United States Court of Appeals for the Federal Circuit.
ROCHE PRODUCTS, INC. Appellant,
v.
BOLAR PHARMACEUTICAL CO., INC., Appellee.
733 F.2d 858
No. 84–560, April 23, 1984
Before MARKEY, Chief Judge, NICHOLS, Senior Circuit Judge, and KASHIWA, Circuit Judge.
Opinion
NICHOLS, Senior Circuit Judge.
[1] This is an appeal from a judgment entered on October 14, 1983, in which the United States District Court 572 F.Supp. 255 for the Eastern District of New York held United States Patent No. 3,299,053 not infringed and denied relief. We reverse and remand.
I
[2] At stake in this case is the length of time a pharmaceutical company which has a patent on the active ingredient in a drug can have exclusive access to the American market for that drug. Plaintiff-appellant Roche Products, Inc. (Roche), a large research-oriented pharmaceutical company, wanted the United States district court to enjoin Bolar Pharmaceutical Co., Inc. (Bolar), a manufacturer of generic drugs, from taking, during the life of a patent, the statutory and regulatory steps necessary to market, after the patent expired, a drug equivalent to a patented brand name drug. Roche argued that the use of a patented drug for federally mandated premarketing tests is a use in violation of the patent laws.
[3] Roche was the assignee of the rights in U.S. Patent No. 3,299,053 (the ‘053 patent), which expired on January 17, 1984. The ’053 patent, which issued on January 17, 1967, is entitled “Novel 1 and/or 4-substituted alkyl 5-aromatic-3H-1,4-benzodiazepines and benzodiazepine-2-ones.” One of the chemical compounds claimed in the ’053 patent is flurazepam hydrochloride (flurazepam hcl), the active ingredient in Roche’s successful brand name prescription sleeping pill “Dalmane.”
[4] In early 1983, Bolar became interested in marketing, after the ’053 patent expired, a generic drug equivalent to Dalmane. Because a generic drug’s commercial success is related to how quickly it is brought on the market after a patent expires, and because approval for an equivalent of an established drug can take more than 2 years, Bolar, not waiting for the ’053 patent to expire, immediately began its effort to obtain federal approval to market its generic version of Dalmane. In mid-1983, Bolar obtained from a foreign manufacturer 5 kilograms of flurazepam hcl to form into “dosage form capsules, to obtain stability data, dissolution rates, bioequivalency studies, and blood serum studies” necessary for a New Drug Application to the United States Food and Drug Administration (FDA).
[5] On July 28, 1983, Roche filed a complaint in the United States District Court for the District of New Jersey against three parties: Bolar, Bolar’s principal officer, and the importer of the infringing flurazepam hcl. Only Bolar remains a party defendant. Roche sought to enjoin Bolar from using flurazepam hcl for any purpose whatsoever during the life of the ’053 patent. When Bolar stated during discovery, on August 30, 1983, that it intended immediately to begin testing its generic drug for FDA approval, Roche moved for and was granted a Temporary Restraining Order, on September 2, 1983.
[6] On September 26, 1983, Bolar was granted a change of venue and the case was transferred to the United States District Court for the Eastern District of New York. That court consolidated Roche’s motion for a preliminary injunction with the trial on the merits pursuant to Fed.R.Civ.P. 65(a)(2) (both parties had stipulated to all the pertinent facts so no testimony was necessary) and on October 11, 1983, issued a Memorandum and Order denying Roche’s application for a permanent injunction. The court held that Bolar’s use of the patented compound for federally mandated *861 testing was not infringement of the patent in suit because Bolar’s use was de minimis and experimental. The court entered judgment for Bolar on October 14, 1983, and Roche filed its notice of appeal that same day.
II
[7] The district court correctly recognized that the issue in this case is narrow: does the limited use of a patented drug for testing and investigation strictly related to FDA drug approval requirements during the last 6 months of the term of the patent constitute a use which, unless licensed, the patent statute makes actionable? The district court held that it does not. This was an error of law.
