Treading Carefully: How to Navigate the Common Law Research Exemption and the Hatch-Waxman Safe Harbor

When exploring exemptions to patent infringement, there are several key U.S. Court of Appeals for the Federal Circuit cases to be aware of. First, we will examine a number of cases that have shaped the contours of the common law experimental use exemption, which applies to all industries, and secondly, we will look at recent decisions evaluating activities under the safe harbor of 35 U.S.C. § 271(e)(1) for products requiring U.S. Food and Drug Administration (“FDA”) approval.

I.  The Common Law Experimental Use Exemption: A Narrow and Risky Defense

The common law experimental use exemption to patent infringement is particularly narrow, offering little protection to entities engaged in scientific research. Since being defined in the infamous 1984 case, Roche Prods. v. Bolar Pharm. Co., 733 F.2d 858 (Fed. Cir. 1984), the exemption has been strictly limited to only exclude uses for the “sole purpose of gratifying a philosophical taste, or curiosity, or for mere amusement.” The exemption is not available for uses that have any “definite, cognizable, and not insubstantial commercial purpose[]”or that are performed “in furtherance of the alleged infringer’s legitimate business.” Madey v. Duke University, 307 F.3d 1351, 1361-62 (Fed. Cir. 2002). Even uses that are undertaken under the “guise of scientific inquiry” can fall outside the scope of the exemption if they have the “slightest commercial implication” on the accused infringer’s business. Embrex, Inc. v. Serv. Eng’g Corp., 216 F.3d 1343, 1349 (Fed. Cir. 2000) (concurring opinion). Likewise, a use that is “in keeping with the legitimate business of the alleged infringer” does not qualify for the exemption, even if the use is not performed for commercial gain.

The limited availability of the experimental use exemption has grave implications for companies that are engaged in different stages of scientific inquiry. Perhaps most significant, and in stark contrast to the statutory safe harbor exemption available under 35 U.S.C. § 271(e)(1), the common law exemption does not weigh whether the use is for the purpose of obtaining regulatory approval. To the contrary, such uses are evidence of an eventual commercial purpose, potentially undermining reliance on the exemption as a defense to patent infringement. Below, we provide an overview of the most significant Federal Circuit cases that have analyzed the contours of the common law experimental use exemption in recent decades.

Roche Products, Inc. v. Bolar Pharmaceutical Co.

The landmark case of Roche Products, Inc. v. Bolar Pharmaceutical Co. defined the strict limits of the common law experimental use exemption in patent infringement cases. The Federal Circuit’s ruling emphasized that even activities aimed at obtaining regulatory approval, like Bolar’s testing, do not qualify for the exemption if they have a commercial purpose, setting a precedent that continues to shape the interpretation of the exemption today.

In this case, Roche Products sued Bolar Pharmaceutical for Bolar’s use of Roche’s patented compound to conduct tests necessary for Bolar to receive FDA approval of its generic product, which it intended to market after the patent expired. The question before the district court was whether Bolar’s limited use of Roche’s patented compound for testing and investigation to meet the FDA’s regulatory approval requirements constituted patent infringement, when commercial activities would have occurred after the patent expired.

While the district court found that the experimental use exemption insulated Bolar from infringement, the Federal Circuit reversed and held that because Bolar’s use was “solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry,” it was outside the scope of the exemption. In doing so, the Federal Circuit rejected the district court’s liberal interpretation of the common law exemption, which did not protect uses with a “definite, cognizable, and not insubstantial commercial purpose[],”  even if the commercial benefits from such uses are not immediately evident nor even during the life of the patent.

Notably, the Federal Circuit’s Bolar decision was prior to enactment of the Hatch-Waxman Act with the statutory safe harbor provision and underscores the limited scope of the common law research exemption, particularly concerning activities aimed at regulatory approval. This narrow finding remains as the foundation of courts’ interpretation of the common law exemption today.

Embrex, Inc. v. Service Engineering Corp.

In the case of Embrex, Inc. v. Service Engineering Corp., the Federal Circuit further defined the limits of the common law experimental use exemption in a patent infringement context. Despite Service Engineering’s claim that its testing of a prototype device was for scientific purposes, the court ruled that the testing, which had clear commercial intent, did not qualify for the exemption, even though the company did not ultimately sell the allegedly infringing device.

Embrex owned exclusive rights to a patent for a method for in ovo vaccination of poultry, which reduced the risk that chickens would succumb to infections that often infected an entire flock. After unsuccessfully attempting to collaborate with Embrex for manufacturing the devices to perform the patented method, Service Engineering sought to design around the patent and develop its own in ovo injection machine. Service Engineering hired scientists to explore injecting vaccine into the chorioallantoic sac (CAS), instead of the amnion/yolk sac regions required in the patent claims. However, the testing to determine the practicality of injecting vaccine into the CAS revealed that most injections penetrated beyond the CAS and into the amnion/yolk sac regions covered by the patent. Meanwhile, Service Engineering also solicited orders for its device from companies that were competitors of Embrex. Upon discovering of Service Engineering’s attempts to sell the in ovo devices, Embrex sued Service Engineering for patent infringement.

