Congress Modifies Roche v. Bolar and SC Extends Exception to Devices - Eli Lilly and Co. v. Medtronic, Inc., 496 U.S. 661, 110 S.Ct. 2683, 110 L.Ed.2d 605, (U.S.1990)
See also: Experimental Use Defense Rejected for
FDA Testing - Roche Products Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858
(Fed. Cir. 04-23-1984)
|||SUPREME COURT OF THE UNITED STATES
496 U.S. 661, 15 U.S.P.Q.2D (BNA) 1121, 110 S. Ct. 2683, 110 L. Ed. 2d 605,
58 U.S.L.W. 4838
|||decided: June 18, 1990.
|||ELI LILLY AND COMPANY, PETITIONER
|||ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL
|||Scalia, J., delivered the opinion of the Court, in which Rehnquist, C.
J., and Brennan, Marshall, Blackmun, and Stevens, JJ., joined. Kennedy,
J., filed a dissenting opinion, in which White, J., joined. O'connor, J.,
took no part in the consideration or decision of the case.
|||This case presents the question whether 35 U.S.C. § 271(e)(1) renders
activities that would otherwise constitute patent infringement noninfringing
if they are undertaken for the purpose of developing and submitting to the
Food and Drug Administration information necessary to obtain marketing approval
for a medical
|[ 58 U.S.L.W. Page 664]|
device under § 515 of the Federal Food, Drug, and Cosmetic Act, 90 Stat.
552, 21 U.S.C. § 360e (FDCA).
|||In 1983, pursuant to 28 U.S.C. § 1338(a), the predecessor-in-interest
of petitioner Eli Lilly filed an action against respondent Medtronic in
the United States District Court for the Eastern District of Pennsylvania
to enjoin respondent's testing and marketing of an implantable cardiac defibrillator,
a medical device used in the treatment of heart patients. Petitioner claimed
that respondent's actions infringed its exclusive rights under United States
Patent No. Re 27,757 and United States Patent No. 3,942,536. Respondent
sought to defend against the suit on the ground that its activities were
"reasonably related to the development and submission of information
under" the FDCA, and thus exempt from a finding of infringement under
35 U.S.C. § 271(e)(1). The District Court rejected this argument, concluding
that the exemption does not apply to the development and submission of information
relating to medical devices. Following a jury trial, the jury returned a
verdict for petitioner on infringement of the first patent and the court
directed a verdict for petitioner on infringement of the second patent.
The court entered judgment for petitioner and issued a permanent injunction
against infringement of both patents.
|||On appeal, the Court of Appeals for the Federal Circuit reversed, holding
that by virtue of 35 U.S.C. § 271(e)(1) respondent's activities could not
constitute infringement if they had been undertaken to develop information
reasonably related to the development and submission of information necessary
to obtain regulatory approval under the FDCA. It remanded for the District
Court to determine whether in fact that condition had been met.
872 F.2d 402
(1989). We granted certiorari. 493 U.S. (1989).
|[ 58 U.S.L.W. Page 665]|
|||In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration
Act of 1984, 98 Stat. 1585 (1984 Act), which amended the FDCA and the patent
laws in several important respects. The issue in this case concerns the
proper interpretation of a portion of section 202 of the 1984 Act, codified
at 35 U.S.C. § 271(e)(1). That paragraph, as originally enacted, provided:
|||"It shall not be an act of infringement to make, use, or sell 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)) 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." 35 U.S.C. § 271(e)(1) (1982 ed., Supp. II).*fn1
|||The parties dispute whether this provision exempts from infringement the
use of patented inventions to develop and submit information for marketing
approval of medical devices under the FDCA.
|||The phrase "patented invention" in § 271(e)(1) is defined to
include all inventions, not drug-related inventions alone. See 35 U.S.C.
§ 100(a) ("When used in this title unless the context otherwise indicates
. . . the term 'invention' means invention or discovery"). The core
of the present controversy is that petitioner interprets the statutory phrase,
"a Federal law which regulates the manufacture, use, or sale of drugs,"
to refer only to those individual provisions of federal law that regulation
drugs, whereas respondent interprets it to refer to the entirety of any
Act (including, of course, the
|[ 58 U.S.L.W. Page 666]|
FDCA) at least some of whose provisions regulate drugs. If petitioner is
correct, only such provisions of the FDCA as § 505, 52 Stat. 1052, as amended,
21 U.S.C. § 355, governing premarket approval of new drugs, are covered
by § 271(e)(1), and respondent's submission of information under 21 U.S.C.
§ 360e, governing premarket approval of medical devices, would not be a
|||On the basis of the words alone, respondent's interpretation seems preferable.
