacturer constituted patent infringement. This was the decision that provoked the legislative compromise that resulted in in Hatch-Waxman amendments referred to elsewhere in this group of decisions in the Abbott v. Novopharm case.
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