The district court rejected Service Engineering’s argument that its testing of the prototype device did not infringe because they were “scientific experiments” and thus fell within the experimental use exemption. In affirming, the Federal Circuit rejected Service Engineering’s argument that its testing constituted experimental use or was de minimis. The court noted that Service Engineering’s tests were performed for commercial purposes, not pure scientific inquiry, and its failure to sell the machines did not shield it from infringement liability. Of special importance to startup or early-stage companies, the fact that Service Engineering was ultimately unsuccessful in actually selling its prototype devices was irrelevant to the question of whether such uses are exempt from infringement, further emphasizing the “narrow confines” of the exemption.

Madey v. Duke University

In Madey v. Duke University, the Federal Circuit addressed the scope of the experimental use exemption in the context of academic research. The court ruled that Duke University’s use of Madey’s patented equipment, despite its non-profit status, was not protected under the exemption, emphasizing that the exemption does not cover activities aligned with an institution’s legitimate business goals, even if those activities are not directly commercial.

Dr. John Madey, a researcher at Duke University, sued the institution for patent infringement after it continued to use his patented equipment following his departure. Madey’s patents covered a “Microwave Electron Gun” used in connection with free electron lasers and “Free-Electron Laser Oscillator for Simultaneous Narrow Spectral Resolution and Fast Time Resolution Spectroscopy,” which remained in the lab. Duke apparently conceded that the alleged infringing devices and methods read on the patent claims but claimed their uses were protected under the experimental use defense.

To the contrary, Madey argued that Duke’s research was commercial in character and intent, citing Duke’s patent policy stated that Duke was in the business of “obtaining grants and developing possible commercial applications for the fruits of its ‘academic research.’” The district court rejected this argument and granted summary judgment to Duke University based on the experimental use defense, citing the Embrex decision, which held that the defense was viable for experimental, non-profit purposes. The court supported its decision by relying on another statement in Duke’s patent policy that stated that Duke was “dedicated to teaching, research, and the expansion of knowledge . . . [and] does not undertake research or development work principally for the purpose of developing patents and commercial applications.”

In reversing the decision, the Federal Circuit unambiguously rejected the district court’s “overly broad conception of the very narrow and strictly limited experimental use defense.” The Court ruled that the exemption does not provide protection for any conduct that is “in keeping with the alleged infringer’s legitimate business objectives,” regardless of whether that conduct is intended for commercial gain or may have indirect commercial implications, such as education. The Federal Circuit’s narrow interpretation of the exemption—and particularly its discounting of non-profit status—has significant implications on how academic and research institutions approach patented technologies, including those of its own researchers.

Other Cases

Only a handful of recent cases have analyzed the common law exemption to patent infringement. Of those, most have found the exemption inapplicable. See, e.g., Third Wave Techs., Inc. v. Stratagene Corp., 381 F. Supp. 2d 891, 912 (W.D. Wis. 2005) (finding defendant’s intent to obtain FDA approval “belies any notion that its actions were without commercial motivation”); Embrex, 216 F.3d at 1349 (finding alleged infringer’s performance of tests using the patented method to potential customers was done for commercial and not experimental purposes); but see Integra Lifesciences I, Ltd. v. Merck KGA, 496 F.3d 1334, 1337 (Fed. Cir. 2007) (finding that initial studies of angiogenesis inhibition using patented RGD peptide product “were of the nature of basic scientific research” and fell within the common law exemption).

Taken together, these cases illustrate the narrow interpretation courts have adopted of the common law experimental use exemption, emphasizing that any use that furthers a commercial or business objective—whether direct or indirect—is unlikely to be immune from patent infringement.

Takeaway

In conclusion, the common law experimental use exemption offers limited protection for entities engaged in scientific research, with courts consistently narrowing its scope to exclude commercial activities, even if the research is experimental in nature. The key cases reviewed highlight the challenges companies face when attempting to rely on this exemption as a defense to patent infringement.

II.  Closets, Conferences, and Clinical Trials: the U.S.C. § 271(e)(1) Safe Harbor

The Hatch-Waxman Act codified an exemption to infringement for the development of certain products requiring FDA approval. Specifically, 35 U.S.C. § 271(e)(1) provides that “[i]t shall not be an act of infringement to make, use, offer to sell, or sell . . . 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.” In other words, § 271(e)(1) provides a safe harbor for companies—often generic drug or medical device companies—to conduct activities specific to supporting their efforts to secure regulatory (i.e., FDA) approval and not infringe patents that would otherwise cover those activities. Since the passage of the Hatch-Waxman Act, courts have grappled with defining the boundaries of the safe harbor, largely focusing on fact-specific analyses to determine which activities qualify as reasonably related developing and submitting information to the FDA. In our first installment, we provide a snapshot of the current legal landscape, highlighting one recently established precedent and another case pending Federal Circuit guidance.

Edwards Lifesciences Corp. v. Meril Life Sciences Private Ltd.