The phrase "a Federal law" can be used to refer to an isolated
statutory section -- one might say, for example, that the judicial review
provision of the Administrative Procedure Act, 5 U.S.C. § 706, is "a
Federal law." The phase is also used, however, to refer to an entire
Act. The Constitution, for example, provides that "Every Bill which
shall have passed the House of Representatives and the Senate, shall, before
it become a Law, be presented to the President of the United States."
U.S. Const., Art. I, § 7, cl. 2 (emphasis added). And the United States
Code provides that "whenever a bill . . . becomes a law or takes effect,
it shall forthwith be received by the Archivist of the United States from
the President." 1 U.S.C. § 106a (emphasis added). This latter usage,
which is probably the more common one, seems also the more natural in the
present context. If § 271(e)(1) referred to "a Federal law which pertains
to the manufacture, use, or sale of drugs" it might be more reasonable
to think that an individual provision was referred to. But the phrase "a
Federal law which regulates the manufacture, use, or sale of drugs"
more naturally summons up the image of an entire statutory scheme of regulation.
The portion of § 271(e)(1) that immediately precedes the words "a Federal
law" likewise seems more compatible with reference to an entire Act.
It refers to "the development and submission of information under a
Federal law" (emphasis added). It would be more common, if a single
section rather than an entire scheme were referred to, to speak
|[ 58 U.S.L.W. Page 667]|
of "the development and submission of information pursuant to a Federal
law," or perhaps "in compliance with a Federal law." Taking
the action "under a Federal law" suggests taking it in furtherance
of or compliance with a comprehensive scheme of regulation. Finally, and
perhaps most persuasively, the fact that § 202 of the 1984 Act (which established
§ 271(e)(1)) used the word "law" in its broader sense is strongly
suggested by the fact that the immediately preceding -- and, as we shall
see, closely related -- section of the 1984 Act, when it meant to refer
to a particular provision of law rather than an entire Act, referred to
"the first permitted commercial marketing or use of the product under
the provision of law." § 201, 98 Stat. 1598, 35 U.S.C. § 156(a)(5)(A)
|||The centrally important distinction in this legislation (from the standpoint
of the commercial interests affected) is not between applications for drug
approval and applications for device approval, but between patents relating
to drugs and patents relating to devices. If only the former patents were
meant to be included, there were available such infinitely more clear and
simply ways of expressing that intent that it is hard to believe the convoluted
manner petitioner suggests was employed would have been selected. The provision
might have read, for example, "It shall not be an act of infringement
to make, use, or sell a patented drug invention . . . solely for uses reasonably
related to the development and submission of information required, as a
condition of manufacture, use, or sale, by Federal law." Petitioner
contends that the terms "patented drug," or "drug invention"
(or, presumably, "patented drug invention") would have been "potentially
unclear" as to whether they covered only patents for drug products,
or patents for drug composition and drug use as well. Brief for Petitioner
22. If that had been the concern, however, surely it would have been clearer
and more natural to expand the phrase constituting the object of the sentence
to "patented invention for drug product, drug
|[ 58 U.S.L.W. Page 668]|
composition, or drug use" than to bring in such a limitation indirectly
by merely limiting the laws under which the information is submitted to
drug regulation laws.
|||On the other side of the ledger, however, one must admit that while the
provision more naturally means what respondent suggests, it is somewhat
difficult to understand why anyone would want it to mean that. Why should
the touchstone of noninfringement be whether the use is related to the development
and submission of information under a provision that happens to be included
within an Act that, in any of its provisions, not necessarily the one at
issue, regulates drugs? The first response is that this was a shorthand
reference to the pertinent provisions Congress was aware of, all of which
happened to be included in Acts that regulated drugs. But since it is conceded
that all those pertinent provisions were contained within only two Acts
(the FDCA and the Public Health Service Act (PHS Act), 58 Stat. 682, as
amended, 42 U.S.C. § 201 et seq. (1982 ed. and Supp. II)), that is not much
of a time-saving shorthand. The only rejoinder can be that Congress anticipated
future regulatory-submission requirements that it would want to be covered,
which might not be included in the FDCA or the PHS Act but would surely
(or probably) be included in another law that regulates drugs. That is not
terribly convincing. On the other hand, this same awkwardness, in miniature,
also inheres in petitioner's interpretation, unless one gives "under
a Federal law" a meaning it simply will not bear. That is to say, if
one interprets the phrase to refer to only a single section or even subsection
of federal law, it is hard to understand why the fact that that section
or subsection happens to regulate drugs should bring within § 271(e)(1)
other products that it also regulates; and it does not seem within the range
of permissible meaning to interpret "a Federal law" to mean only
isolated portions of a single section or subsection. The answer to this,
presumably, is that Congress would not expect two products to be dealt with
|[ 58 U.S.L.W. Page 669]|
in the same section or subsection -- but that also is not terribly convincing.
|||As far as the text is concerned, therefore, we conclude that we have before
us a provision that somewhat more naturally reads as the Court of Appeals
determined, but that is not plainly comprehensible on anyone's view. Both
parties seek to enlist legislative history in support of their interpretation,
but that sheds no clear light.*fn2 We
think the Court of Appeals' interpretation is confirmed, however, by the
structure of the 1984 Act taken as a whole.
|||Under federal law, a patent "grants to the patentee, his heirs or
assigns, for the term of seventeen years, . . . the right to exclude others
from making, using, or selling the invention throughout the United States."
