Articles

By David J. Faye

A comparative analysis of the experimental use exception in the United States and the United Kingdom
The case studies presented in part I of this article are but two examples of the problems experienced in the plant biotechnology sector as a result of the increased patenting of research tools. Such difficulties hinder researchers’ abilities to engage in projects designed to improve the lot of subsistence farmers and agriculture in developing countries. As stated by the World Intellectual Property Organization,

Patents provide incentives to individuals by offering them recognition for their creativity and material reward for their marketable inventions. These incentives encourage innovation, which assures that the quality of human life is continuously enhanced. 1

However, the phenomenon now being experienced in the plant biotechnology sector is such that access to research tools that could assist in enhancing the quality of human life is substantially impeded. How can the need to encourage innovation be balanced with the need to conduct important, potentially life-saving research and disseminate the products of this research to those in need? One answer may lie in the patent system itself. As already described, limited exceptions to the patent-holder’s monopoly exist in order to allow for unauthorised application of the patent in particular contexts without the fear of infringement proceedings. One such exception which has been statutorily, or judicially, recognised by a variety of domestic patent regimes is that which pertains to experimental use. Although the content and scope of this exception differs between jurisdictions, the basic concept remains the same – unauthorised use of the patent for experimental or research purposes will not constitute infringement.

The experimental use exception in the United States
In the United States, patents are granted with a view to ‘promot[ing] the progress of science’. 2 While a statutory monopoly presumably meets this goal by providing an incentive to create, 3 the experimental use exception to the monopoly is directed toward the same objective:

In order to further promote innovation, the patent system has to limit the monopoly of patent owners so as not to hinder subsequent research and improvements on existing technology. Innovation stems from the free availability of existing technologies, including patented ones. 4 (original emphasis)

Despite its value in meeting the goals of the patent regime, the experimental use exception has been interpreted by American courts in a manner that has significantly narrowed its scope and rendered its availability uncertain. Notably, there have been no reported decisions wherein the experimental use exception has been considered specifically in the context of plant biotechnology. However, the exception applies indiscriminately to American patent law. Because many of the cases which have considered the exception fall within the sphere of biopharmaceuticals, the principles they describe remain relevant to the current discussion of plant biotechnology and research initiatives related to agriculture in developing countries.

The experimental use exception has not been codified in the United States. 5 Instead, scholars point to the early 19th-century cases of Whittemore v Cutter6 and Sawin v Guild 7 as precedents from which the exception originated. In Sawin, which referred to the Whittemore decision, Justice Story formulated a so called ‘two-pronged [experimental use] exception’: 8

This court has already had occasion to consider the clause in question, and upon mature deliberation, it has held that the making of a patented machine to be an offence within the purview of it, must be the making with an intent to use for profit, and not for the mere purpose of philosophical experiment, or to ascertain the verity and exactness of the specification. 9

In formally recognising the exception, Justice Story indicated that intent to profit would place an unauthorized activity beyond the realm of experimental use. The elements necessary to establish such an intention, however, are not discernible from the judgment.

The experimental use exception was applied in the years after Sawin, and the trend indicates that, as per Justice Story’s judgment, courts were generally reluctant to apply the experimental use exception in cases involving commercial gain. 10 In Roche Products, Inc. v Bolar Pharmaceuticals Co., Inc., 11 the Court of Appeals for the Federal Circuit was presented with an important opportunity to clarify the scope of the exception’s application. Roche held a patent on flurazepam hydrochloride, an active ingredient used in the manufacturing of its brand-name ‘Dalmane’ sleeping pills. Bolar, a generic drug manufacturer, imported the active ingredient from a foreign manufacturer in order to create a generic competitor to Dalmane which it could market immediately on expiry of Roche’s patent. Access to and use of flurazepam was necessary in order to obtain test results and data required for its application to the United States Food and Drug Administration. Although Bolar relied on experimental use to justify its unauthorised activities, Justice Nichols characterised the argument as a ‘liberal interpretation’ 12 of a ‘truly narrow’ 13 exception that the court declined to expand:

Bolar’s intended ‘experimental’ use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry… 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. 14

Although the result in the case was later overruled by a carefully crafted statutory exception for activities like Bolar’s in the generic pharmaceutical industry, 15 the judgment demonstrates the difficulty inherent in identifying a clear boundary between activities that are ‘commercial’ and those that are ‘experimental’. Bolar’s use of flurazepam included subjecting it to testing for purposes of deriving ‘stability data [and] dissolution rates’, 16 among others. However, the association of these activities with Bolar’s intention to create a generic drug was enough to constitute a profit motive and thus preclude operation of the experimental use exception.

