Blog By: Nathaniel Richey
The constitutionally ordained purpose of the American patent system is “[t]o promote the Progress of Science and useful Arts.”[i] In some cases, however, the patent system may deter rather than promote innovation by making it more difficult for scientists to perform research in fields saturated with patented technology, lest the researchers risk facing patent infringement suits.[ii] In a recent report, the United States Department of Agriculture illuminated agricultural industry stakeholders’ concerns that the absence of a statutory research exemption from plant utility patent infringement hinders agricultural innovation.[iii] While the report discussed a collaboration between the United States Department of Agriculture and the United States Patent and Trademark Office to facilitate innovation in the agricultural industry, ultimately the burden lies with Congress to amend the patent statutes to include a research exemption.[iv]
Patents encourage innovation by granting their holders the right to exclude others from making, selling, or using the patented invention for the duration of the patent.[v] Patents may deter progress, however, when a particular patented technology becomes a crucial research tool, and the patent owner excludes other researchers from using the tool.[vi] For example, say Company X owns a patent for a drought-resistant corn variety. Company Y’s researchers hypothesize that a particular gene confers mold resistance when inserted into Company X’s corn variety. To test its hypothesis, Company Y will need to perform research using Company X’s drought-resistant corn. Because this would be an infringing act, Company X can force Company Y to pay licensing fees or risk a patent infringement suit, which could deter Company Y from doing the research at all. When this happens, useful research that could have happened does not happen, and social welfare decreases as a result.
A research exemption from patent infringement would go a long way to solving this problem. An exemption would facilitate innovation by immunizing researchers from patent infringement when they employ patented technology to perform research covered by the exemption. Indeed, many advanced countries include research exemptions in their patent laws.[vii]
American patent law includes research exemptions, but their usefulness is currently limited.[viii] The Plant Variety Protection Act, for example, confers patent-like protection to certain kinds of plants and includes a research exemption.[ix] However, after the Supreme Court sanctioned an administrative decision making some plants eligible for utility patent protection, plants may be protected by utility patents to which effectively no research exemption applies.[x] Although the common law includes a research exemption as a defense against patent infringement, the Federal Circuit severely narrowed the defense so that it does not apply to “any conduct that is in keeping with the alleged infringer’s legitimate business,” even if the business is research lacking a commercial application.[xi]
Given the courts’ narrow construction of the common law research exemption,[xii] the burden falls on Congress to create a more expansive statutory research exemption. Congress already has a model for exempting research-related activities from patent infringement, having done so under the Hatch-Waxman Act for uses of pharmaceuticals related to the submission of information to the government under any federal law that regulates the manufacture, use, or sale of drugs.[xiii] Amending the patent laws to exempt research-related uses of plants covered by utility patents would promote progress and increase social welfare by removing a barrier to innovation in the agricultural industry.[xiv]
[i] U.S. Const. art. I, § 8, cl. 8.
[ii] See, e.g., Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 Science 698 (1998) (discussing the “tragedy of the anticommons,” whereby the proliferation of intellectual property rights can cause the underuse of resources because too many intellectual property owners can block each other).
[iii] U.S. Dep’t of Agric., Agric. Mktg. Serv., More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs 30 (2023).
[iv] Id. at 6.
[v] See 35 U.S.C. § 271(a) (defining the unauthorized use, offer to sell, or sale of patented inventions within the United States during the term of the patent as patent infringement).
[vi] See, e.g., Heller & Eisenberg, supra note ii, at 698.
[vii] See, e.g., András Kupecz et al., Safe Harbors in Europe: An Update on the Research and Bolar Exemptions to Patent Infringement, 33 Nature Biotech. 710 (2015) (noting that Belgium, France, Germany, Italy, Spain, the Netherlands, and the United Kingdom are among the nations with research exemptions to patent infringement).
[viii]See Nicholas Short, A Research Exemption for the 21st Century, 50 U. Mich. J. L. Reform Caveat 1, 2-5 (2016) (discussing the three limited exemptions in American patent law, which are the research exemption under the Plant Variety Protection Act, the research exemption applicable to pharmaceuticals and medical devices under the Hatch-Waxman Act, and the common law research exemption, otherwise known as “experimental use doctrine”).
[ix] Id.
[x] J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124, 134 (2001); Ex Parte Hibberd, 227 U.S.P.Q. 443, 444 (B.P.A.I. 1985) (holding that plants are within the meaning of “manufacture” or “composition of matter” and were thus within the patent-eligible subject matter of 35 U.S.C. § 101).
[xi] The common law research exemption is also called the experimental use doctrine. Madey v. Duke Univ., 307 F.3d 1351, 1362 (Fed. Cir. 2002) (giving the example of major research universities who engage in research projects with arguably no commercial application as being nonetheless subject to patent infringement suits because research is in keeping with the university’s legitimate business).
[xii] See id.
[xiii] 35 USC 271(e); Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (“[W]e think it apparent from the statutory text that § 271(e)(1)’s exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA.”).
[xiv] See Short, supra note viii, at 15-16 (discussing how, even though patents can promote investment in innovation, they can also lead to the suppression of innovation, which suggests the remedy of a bright-line safe harbor from infringement for research activity).