III
A
[8] When Congress enacted the current revision of the Patent Laws of the United States, the Patent Act of 1952, ch. 950, 66 Stat. 792 (codified at 35 U.S.C.), a statutory definition of patent infringement existed for the first time since section 5 of the Patent Act of 1793 was repealed in 1836. Title 35 U.S.C. § 271(a) incorporates the disjunctive language of the statutory patent grant which gives a patentee the “right to exclude others from making, using, or selling” a patented invention, 35 U.S.C. § 154. Congress states in section 271(a):
[W]hoever without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefore, infringes the patent.
[9] It is beyond argument that performance of only one of the three enumerated activities is patent infringement. It is well-established, in particular, that the use of a patented invention, without either manufacture or sale, is actionable. See Aro Manufacturing Co. v. Convertible Top Replacement Co., 377 U.S. 476, 484, 84 S.Ct. 1526, 1531, 12 L.Ed.2d 457, 141 USPQ 681, 685 (1964); Coakwell v. United States, 372 F.2d 508, 510, 178 Ct.Cl. 654, 153 USPQ 307, 308 (1967). Thus, the patentee does not need to have any evidence of damage or lost sales to bring an infringement action.
[10] Section 271(a) prohibits, on its face, any and all uses of a patented invention. Of course, as Judge Learned Hand observed in Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.), aff’d, 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165 (1945):
[I]t is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.
[11] Because Congress has never defined use, its meaning has become a matter of judicial interpretation. Although few cases discuss the question of whether a particular use constitutes an infringing use of a patented invention, they nevertheless convincingly lead to the conclusion that the word “use” in section 271(a) has never been taken to its utmost possible scope. See, e.g., Pitcairn v. United States, 547 F.2d 1106, 212 Ct.Cl. 168, 192 USPQ 612 (1976), cert. denied, 434 U.S. 1051, 98 S.Ct. 903, 54 L.Ed.2d 804 (1978) (experimental use may be a defense to infringement); United States v. Univis Lens Co., 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408 (1942) (“An incident to the purchase of any article, whether patented or unpatented, is the right to use and sell it, * * *.” Id. at 249, 62 S.Ct. at 1093); General Electric Co. v. United States, 572 F.2d 745, 215 Ct.Cl. 636, 198 USPQ 65 (1978) (“[I]t can be properly assumed that as part of the bargain the seller of a device incorporating a patented combination * * * authorizes the buyer to continue to use the device so long as the latter can and does use the elements he purchased from the patentee or licensor.” Id. at 784–85, 198 USPQ at 98).
[12] Bolar argues that its intended use of flurazepam hcl is excepted from the use prohibition. . . . based on a liberal interpretation of the traditional experimental use exception[.]
B
[13] The so-called experimental use defense to liability for infringement generally is recognized as originating in an opinion written by Supreme Court Justice Story while on circuit in Massachusetts. In Whittemore v. Cutter, 29 Fed.Cas. 1120, 1121, (C.C.D.Mass.1813) (No. 17,600), Justice Story sought to justify a trial judge’s instruction to a jury that an infringer must have an intent to use a patented invention for profit, stating:
[I]t could never have been the intention of the legislature to punish a man who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects.
[14] Despite skepticism, see, e.g., Byam v. Bullard, 4 Fed.Cas. 934 (C.C.D.Mass.1852) (No. 2,262) (opinion by Justice Curtis), Justice Story’s seminal statement evolved until, by 1861, the law was “well-settled that an experiment with a patented article for the sole purpose of gratifying a philosophical taste, or curiosity, or for mere amusement is not an infringement of the rights of the patentee.” Peppenhausen v. Falke, 19 Fed.Cas. 1048, 1049 (C.C.S.D.N.Y.1861) (No. 11,279). (For a detailed history and analysis of the experimental use exception, see Bee, Experimental Use as an Act of Patent Infringement, 39 J.Pat.Off.Soc’y 357 (1957).) Professor Robinson firmly entrenched the experimental use exception into the patent law when he wrote his famous treatise, W. Robinson, The Law of Patents for Useful Inventions § 898 (1890):