In 2000, the Court of Appeals for the Federal Circuit pronounced upon the experimental use exception in Embrex, Inc. v Service Engineering Corp. 17 In this case, Embrex was the exclusive licensee of a patent which claimed methods ‘for inoculating birds against disease by injecting vaccines into a specified region of the egg before hatching’. 18 Embrex began designing machines that would implement the claims described in the patent. Service Engineering Corp. (‘SEC’) subsequently hired scientists to perform tests in the hopes that a method of inoculation could be derived which would make use of an area of the egg outside that specified in the patent in question. However, SEC’s efforts were in vain and it was unable to work around the patent claims. The Court of Appeals reiterated the ‘narrow confines’ of the experimental use exception as provided previously in Roche and ruled against SEC:

While SEC tries to cloak these tests in the guise of scientific inquiry, that alone cannot immunize its acts. The district court determined on the record before it that SEC performed the tests expressly for commercial purposes. 19

Despite demonstrating a continued willingness to acknowledge the existence of the experimental use exception, the judgment reinforces the notion that the exception is exceedingly narrow. In fact, one critic argues that SEC’s infringing activities were truly deserving candidates for the experimental use exception. 20 Not only did SEC attempt to avoid using the patented invention, but it also hired scientists to create an alternative technology which satisfied the same objectives. 21 In theory, this type of improvement and innovation should be encouraged by the patent system. 22

In the cases discussed to this point, the experimental use exception was invariably raised in the context of a dispute between two commercial competitors. While these pronouncements on the exception had direct implications for profit-minded firms, the situation was more ambiguous for non-profit organisations. In 2002, the Court of Appeals for the Federal Circuit released its judgment in Madey v Duke University. 23 Madey, a former Stanford professor, accepted a tenured position at Duke University wherein he would act as the director of a ‘free electron laser’ research laboratory. In his time at Stanford, Madey had been granted two patents on specific equipment used in the laboratory. Madey was eventually removed as director of the lab, but he asserted that Duke continued to use his patented inventions in the laboratory and he sued for patent infringement.

Even in the context of what would usually be considered academic use, the Court of Appeals determined that the experimental use exception did not apply. Just as prior authority held that use with commercial intent would not fall within the experimental use exception, the court here held that ‘[s]imilarly, our precedent does not immunize any conduct that is in keeping with the alleged infringer’s legitimate business, regardless of commercial implications’. 24 As a result, the Court reasoned that Duke’s conduct was not immunized because its sanctioning and funding of research projects (admittedly, with no commercial application) nonetheless furthered its business objectives. That is, Duke’s activities served ‘to increase the status of the institution and lure lucrative research grants, students and faculty’. 25 The experimental use exception was then stated in the following terms:

In short, regardless of whether a particular institution or entity is engaged in an endeavour 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. 26

Drawing such conclusions has led the Court of Appeals to reformulate the central consideration in Justice Story’s original conceptualisation of the experimental use exception. In essence, application of the exception no longer rests on whether the infringer had an intention to profit, but on a determination of whether the acts further the user’s legitimate business objectives. With the Supreme Court’s denial of certiorari, 27 the experimental use exception was rendered so narrow as to be virtually inapplicable for practical purposes. In fact, even some of those who refute the idea of an anticommons arising from extensive patenting of biomedical research tools admit that the ‘effective elimination’ of the experimental use exception in Madey may ‘undermine the informal exemption that … is important for open science’. 28

The experimental use exception in the United Kingdom
In contrast to the judicially-crafted experimental use exception in the United States, the exception in the United Kingdom is enshrined in section 60(5) of the Patents Act 1977: 29

• (5) An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if –
• (a) it is done privately and for purposes which are not commercial;
• (b) it is done for experimental purposes relating to the subject-matter of the invention …

Section 60 of the Patents Act 1977 mirrors Article 31 of the Community Patent Convention. 30 Both make explicit the distinction between commercial and non-commercial use which was also emphasised by the American judiciary in earlier cases. However, judicial interpretation of the experimental use exception in the United Kingdom has been relatively scarce. Indeed, in Europe at large and especially in relation to the intersection of biotechnology and the experimental use exception, case law is exceedingly sparse.31 While some guidance may be extracted from the few judgments which have been delivered in the United Kingdom, it is all too easy to limit their precedential value to the specific facts and patented technologies which gave rise to the dispute in question. Yet as with the series of American cases, none of which dealt explicitly with biotechnology or, more specifically, plant biotechnology, the courts’ consideration of the scope of the exception remains valuable in projecting its application to other fields.

