Study of limitations of the effects of a patent right in Japan (Article 69 (1) of the JPL)

Study of limitations of the effects of a patent right in Japan (Article 69 (1) of the JPL) - Scope of “Experiment or Research”

1. Outline

Article 68 of the Japan Patent Law (JPL) provides “A patentee shall have an exclusive right to work the patented invention as a business”.  Article 69(1) of the same law provides “The effects of the patent right shall not extend to the working of the patent right for the purposes of experiment or research”.  The purpose of Article 69(1) is “to encourage inventions by promoting their protection and utilization as to contribute to the development of industry” (Article 1).  That is, if a patent right were effective against the experiment or research use intended for the development of technologies, it would impede “the development of industry”.  To balance the patentee’s interest and the public one, Article 69(1) defines the experimental or research use exception.

The development of new pharmaceutical products often requires the considerable time and expenditure.  For the development, especially for the development of another version of the drug (generic drug) by generic drug manufacturers, the experiment or research is necessary based on other person’s patented invention (e.g. patented chemical compounds).  To market the generic drug immediately after the original patent expired, the experimental use and activities by working other person’s patented invention are necessary for generic drug manufactures to obtain the market approval (approval for manufacture and sale of pharmaceutical products) on a clinical test of generic drugs based on the patented invention that are still under patent protection (before expiration of the patent term).

‘What is the scope of the experiment or research?’ and ‘How to interpret the working “as a business”?’ have come into question about “the experimental use and activities” by generic drug manufactures as mentioned above.

2. Theory

According to one of cogent theories[1], the scope of “experiment or research” exempted under Article 69(1) of the JPL has been narrowly interpreted, wherein the scope of “experiment or research” should be decided depending on its subject (limited to the patented invention itself) and purpose, and “experiment or research” should be regarded as falling within such a scope when its purpose is limited to “progress of technologies”[2].

Thus, the theory teaches, because the purpose of “the experimental activities” by generic drug manufactures set forth above is not deemed to be “progress of technologies”, but for obtaining an approval for manufacture and sale of generic drugs, it cannot be said that those activities by working other person’s patented invention for such purpose are regarded as falling within the scope of “experiment or research” exempted under Article 69(1).

3. Analysis of case law

Japan Supreme Court Judgment (1998 (Ju) No. 153, April 16, 1999) is a landmark precedent which held that the working of a patented invention on a clinical test for obtaining an approval for manufacture and sale of generic products falls under “experiment or research” exempted under Article 69(1) of the JPL.  This holding does not provide the interpretation of “experiment or research”, but focuses on the meaning of protection by a patent right (balance between the patentee’s interest and the public interest).  That is, if the clinical test (experiment) is not permitted during the patent term, the third party will be unable to work the invention for a considerable period of time even after the expiration of the patent term.  This will result in the same effect such that the duration of a patent right be extended for a considerable period of time, and this effect will be against the meaning of protection by the patent right.

This judgment is made based on the regulation of the Pharmaceutical Affairs Law, and the scope of “experiment or research” exempted under Article 69(1) of the JPL is construed to extend to the patented inventions on drugs, quasi drugs, cosmetics with ingredients specified by the Minister of Health, Labor and Welfare, or medical devices for which approval of production under Article 14(1) of the Pharmaceutical Affairs Law is required.  In addition, it is construed to the patented inventions on agrichemicals for which registration under Article 2(1) of the Agricultural Chemicals Regulation Law is required.

4. Scope of exemption by reference to “Bolar-provision”

In Roche[3], the holding is that the scope of exemption does not apply if the experiments are conducted with an intent to adapt the patented invention to the experimenter’s business[4].  In other words, the working of other person’s patented invention for the approval (by the FDA) of manufacture of pharmaceutical products will fall under the patent infringement.  As a legal resolution, not to regard such working as falling under the patent infringement, shortly after the Roche case was decided, the congress did pass a law (the Drug Price Competition and Patent Term Restoration Act, known as the Hatch-Waxman Act), permitting use of patented products in experiments for the purpose of obtaining FDA approval.  Based on the Hatch-Waxman Act, an express provision that the experiments on a clinical test for obtaining FDA approval of the generic drugs shall not be regarded as an act of infringement, has been added to the Patent Law (35 U.S.C. Section 271(e)(1), so-called “Bolar-provision” or “Safe-harbour provision”).  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 . . . 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.  The scope of exemption of said “Bolar-provision” refers to a Federal Law that regulates “drugs”.

In Eli Lilly[5], the Supreme Court held that the scope of exemption by “Bolar-provision” also applies to the medical devices that are subject to FDA approval.  That is, the Supreme Court held that Section 271(e)(1)’s exemption from infringement extends to all uses[6] of patented inventions that are reasonably related to the development and submission of any information under the FDA.

In Eli Lilly, the holding is to maintain two adjustments in 1984 Act, one adjustment is Section 156 patent term extension to reduce distortions caused by the FDA approval process[7] and compensate patentees for loss of patent term because of delays in FDA regulatory approval.  The second adjustment is “Bolar-provision” as mentioned above.  By the maintenance of two adjustments, the scope of exemption of “Bolar-provision” applies to the medical devices because the medical devices have already been the subject to the patent term extension under Section 156.