In Edwards Lifesciences Corp. v. Meril Life Scis. Pvt. Ltd., Edwards filed a patent infringement lawsuit against Meril, alleging that its activities related to heart valve technology violated Edwards’s patents. In defense, Meril invoked the § 271(e)(1) safe harbor, arguing that its actions were protected because they were conducted for the purpose of obtaining regulatory approval. The district court granted Meril’s summary judgment motion after finding that the safe harbor applied.

On appeal, the Federal Circuit analyzed whether Meril’s activities were truly solely for regulatory submission—a question at the heart of the safe harbor. The case hinged on Meril’s decision to import its preapproval heart valve device into the U.S. for a conference. The device was never sold or publicly displayed but rather stayed in a hotel closet and storage room. Ultimately, the Federal Circuit sided with Meril, determining that its activities—including clinical trials of the device and related data collection—fell squarely within the safe harbor, as they were reasonably tied to obtaining U.S. regulatory approval. The court emphasized that Meril’s presence at the conference, attended by numerous clinical trial investigators, and its ongoing communication with the FDA about its submission and potential clinical study, demonstrated a clear regulatory purpose. While Meril may have had other incentives for importing the heart valves, the Federal Circuit held that as long as a regulatory use existed, the act remained protected by the safe harbor.

In a forceful dissent, Judge Lourie criticized the majority for diluting the significance of the word solely in § 271(e)(1). He argued that the safe harbor should apply only to activities conducted exclusively for FDA submissions and warned that an overly broad interpretation could open the door to abuse. In his view, intent matters—if an act serves mixed purposes, it should fall outside the safe harbor.

In January 2025, the Supreme Court declined to review the case, leaving the panel’s ruling intact and suggesting a tacit approval of a broader, more flexible interpretation of the § 271(e)(1) safe harbor. But, as Judge Lourie’s dissent emphasizes, the extent of protection remains unresolved. With the life sciences industry rapidly evolving, uncertainty remains about the boundaries of the safe harbor. Future disputes are inevitable, and courts will be called upon to clarify which activities are “reasonably related to the development and submission of information to the FDA” and qualify for protection.

Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals, LLC

The Federal Circuit is currently reviewing the district court’s decision in Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals, LLC, which addresses whether certain activities fall within the § 271(e)(1) safe harbor or constitute infringement under § 271(a)(1) of the Patent Act. The district court granted-in-part Jazz’s Motion for a Permanent Injunction and enjoined Avadel from seeking FDA approval and marketing LUMRYZ for the treatment of a chronic sleep disorder called idiopathic hypersomnia (“IH”).

On appeal, Avadel argues that the district court overstepped its authority in issuing an injunction and that the injunction improperly restricts conduct that is non-infringing under both § 271(e)(1)’s safe harbor and § 271(a)(1) of the Patent Act.

Avadel asserts that the district court’s injunction unlawfully prohibits its clinical trial activities because they fall squarely within the safe harbor protection for uses reasonably related to FDA approval. Specifically, Avadel maintains that its use of the FDA-approved open-label extension (“OLE”) portion of clinical trials is essential for patient recruitment and the collection of safety data—key components of the drug development process that should be shielded from infringement claims.

Beyond its safe harbor defense, Avadel also challenges the injunction under § 271(a)(1) and argues that the mere submission of an FDA application and clinical trial results does not constitute the “use” of a patented invention as defined by the Patent Act. Avadel contends that the district court’s broad injunction is legally flawed because such regulatory filings do not amount to an infringing act.

The Federal Circuit heard oral arguments on February 7, 2025. Avadel argued that the injunction prevented it from seeking FDA approval for its clinically superior drug, which Congress intended to protect with the safe harbor. Jazz countered that Avadel’s infringing products were already on the market, and the injunction allowed Avadel to continue marketing in the narcolepsy market while barring Avadel from seeking FDA approval for IH until 2036. The panel appeared open to modifying the injunction, though the judges approached the issue from different perspectives. Judge Alan D. Lourie took a broader, less fact-intensive approach, emphasizing that clinical trials are fundamentally conducted to secure approval for commercial sale rather than for purely academic purposes. In contrast, Judge Richard G. Taranto took a more nuanced view, distinguishing between OLE trials and other clinical studies and questioning whether Avadel should be barred from initiating new, non-OLE clinical trials.

As the case unfolds, the Federal Circuit’s decision will play a crucial role in shaping the legal framework surrounding the boundaries of the safe harbor, particularly in determining whether a broader, generalist approach or a more nuanced, fact-specific analysis prevails. Beyond its implications for Avadel’s future with LUMRYZ, the ruling could set a significant precedent for how courts interpret the safe harbor in future cases.

What’s Next?

The above overview of the common law exemption and the Hatch-Waxman safe harbor highlights courts’ growing focus on the evolving, fact-intensive activities across industries that depend on patent protection and the freedom to operate without the risk of infringement. The key cases discussed reveal the challenges companies face when attempting to use these exemptions as a defense to patent infringement.