In Monsanto Co. v Stauffer Chemical Co. and another, 32 an injunction had been issued against the defendant, Stauffer, which prohibited it from using or selling its herbicide, TOUCHDOWN. However, Stauffer sought to modify the injunction so as to permit it to carry out field trials and experiments involving TOUCHDOWN. Stauffer claimed that its proposed activities could not be regarded as infringement by reason of section 60(5)(b) of the Patents Act 1977. In the High Court, Falconer J disagreed:

The ‘experimental purposes’which render noninfringing an act otherwise an infringing act are limited to those ‘relating to the subject matter of the invention’. As a matter of language that limitation seems to me to restrict the paragraph to experiments directed to the patented invention as such, experiments such as testing whether a patented product can be made, or a patented article made to work, as described in the patent specification … [I]t seems to me that the limitation would exclude tests or trials having as their purpose achieving or extending the commercial acceptance of some commercial embodiment of the patented invention – such tests or trials would not, it seems to me, as a matter of language, be for purposes related to the subject matter of the invention. 33 (original emphasis)

On appeal, Dillon LJ took a different view and pointed to the textual differences between section 60(5)(a) and section 60(5)(b) as authority for the proposition that experimental use with a commercial purpose may still be considered noninfringing. Notably, Dillon LJ’s reading of the statute finds no ‘implicit "and"’ 34 between sections 60(5)(a) and 60(5)(b):

Mr Gratwick urges that the words in section 60(5)(b) ‘relating to the subject-matter of the invention’ ought to be narrowly construed so as to exclude experiments directed to the commercial exploitation of the invention. For my part, however, I find it difficult to draw any such hard and fast line. The distinction between the wording of sub-head (a) and the wording of sub-head (b) in section 60(5) indicates that experimental purposes in sub-head (b) may yet have a commercial end in view, as do all the activities of companies such as the parties to this dispute. 35

Although the court varied the injunction so as to allow trials to be carried out by Stauffer on its own premises, Dillon LJ found that section 60(5)(b) was not so broad as to encompass trials conducted by third parties and on lands other than the defendant’s premises. Further, despite Dillon LJ’s finding that ‘[t]rials carried out in order to discover something unknown or to test a hypothesis or even to find out whether something which is known to work in specific conditions … will work in different conditions’ were validly classified as experiments, he also determined that section 60(5)(b) did not apply to trials that were intended to ‘demonstrate to a third party that a product works or, in order to amass information to satisfy a third party … that a product works as its maker claims or not’. 36

In 1997, the English courts again had occasion to consider the application of the exception. In Auchincloss and another v Agricultural & Veterinary Supplies Ltd and others, 37 the dispute concerned the apparently unintentional manufacture and sale of the plaintiff’s patented ‘dry biocidal composition’. The defendants had manufactured their own dry biocidal composition, but contaminants in the ingredients resulted in the creation of a composition that was covered by the claims of the plaintiff’s patent. After producing this infringing composition, the defendants had submitted a sample to the Ministry of Agriculture, Fisheries and Food (MAFF) for purposes of obtaining approval, and argued that such use was covered by section 60(5)(b) because these were considered experiments that related to the subject-matter of the invention. The Patents Court disagreed, and found that ‘[m]aking (and indeed experimenting) merely for the purpose of getting an official approval is not a defence under section 60(5)(b)’. 38

On appeal to the English Court of Appeal, 39 Aldous LJ reviewed the conclusions in Monsanto and concurred with the finding of the Patents Court in rejecting the applicability of section 60(5)(b):

In Monsanto … Dillon LJ drew a distinction between trials that were experimental, and therefore fell within the subsection, and those which were designed to obtain statistics to further exploitation …[In the current case, the] sample was made for and provided to MAFF to obtain official approval; not to discover something unknown or to test a hypothesis. I conclude, as the judge did, that the manufacture and supply to MAFF … was not done so for experimental purposes and therefore section 60(5)(b) does not apply. 40

Aldous LJ went further to examine the concept of the ‘subjectmatter of the invention’ in the context of section 60(5)(b), and reiterated his conclusions from the case of Smith Kline & French Laboratories Ltd v Evans Medical Ltd: 41