898. No Act an Infringement unless it Affects the Pecuniary Interests of the Owner of the Patented Invention.
[T]he interest to be promoted by the wrongful employment of the invention must be hostile to the interest of the patentee. The interest of the patentee is represented by the emoluments which he does or might receive from the practice of the invention by himself or others. These, though not always taking the shape of money, are of a pecuniary character, and their value is capable of estimation like other property. Hence acts of infringement must attack the right of the patentee to these emoluments, and either turn them aside into other channels or prevent them from accruing in favor of any one. An unauthorized sale of the invention is always such an act. But the manufacture or the use of the invention may be intended only for other purposes, and produce no pecuniary result. Thus where it is made or used as an experiment, whether for the gratification of scientific tastes, or for curiosity, or for amusement, the interests of the patentee are not antagonized, the sole effect being of an intellectual character in the promotion of the employer’s knowledge or the relaxation afforded to his mind. But if the products of the experiment are sold, or used for the convenience of the experimentor, or if the experiments are conducted with a view to the adaptation of the invention to the experimentor’s business, the acts of making or of use are violations of the rights of the inventor and infringements of his patent. In reference to such employments of a patented invention the law is diligent to protect the patentee, and even experimental uses will be sometimes enjoined though no injury may have resulted admitting of positive redress. [Emphasis supplied, footnotes omitted.]
[15] The Court of Claims, whose precedents bind us, on several occasions has considered the defense of experimental use. Bolar concedes, as it must, that its intended use of flurazepam hcl does not fall within the “traditional limits” of the experimental use exception as established in these cases or those of other circuits. Its concession here is fatal. Despite Bolar’s argument that its tests are “true scientific inquiries” to which a literal interpretation of the experimental use exception logically should extend, we hold the experimental use exception to be truly narrow, and we will not expand it under the present circumstances. Bolar’s argument that the experimental use rule deserves a broad construction is not justified.
[16] Pitcairn, the most persuasive of the Court of Claims cases concerning the experimental use defense, sets forth the law which must control the disposition of this case: “[t]ests, demonstrations, and experiments * * * [which] are in keeping with the legitimate business of the * * * [alleged infringer]” are infringements for which “[e]xperimental use is not a defense.” 547 F.2d at 1125–1126, 192 USPQ at 625. We have carefully reviewed each of the other Court of Claims cases, and although they contain some loose language on which Bolar relies, they are unpersuasive. The Ordnance Engineering case provides no guidance concerning the boundaries of an appropriately applied experimental use rule other than flatly stating that a device must have been “built for experimental purposes.” In Chesterfield, the court’s flat declaration that “experimental use does not infringe” is pure obiter dictum. See Pitcairn, 547 F.2d at 1125, 192 USPQ at 625. Douglas has no precedential value here since the Court of Claims never affirmed the part of the trial judge’s opinion dealing with experimental use; moreover, Trial Judge Cooper’s well-reasoned analysis of the experimental use rule concluded that no case had permitted a pattern of systematic exploitation of a patented invention for the purpose of furthering the legitimate business interests of the infringer. The authority of Trial Judge Cooper’s views rests on his reputation as a fine patent lawyer, and on their own intrinsic persuasiveness.
[17] Bolar’s intended “experimental” use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. Bolar’s intended use of flurazepam hcl to derive FDA required test data is thus an infringement of the ’053 patent. Bolar may intend to perform “experiments,” but unlicensed experiments conducted 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. It is obvious here that it is a misnomer to call the intended use de minimis. It is no trifle in its economic effect on the parties even if the quantity used is small. It is no dilettante affair such as Justice Story envisioned. We cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of “scientific inquiry,” when that inquiry has definite, cognizable, and not insubstantial commercial purposes.
. . . .
V
Conclusion
[18] The decision of the district court holding the ’053 patent not infringed is reversed. The case is remanded with instructions to fashion an appropriate remedy. Each party to bear its own costs.
REVERSED AND REMANDED.