The “Safe Harbor” in the U.S. and EU : Research Activities that are Exempted from Patent infringement and Liability

A granted patent prevents a company from making, using or selling the patented inventions, including objects or products that may be obtained from use of the patented process. This applies equally to small molecules and biologics. The estoppel includes even de minimis uses of the patented invention, including for research and development work. However, as we are aware, biologics, drugs and medical device products require a lengthy period of time for development, testing and regulatory approval. Typically, small molecule generics require 2-4 years for development, testing and approval, while it takes 4-6 years for pre-clinical and clinical testing and approval of biosimilars. If developers of biosimilars and generics had to wait until patent expiry before beginning the development/approval process, it would slow development and would extend the patent exclusivity for years beyond the normal expiry of the patent. Such default extension of patent rights (and there is usually more than one patent that needs to be addressed by the developers) would mean delay in bringing affordable healthcare to the patients.

U.S

The concept of the patent “safe harbor” was enacted in the U.S., Europe and elsewhere with a view to address this issue. It exempts the making, using and selling of a patented invention if the purpose is to develop information for a regulatory submission. The purpose of such a “safe harbor” is to allow competitors to obtain marketing approval and launch as soon as relevant patents expire, thereby preventing patentees from effectively extending the market exclusivity (monopoly) granted to them by the patent term. While the purpose has been clear and directly targeted to affordable care while also preventing undue extension of monopolies, this has not been an easy issue for the Courts. Globally, Courts have struggled to balance the purpose of the safe harbor against unfairness to patentees.

The infringement of a patent in the US is governed by 35 U.S.C. § 271(a) which states : ”Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term therefor, infringes the patent . . .” As can be seen, the U.S. patent statute does not exempt de minimis use or use for research from § 271(a).

The common law exception for pure scientific inquiry in the US is very limited. Courts have ruled to provide use of the patented invention for “very narrow purposes and limited to actions performed for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.”

(See Whittlemore v. Cutter, 29 Fed. Cas. 1120 (C.C.D. Mass. 1813); Madey v. Duke Univ., 307 F.3d 1351 (Fed. Cir. 2002)). The experimental use exception is not available whenever a defendant’s research is motivated, even in part, by a commercial purpose. In Roche Prods. v Bolar Pharms, 733 F.2d 858 (Fed. Cir. 1984) the Court stated that the research exemption is unlikely to shield companies or academic institutions engaged in research from infringement, if the research product may be licensed or commercially exploited.

The Safe Harbor was created in 1984 to protect otherwise-infringing uses “reasonably related” to development and submission of information to the FDA in connection with regulatory approval. Although originally directed to development of generic versions of small-molecule drugs under the Drug Price Competition and Patent Term Restoration Act (the Hatch-Waxman Act), the Safe Harbor now also protects development of biosimilar versions of biologic drugs under the BPCIA, as well as branded & follow-on biologics, and medical devices (types I, II & III). As discussed, the Safe Harbor was intended to speed up the launch of new drug products by enabling development during pendency of patent protection, so that the regulatory approval process can be initiated and completed during the term of the patent, and the product could be launched as soon as patent protection expires. Accordingly, the Safe Harbor, which is a part of the Hatch-Waxman Act compromise, also provides minimum periods of regulatory exclusivity for new drugs and the opportunity for patent-holders to sue generic manufacturers immediately upon filing a dossier at the USFDA for regulatory approval.

While the Safe Harbor broadly covers any making, using, offering to sell, selling or importing during the term of the patent, and applies to any ”patented invention”, it may not apply to use of “patented inventions” that are not themselves subject to FDA approval. For example, it does not cover sales of analytical devices used for characterizing FDA-approved products, even if used to generate information for submission to FDA. (See Proveris Sci. Corp. v. Innovasystems, Inc., 536 F.3d 1256, 1265 (Fed. Cir. 2008)).

The Safe Harbor allows use that is “solely for uses reasonably related to the development and submission of information” under the federal laws that regulate drugs, biologics and medical devices. Therefore, it broadly covers any submission of information to FDA under any federal law regulating drugs, biologics or medical devices. However, this has been hotly litigated. Courts have distinguished between pre- and post-approval information, and information that is required by FDA for obtaining or maintaining approval versus routine information on commercial batches submitted to FDA but not required. In Amgen v. Hospira, 944 F.3d 1327, 1340 n.3 (Fed. Cir. 2019), the Court ruled that it is not correct to assume “simply submitting information about a drug substance lot to the FDA brings the manufacture of that lot within the Safe Harbor.” This means that information that may be submitted to the regulatory bodies after receiving marketing approval, such as, for example, reporting adverse effects, quality control testing of commercial batches, etc. does not qualify for exemption under the Safe Harbor. Some cases that are point here are Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011) and Momenta Pharm., Inc. v. Teva Pharm. USA Inc., 809 F.3d 610, 620 (Fed. Cir. 2015). However, non-routine development of information is protected, such as FDA-mandated post-approval studies or product testing and studies necessary for amendment of a drug label. See Momenta Pharm., Inc. v. Amphastar Pharm., Inc., 686 F.3d 1348 (Fed. Cir. 2012) and Classen Immunotherapies, Inc. v. Elan Pharm., Inc., 786 F.3d 892 (Fed. Cir. 2015) that set this clarity.