At 523 I said that ‘if an act is to fall within subsection (5)(b) it must be done for purposes relating to the subject-matter of the invention found in the claims alleged to be infringed’. I went on to point out that the words of the subsection suggest that some acts done for experimental purposes do not have the required relationships. I concluded that ‘the purposes must relate to the claimed subject-matter of the patent in suit in the sense of having a real and direct connection with that subject-matter’ … If the sample sent to MAFF had been produced during genuine experiments and been used for such experiments, I would have concluded that such experiments were done in relation to the subject matter of the invention …42

Scholars have suggested that Aldous LJ’s reasoning would permit the submission of trial results to regulatory authorities under section 60(5)(b), ‘provided that such trials really are experimental’. 43 However, the fact that the correctness of this suggestion remains in doubt underscores another of the obvious differences between American and English law in relation to experimental use, infringement and regulatory approval: the United States has codified the Bolar exception, though the United Kingdom has yet to follow a similar path.

Moreover, scholars assert that Aldous LJ’s conclusions regarding the ‘subject-matter of the invention’ provide little guidance for those engaged in the use of biotechnology related research tools:

There are … some types of ‘research tool’ where the very nature of what is meant by the ‘subject-matter of the invention’ is inherently problematic in that very little use can be envisaged for the invention (if invention it be) other than ‘experimental purposes related to [its] subject-matter’. The leading current example in Europe is applications for patents for short DNA sequences … of unknown biological utility and too short to constitute a gene coding for a protein … It would be strange and contrary to the underlying rationale for the patent system, if an invention which could only be used for further research, research which in effect sought to improve on it, could be used to block such further research. 44

But interpretation of Aldous LJ’s reasoning is further complicated by the fact that the current expansive ambit of research tools does not conform with the narrow interpretation offered above. As described in Part I, one researcher’s end product is often another’s research tool. With the recognition that research tools are valuable products in their own right, a market has emerged for their purchase and sale. In this light, it is unclear whether and to what extent Aldous LJ’s reading of ‘subject-matter of the invention’ would differ.

Given the lack of jurisprudence in the United Kingdom on the experimental use exception, disharmony with American law on the same subject, and uncertain application of the current law to specific fields like plant biotechnology, it is obvious that clarification is required. Indeed, the United Kingdom’s Royal Society itself made the following recommendation: ‘It would be conducive to the development of science if the position of scientific work under these exemptions was clearer … We recommend that governments consider clarifying and harmonising the existing exceptions for "private and non-commercial" and "experimental" use.’ 45

Application of the experimental use exception to plant biotechnology
Clearly, the lack of jurisprudence in the United Kingdom on the statutory experimental use exception leads to the same uncertainty which is found in the judicially-crafted exception in the United States. That is, given the narrow ambit of the exception in the United States and the ambiguous phraseology of the UK exception, it is unclear in both jurisdictions when, how and to what extent a party may rely upon the exception as a defence to patent infringement.

Nonetheless, it is clear that in the United States, judicial interpretation of the experimental use exception has moved away from a pure profit/non-profit appraisal and towards determining whether, in the circumstances, the acts in question further the user’s legitimate business objectives. In the United Kingdom, the statutory distinction between experiments carried out for commercial purposes (section 60(5)(b) of the Patents Act 1977) and those which are done for non-commercial purposes (section 60(5)(a)) does not act as an automatic bar to use of the exception. As noted earlier, the Court of Appeal in Monsanto allowed Stauffer to carry out trials itself and on its own lands despite the fact that the trials potentially had commercial ends. This is in stark contrast to the position in the United States where, unless the experiments fell within the ambit of the Bolar exception for purposes of gaining regulatory approval, any commercial taint to experimentation would place it beyond the scope of the experimental use exception.

Nonetheless, the current ambiguous state of the experimental use exception invites proposals for modification. While recognising that a modified exception could reduce incentives to develop research tools in the first place, two factors militate in favour of such a proposal: first, the scope of any modification would be limited to projects in the plant biotechnology sector directed toward improvement of agriculture in developing countries; and secondly, the combination of broad biotechnology patent claims and patents on basic research tools may imply that a more liberal interpretation of experimental use is required for biotechnology. 46

For purposes of the current discussion, the plant biotechnology sector is in need of a solution that would allow researchers to make use of patented research tools to develop technologies and distribute them to poor countries and subsistence farmers without undue worry as to the underlying intellectual property rights, and without the need for costly or time-consuming negotiations. In this respect, three potential initiatives are explored: (a) mandated application of the experimental use exception to certain situations where the patent owner fails to work their invention; (b) integration of the breeders’ exemption, which currently exists in the plant variety protection regime, into patent law; and (c) strategic selection of jurisdictions for research.