In Integra Lifesciences[8], on appeal, the CAFC's decision limited the exemption (“Safe-harbor”) provided by Section 271(e)(1).  There, the CAFC affirmed a lower court's holding that the exemption does not apply to some pre clinical activities for identifying and developing new drugs, even if some of the drugs will eventually be subject to FDA approval.

5. Comparison with the scope of exemption by “Bolar-provision”

The subject to the approval of the Pharmaceutical Affairs Law in Japan is limited to drugs, quasi drugs, cosmetics with ingredients specified by the Minister of Health, Labor and Welfare, or medical devices.  On the other hand, the subject to the FDA approval is tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs (medications), vaccines, biopharmaceuticals, blood transfusions, medical devices, electromagnetic radiation emitting devices (ERED), veterinary products, and cosmetics.

The subject to the patent term extension under Article 67bis of the JPL is pharmaceutical products only (not including medical devices) among those being subject to the approval under Article 14(1) of the Pharmaceutical Affairs Law.  On the other hand, the subject to the patent term extension under Section 156 is drugs and medical devices.

As compared above, the medical devices are covered by two adjustments (mentioned above) in the U.S.A. and this means that the medical devices are subject to the FDA approval and also subject to the patent term extension.  However, in Japan, the medical devices are not covered by two adjustments between Article 14(1) of the Pharmaceutical Affairs Law and Article 67bis of the JPL.  Therefore, the medical devices are subject to the approval of the Pharmaceutical Affairs Law, however the same are not subject to the patent term extension under Article 67bis of the JPL.

In Japan Supreme Court Judgment (1998 (Ju) No. 153, April 16, 1999), the scope of “experiment or research” exempted under Article 69(1) of the JPL is construed to extend to the patented inventions on drugs, quasi drugs, cosmetics with ingredients specified by the Minister of Health, Labor and Welfare, or medical devices for which approval of production under Article 14(1) of the Pharmaceutical Affairs Law is required.  In view of case law, there is a possibility in Japan that the medical devices become subject to the patent term extension in order to reduce distortions caused by the approval process on the medical devices. 

6. Other issues relating to medical devices

However, some other solution will have to be found to deal with medical devices.  That is, a medical device is a product which is used for medical purposes in patients, in diagnosis, therapy or surgery.  In the U.S.A., a medical device and a method for actuating the medical device such as a method for actuating MRI diagnostic device can be protected as a medical method invention that is patentable.

On the other hand, in Japan, the medical method[9] inventions are not patentable.  That is, the method of treatment of the human body by using a patentable medical instrument and pharmaceutical product is also considered as an industrially inapplicable invention.  As regards the medical devices used for medical purposes, whether the method for controlling the operation of medical device is patentable or not had been much debated in Japan.  In recent years, the Japan Patent Office has revised the Examination Guidelines, and the scope of protection available to the medical devices has gradually been broadened and whereby the method for controlling the operation of medical device is not considered as the medical method.  In latest revision (2009), the method for collecting various data from a human body excluding diagnostic processes[10] is not considered as the medical method, but included in the scope of the invention being patentable.  In view of huge medical device market in Japan (market worth is now estimated at about 2.5 trillion JPY/year) which the U.S. medical device manufactures have swept with their products and in view of the practical application of iPS cells in the near future, there have been loud calls from the major trade associations[11] in Japan for patenting the medical methods including the medical devices to be protected by the way of using them for medical purposes in opposite to the Japan Medical Association.

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by R. Enomori

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[1] Keiko Someno, “Working of a Patented Invention for Experiments or Research”, AIPPI, Vol. 33, No. 3, 5 (1998)

[2] patentability research, function research, experiment for improvement or development of the invention

[3] Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858, 221 USPQ 937 (Fed.Cir. 1987)

[4] Bolar’s experiments had a business purpose because Bolar intended to sell its generic product in competition with Roche’s Valium after patent expiration.

[5] Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 15 USPQ2d 1121 (1990)

[6] The "reasonably related" language of 271(e)(1) has also been interpreted more broadly than implied by the legislative history to cover a range of activities having purposes beyond just FDA approval, such as trade show demonstrations and the distribution of clinical data to parties besides the FDA. (see, e.g., Teletronics Pacing Systems, Inc. v. Ventritex, 982 F.2d 1520, 1524, 1526 (Fed. Cir. 1992))

[7] The scope of exemption of “Bolar-provision” shall apply to all products for which the patent term extension is obtained under the Hatch-Waxman Act.

[8] Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003)

[9] methods for treatment of a human body by surgery or therapy and diagnostic methods practiced on a human body

[10] e.g., NMR examination methods, X-ray examination methods, methods for measuring blood pressure (however, please note that if the collected sample is returned to the human body, it is a medical method and is therefore excluded from patentability.)

[11] Nippon Keidanren (Japan Business Federation) , The Japan Pharmaceutical Manufacturers Association (JPMA), Japan Bioindustry Association, etc.