Since the language of the Safe Harbor rests on “reasonably related to”, and since it is unclear what FDA will require for approval, the Safe Harbor applies to use of a patented invention in experiments “as long as there is a reasonable basis for believing that the experiments will produce the types of information that are relevant to” a submission to the FDA. See Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005). Note also that the Safe Harbor can apply even if no FDA application is ultimately filed.

An important point to note is that Safe Harbor does not necessarily protect all uses of a patented product or process by an accused infringer even if some uses are within the safe harbor. Safe Harbor is evaluated on a use-by-use basis. For example, the use of a particular manufactured batch of an infringing product may be divided into infringing and non-infringing portions if the batch is put to multiple uses. See Amgen Inc. v. Int’l Trade Comm’n, 565 F.3d 846, 853 (Fed. Cir. 2009).

EU

Historically, the European regulations have included an experimental use exemption similar to that in the US, but it had a very limited scope. If the activities had a regulatory purpose, it was considered that the final purpose was marketing after the approval. The situation in EU changed after the Bolar exemption came through in the US in 1984, and after the Directive 2004/27/EC was enacted. This Directive states – “Conducting the necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products.” It must be noted that Directive 2004/27/EC sets a minimum requirement, and the implementation in member states has not been homogenous. Germany, Italy, France have a broad implementation of the Bolar exemption set in the Directive, while the Netherlands has adopted a more restrictive implementation.

Harmonization efforts are currently being aimed at across the EU. In October 2015, the European Commission ‘Single Market Strategy for Europe’ identified the enlargement and harmonization of the Bolar as a priority, with a view to “ensure that a generic could enter the market as soon as possible after the expiry of patent/SPC protection […] based on the basic rationale that free competition should be allowed as soon as protection expires”. More clarity will emerge with time.

The US has certainly had more cases on matters related to the Safe Harbor, and as a result significant clarity has emerged on what activities are protected. Some of the relevant cases that provide clarity on activities that are protected, include –

Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334, 1347 (Fed. Cir. 2007) : Pre-clinical in vivo or in vitro experiments, or clinical studies, with the possible exception of those studies that use patented “research tools”.

Intermedics, Inc. v. Venitritex, Inc., 755 F. Supp. 1269 (N.D. Cal. 1991), aff’d, 991 F.2d 808 (Fed. Cir. 1993) : Manufacture of patented items, most of which were used to generate data for the FDA.

NeoRx Corp. v. Immunomedics, Inc., 877 F. Supp. 202 (D.N.J. 1994) : Submission of data to foreign regulatory agencies, where data is also submitted to the USFDA.

Amgen, Inc. v. Hoschst Marion Roussel, Inc., 3 F. Supp. 2d 104 (D. Mass. 1998) : Use of patented product to develop alternative FDA-approved manufacturing process.

Abtox Inc. v. Exition Corp., 122 F.3d 1020 (Fed. Cir. 1992) : Class II medical devices, which are subject to FDA review, are subject to Safe Harbor.

Shire LLC v. Amneal Pharm., 802 F. 3d 1301, 1310 (Fed. Cir. 2015) : Safe Harbor protects third parties that supply API to generic filers to develop product for FDA filing.

It is also important to note that the following activities are not protected by the Safe Harbor–

Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 205-206 (2005) : Basic scientific research

Momenta Pharmaceuticals, Inc. v. Teva Pharmaceuticals U.S.A. Inc., 809 F.3d 610, 621 (Fed. Cir. 2015) : Post-approval testing of commercial batches that is routinely required by regulatory bodies.

Amgen, Inc. v. Hospira, Inc., 336 F. Supp.3d 333 (D. Del. 2018), aff’d, 944 F.3d 1327 (Fed. Cir. 2019) : Stockpiling of product in anticipation of launch.

A careful study and understanding of this issue is warranted so as to be able to steer clear of infringement, in an era that targets global commercialization.