Mandated application of the experimental use exception to certain situations where the patent-owner fails to work their invention
The global area of transgenic crops increased by double digits for the seventh consecutive year in 2003. 47 However, biotechnology research in relation to crops tends to focus on those projects which will generate a substantial return on investment. Unfortunately, this means that the specific needs of farmers in developing countries are often overlooked:

For commercial reasons, richer farmers are likely to be the main target market for most privately funded plant biotechnology research. The many resource poor farmers in developing countries who depend on an income of less than $1 per day are not likely to be a near term target market for most of the agricultural biotechnology companies … For the private sector, poorer farmers and consumers are by definition not a lucrative market and are unlikely to exert any effective ‘demand pull’ on the private sector research agenda. 48

Accordingly, in many cases, biotechnology companies are unlikely to make use of their patented research tools for initiatives which are of greatest need to the poor. In fact, the International Federation of Agricultural Producers (IFAP) has recognised concerns that traditional crops in developing countries are being neglected by research laboratories and commercial companies because farmers would not be able to afford the new varieties. 49 At the same time, organisations like the CGIAR which do undertake such research are severely underfunded and lack the resources to bargain effectively for the variety of patented research tools required for their projects.

One proposal to ameliorate this situation would involve the introduction of an interpretative or textual modification to the experimental use exception which would take into consideration the exploitation of the patented research tool. Certainly, the modification would not (and should not) apply to all situations where a required patent is not practised by the patentee. Instead, any amendment would be limited to situations where the patent-owner has failed to exploit their patent in relation to ‘certain unprofitable "public good" type situations e.g. for improvement of non-commercial subsistence crops or for less lucrative markets’. 50

Apart from the projected scope of this modification, significantly reduced funding for research institutions carrying out these projects means that the proposal also differs from compulsory licensing in terms of remuneration. The modified exception would allow for use of patented research tools in the development of new end products. But any required remuneration flowing from patent claims which would extend to these products (whether by incorporation of the patented technology into the end product or by reach through royalty provisions) would be minimized or eliminated. Ideally, if the patentee has no intention of practicing their patent in a market or in relation to a product that will bear little or no return, those who do operate in that market for humanitarian and development purposes would not be expected to bear potentially heavy licensing or transaction costs.

The corresponding reduction in project expenses and negotiation time would decrease not only the period within which new products would reach subsistence farmers and developing countries, but also the cost of the end product. In the context of the case studies previously described, this proposal would have had the effect of accelerating the introduction of Golden Rice to its intended beneficiaries. Moreover, it would also have contributed to earlier project development using the Xa21 gene by circumventing the effects of exclusive licensing, which forced protracted negotiations in the first place.

While the concept is a simple one, the prospect of successfully mandating application of the experimental use exception to certain situations in plant biotechnology where the patent-owner fails to work their invention would require widespread acceptance on an international scale. Moreover, it is likely that industry would mount a vigorous opposition to any such proposal. But the application of the experimental use exception to a specific sector like plant biotechnology does not tread upon new and uncertain legal territory. As described previously, in response to lobbying from the generic pharmaceutical industry, the United States Congress reversed the law as stated by the Court of Appeals for the Federal Circuit and created an exception to patent infringement that allows generics to carry out trials for purposes of developing and submitting drug information for regulatory approval. Accordingly, precedent for this type of development exists. It remains for law- and policy-makers to weigh the resultant benefits and drawbacks to determine whether such an approach is suitable for the plant biotechnology field.

Integration of the breeders’ exemption, which currently exists in the plant variety protection regime, into patent law
Given the development of sui generic protection regimes for plant varieties, another suggestion might involve adopting the corresponding experimental use exception from one of these regimes for application to the patent system. As discussed in Part I, the scope of research tools in plant biotechnology is very wide and can include anything from a gene sequence to a full transgenic plant. Accordingly, while this proposal would not remedy access to the full range of research tools, it could improve access to plants for agricultural research projects.

Section 114 of the American Plant Variety Protection Act51 presents its exception in the following terms:

The use and reproduction of a protected variety for plant breeding or other bona fide research shall not constitute an infringement of the protection provided under this Act.

The research exception offered by the United Kingdom’s Plant Varieties Act 1997 52 varies only minimally from the exception already offered by the United Kingdom’s patent system:

Plant breeders' rights shall not extend to any act done –

• (a) for private and non-commercial purposes,
• (b) for experimental purposes, or
• (c) for the purpose of breeding another variety.

Both the US and the UK plant variety research exceptions exclude from the scope of infringement those acts done for the purpose of breeding another variety. While such a development may seem particularly suitable to redress those problems that have arisen in the plant biotechnology sector, scholars caution against its wholesale application for a number of reasons.

First, despite the fact that the patent and plant variety protection regimes apply to similar subject matter, the bargain struck between the rights-holder and the public is not the same – specifically, patents require a greater disclosure and provide greater protection than plant variety protection.53 Secondly, plant variety protection applies to a specific plant variety whereas patent protection does not limit inventors to ‘specific preferred embodiments’. 54 Thirdly, the plant variety protection regime includes other exceptions and limitations which are not found in the patent system, such as provisions relating to a farmer’s ability to save seed. 55 Finally, administrative concerns would hinder integration of any such exception into the patent system:

[A]ttempting to inject the PVPA [Plant Variety Protection Act] experimental use provision into the utility patent regime is administratively more complex than it would appear on the surface. A PVPA certificate includes no claims defining the scope of the grant; the grant is monolithic, and the experimental use exception derogates from that monolithic grant. By contrast, in the utility patent regime, individual claims define the scope of the grant, and any experimental use exception derogates from the individual claims. 56

While the proposal seems to raise its share of difficulties, some of these obstacles arise from the fact that the plant variety protection system is relatively new in relation to the patent system. Questions concerning the interoperability of the two systems must first be resolved before the prospect of integrating the systems’ respective experimental use exceptions can be considered a viable endeavour.

Strategic selection of jurisdictions for Research
While the previous proposals would require a concerted effort to bring about necessary change, research centres can also reduce the obstacles associated with multiple patented research tools by examining two particular strategic considerations:

• (1) Patent applications are not filed on a worldwide basis, and often the jurisdictional scope of the patentee’s filing is not as wide as might be expected. Research centres can determine the jurisdiction in which the least number of research tool patents have been granted that would potentially affect the viability of the research project.
• (2) As illustrated above, the scope and availability of the research exception differs from state to state. While the exception is severely restricted in some countries like the United States, others are more liberal in their interpretation. Determining whether and to what extent a particular country recognises a research exception is a worthwhile practice.

By basing projects in the jurisdiction which represents the optimal combination of these two factors, research centres may substantially reduce the difficulties arising from excessive patenting of research tools. Notably, however, exploitation of any end products developed over the course of these projects may depend on patents granted in countries where the product will be disseminated.

Despite the difficulties inherent to each proposal’s effective implementation, these suggestions serve to highlight practical considerations that will require resolution as the experimental use exception evolves. Of course, those proposals directed toward a modified experimental use exception to patent infringement could also fall foul of the international community’s obligations pursuant to the TRIPs Agreement57. In particular, the combination of TRIPs Articles 27(1) and 28(1) raises questions as to the acceptability of extensions to experimental use. 58

In light of these obstacles, it is prudent to consider whether, pursuant to TRIPs Article 30, a plant-specific modification to the experimental use exception would be permitted. The WTO’s Dispute Settlement Body, in Canada – Patent Protection of Pharmaceutical Products, 59 adopted a Panel Report which applied a three-step test derived from the text of Article 30 to determine whether an exception was appropriate.

The exception must be a limited exception

In the Panel’s view, a ‘limited exception’ is ‘one which makes only a small diminution of the rights in question’. 60

Accordingly, any limitation is seemingly to be judged from the perspective of the patentee. A modification to the experimental use exception, as presented in the first two proposals above, would be specific to plant biotechnology and intended for those projects directed toward agricultural initiatives and subsistence farming in developing countries. Nonetheless, given the desired dissemination of technologies developed over the course of research projects, it is likely that this would be seen as more than a limited exception to the rights of the patentee.

The exception must not unreasonably conflict with a normal exploitation of the patent

According to the Panel, the ‘normal practice of exploitation by patent owners, as with owners of any other intellectual property right, is to exclude all forms of competition that could detract significantly from the economic returns anticipated from a patent's grant of market exclusivity’.61 In relation to the first two proposals above, a modified exception is unlikely to lead to a substantial reduction in economic returns because of the nature of the projects in question. As explained previously, patent-holders are unlikely to be interested in exploiting their patents due to the unprofitable nature of the research involved. Thus, it may be that the proposals would not necessarily fall afoul of this step of the test.

The exception must not unreasonably prejudice the interests of the patent-owner, taking account of the legitimate interests of third parties

‘Legitimate interests’ was defined by the Panel as ‘a normative claim calling for protection of interests that are "justifiable" in the sense that they are supported by relevant public policies or other social norms’.62 Any analysis would require a balancing of the interests of the patent- owner and the legitimate interests of researchers, developing countries and subsistence farmers who require access to modern developments in plant biotechnology. Obviously, the considerations inherent to weighing public policy choices are multi-faceted, and it is impossible to predict a Dispute Settlement Body’s eventual conclusions. While it appears that a modified experimental use exception would have some difficulty in satisfying an Article 30 test, there is enough ambiguity to suggest that such a proposal may meet with some success. In the meantime, research centres may wish to review the pragmatic considerations espoused in this section.

Conclusion
While the patent system is often justified as a means of fostering innovation, the system itself can potentially hinder the very progress it seeks to encourage. A variety of factors can contribute to this state of affairs: the development of new technologies which test and strain the traditional boundaries of patentability; the grant of numerous patent rights in scarce resources; the introduction of legislative and policy efforts directed toward commercialising the results of public and private research; and the apparent validity of over-broad patents which cover basic research tools and technologies required for future scientific initiatives.

Although the evidence seems to paint a contradictory picture of whether or not these factors are enough to bring about an anticommons in scientific research, empirical data cannot be taken to point conclusively in either direction. Indeed, given the wide scope of materials that may constitute research tools, and increased patenting activity in the biotechnology sector, the research landscape has become both difficult and dangerous to navigate.

Difficulties have become apparent in the field of plant biotechnology, 63 specifically in relation to research projects aimed at agriculture in developing countries. Yet any suggestion that the patent regime as a whole will undergo extensive reform in order to redress its perceived inadequacies is probably misplaced. Instead, application of underused or ambiguous aspects of the patent regime may contribute to forming the foundation for a workable solution. The experimental use exception is one such aspect of patent law which may be further explored as a means of facilitating change. Indeed, while the exception has been confined to a very narrow sphere of use in some jurisdictions like the United States, this is by no means an international standard.

Legislators and the judiciary would do well to heed calls for clarification; however, any reformulation of the experimental use exception for plant biotechnology should take into account the challenges faced by science as a whole. A renewed focus on the exception could provide the appropriate means to effectuate improvements to agricultural initiatives in developing countries, but only if these improvements are accompanied by progress in the climate for scientific research in general as well.

References

1) World Intellectual Property Organization, ‘Why are Patents Necessary?’ WIPO (accessed 1 January 2003).

2) U. Constitution, Article I § 8.

3) See R.S. Eisenberg, ‘Patents and the Progress of Science: Exclusive Rights and Experimental Use’, 56 U. Chi. L. Rev. 1017, in which the author canvasses competing theories which attempt to rationalise the manner in which the patent system encourages scientific progress.

4) P. Ducor, ‘Research tool patents and the experimental use exemption – a no-win situation?’ 17 Nature Biotechnology (October 1999) 1027 at 1027.

5) Several proposals for codification of the experimental use exception have come before Congress in the past. For example, in A bill to amend Title 35 of the United States Code relating to animal patents (HR 4970, § 2, 100th Cong., 2d Sess. (1988)), an exception was suggested for transgenic animals which would have allowed ‘research or experimentation without any commercial intent or purpose’. Later, Congress failed to enact the Patent Competitiveness and Technological Innovation Act of 1990 (H.R. 5598, § 402, 101st Cong., 2d Sess. (1990)) which would have provided that ‘[i]t shall not be an act of infringement to make or use a patented invention solely for research or experimentation purposes unless the patented invention has a primary purpose of research or experimentation’. See ‘Duke University v John M.J. Madey: Brief for the United States as Amicus Curiae’ at 16 - 17, US Department of Justice (accessed 21 April 2004).

6) 29 F.Cas. 1120, C.C.Mass. 1813 (‘Whittemore’).

7) 21 F.Cas. 554, C.C.Mass. 1813 (‘Sawin’).

8) M.D. Janis, ‘Sustainable Agriculture, Patent Rights and Plant Innovation’, 9 Ind. J. Global Legal Stud. 91 at 106 to 107.

9) Sawin, Note 7 above, at 555.

10) J.M Mueller, ‘No Dilettante Affair: Rethinking the Experimental Use Exception to Patent Infringement for Biomedical Research Tools’, 76 Wash. L. Rev. 1 at 21.

11) 733 F.2d 858, C.A.Fed., 1984 (‚Roche’).

12)Ibid. at 862.

13)Ibid. at 863.

14)Ibid.

15) In 1984, the United States Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98–417, 98 Stat. 1585, also referred to as the ‘Hatch-Waxman Act’. The exception was enshrined in section 271(e)(1) of Title 35 of the United States Code. This section reads: ‘It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.’

16) Roche, Note 11 above, at 860.

17) 216 F.3d 1343, C.A.Fed. (N.C.), 2000 (‘Embrex’).

18) Ibid. at 1346.

19) Ibid. at 1349

20) Mueller, Note 10 above, at 29.

21) Ibid.

22) Ibid.

23) Madey v Duke University, 307 F.3d 1351, C.A.Fed. (NC), 2002.

24) Ibid. at 1362.

25) Ibid.

26) Ibid.

27) 123 S.Ct 2639 (Mem), US, 2003.

28) J.P. Walsh et al., ‘Working Through the Patent Problem’, 299 (5609) Science (14 February 2003).

29) 1977, c. 37.

30) Agreement Relating to Community Patents, [1989] OJ L401/1.

31) T.M. Cook, ‘Experimental Use as an Exception to Patent Infringement’, [1998/1999] 5 BSLR 167 at 173.

32) [1985] RPC 515 (CA) (‘Monsanto).

33) Ibid. at 522.

34) The existence of such an ‘implicit "and’’’ between sections 60(5)(a) and 60(5)(b) has been suggested by some commentators. See, for example, Australian Advisory Council on Intellectual Property, ‘Patents and Experimental Use: Issues Paper (February 2004)’ at 4: ACIP See, for example, Australian Advisory Council on Intellectual Property, ‘Patents and Experimental Use: Issues Paper (February 2004)’ at 4: ACIP (accessed 28 May 2004).

35) Monsanto, Note 32 above, at 538.

36) Ibid. at 542.

37) [1997] RPC 649 (‘Auchincloss’).

38) Ibid. at 682.

39) [1999] RPC 397 (‘Auchincloss (CA)’).

40) Ibid. at 405.

41) [1989] FSR 513 (‘Smith Kline’).

42) Auchincloss(CA) Note 39 above, at 405 to 406.

43) Cook, Note 31 above, at 170.

44) Ibid. at 174.

45) The Royal Society, ‘Keeping science open: the effects of intellectual property policy on the conduct of science’ (April 2003) at paragraph 3.23: (accessed 27 April 2004).

46) D. Gilat, ‘Experimental Use and Patents’, IIC Studies Vol. 16 (Munich: Max Planck Institute for Foreign and International Patent, Copyright and Competition Law, 1995) at 83.

47) C. James, ‘Global Status of Commercialized Transgenic Crops: 2003’, ISAAA Briefs: (accessed 15 May 2004).

48) C. Spillane, ‘Recent Developments in Biotechnology as they Relate to Plant Genetic Resources for Food and Agriculture’, Commission on Genetic Resources for Food and Agriculture, Background Study Paper No. 9, at 5 to 6, online: FAO (accessed 11 March 2004).

49) International Federation of Agricultural Producers (IFAP), ‘Farmers and Biotechnology: 1998 World Farmers’ Congress Report’ at paragraphs 21 and 55: IFAP (accessed 15 March 2004).

50) Spillane, Note 48 above, at 41.

51) PVP Act, Pub L. 91–577, 24 December 1970, 84 Stat. 1542–1559.

52) PV Act, 1997, c. 66.

53) M.D. Janis, ‘Sustainable Agriculture, Patent Rights and Plant Innovation’, 9 Ind. J. Global Legal Stud. 91 at 110 to 111.

54) Ibid. at 112 to 113.

55) See, for example, section 113 of the American PVP Act and section 9 of the English PV Act.

56) Janis, Note 53 above, at 115.

57) Agreement on Trade-Related Aspects of Intellectual Property Rights, being Annex 1C to the Final Act and Agreement Establishing the World Trade Organization, 15 December 1993, 33 ILM 81.

58) Janis, Note 53 above, at 116.

59) World Trade Organization, Decision WT/DS114/R, 17 March 2000: WTO (accessed 11 March 2004).

60) Ibid. at paragraph 7.30.

61) Ibid. at paragraph 7.55

62) Ibid. at paragraph 7.69.

63) Farmers have also begun to feel the effects of patents in plant biotechnology. In the recent case of Monsanto Canada Inc. v Schmeiser, 2004 SCC 34, the patent in question claimed protection for genes and modified cells, as opposed to a genetically modified plant. Schmeiser planted seed, and harvested and sold plants containing the patented cells and genes. The Canadian Supreme Court found these actions to constitute infringement. These issues are likely to affect subsistence farmers in the future as well.

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