35 U.S.C. § 154. Except as otherwise provided, "whoever without authority
makes, uses or sells any patented invention, within the United States during
the term of the patent therefor, infringes the patent." 35 U.S.C. §
271(a). The parties agree that the 1984 Act was designed to respond to two
unintended distortions of the 17-year patent term produced by the requirement
that certain products must receive premarket regulatory approval. First,
the holder of a patent relating to such products would as a practical matter
not be able reap any financial rewards during the early years of the term.
When an inventor makes a potentially useful discovery, he ordinarily protects
it by applying for a patent at once. Thus, if the discovery relates to a
product that cannot be marketed without substantial testing and regulatory
approval, the "clock" on
|[ 58 U.S.L.W. Page 670]|
his patent term will be running even though he is not yet able to derive
any profit from the invention.
|||The second distortion occurred at the other end of the patent term. In
1984, the Court of Appeals for the Federal Circuit decided that the manufacture,
use, or sale of a patented invention during the term of the patent constituted
an act of infringement, see 35 U.S.C. § 271(a), even if it was for the sole
purpose of conducting tests and developing information necessary to apply
for regulatory approval. See Roche Products, Inc. v. Bolar Pharmaceutical
733 F.2d 858
(CA Fed.), cert. denied,
469 U.S. 856
(1984).*fn3 Since that activity could
not be commenced by those who planned to compete with the patentee until
expiration of the entire patent term, the patentee's de facto monopoly would
continue for an often substantial period until regulatory approval was obtained.
In other words, the combined effect of the patent law and the premarket
regulatory approval requirement was to create an effective extension of
the patent term.
|||The 1984 Act sought to eliminate this distortion from both ends of the
patent period. Section 201 of the Act established a patent-term extension
for patents relating to certain products that were subject to lengthy regulatory
delays and could not be marketed prior to regulatory approval. The eligible
products were described as follows:
|||"(1) The term 'product' means:
|||"(A) A human drug product.
|[ 58 U.S.L.W. Page 671]|
"(B) Any medical device, food additive, or color additive subject to
regulation under the Federal Food, Drug, and Cosmetic Act.
|||"(2) The term 'human drug product' means the active ingredient of
a new drug, antibiotic drug, or human biological product (as those terms
are used in the Federal Food, Drug, and Cosmetic Act and the Public Health
Services Act) including any salt or ester of the active ingredient, as a
single entity or in combination with another active ingredient." 35
U.S.C. § 156(f).
|||Section 201 provides that patents relating to these products can be extended
up to five years if, inter alia, the product was "subject to a regulatory
review period before its commercial marketing or use," and "the
permission for the commercial marketing or use of the product after such
regulatory review period [was] the first permitted commercial marketing
or use of the product under the provision of law under which such regulatory
review period occurred." 35 U.S.C. § 156(a).
|||The distortion at the other end of the patent period was addressed by
§ 202 of the Act. That added to the provision prohibiting patent infringement,
35 U.S.C. § 271, the paragraph at issue here, establishing that "it
shall not be an act of infringement to make, use, 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." 35 U.S.C. § 271(e)(1). This allows competitors,
prior to the expiration of a patent, to engage in otherwise infringing activities
necessary to obtain regulatory approval.
|||Under respondent's interpretation, there may be some relatively rare situations
in which a patentee will obtain the advantage of the § 201 extension but
not suffer the disadvantage of the § 202 noninfringement provision, and
|[ 58 U.S.L.W. Page 672]|
which he will suffer the disadvantage without the benefit.*fn4
Under petitioner's interpretation, however, that sort of disequilibrium
becomes the general rule for patents relating to all products (other than
drugs) named in § 201 and subject to premarket approval under the FDCA.
Not only medical devices, but also food additives and color additives, since
they are specifically named in § 201, see 35 U.S.C. § 156(f), receive the
patent-term extension; but since the specific provisions requiring regulatory
approval for them, though included in the FDCA, are not provisions requiring
regulatory approval for drugs, they are (on petitioner's view) not subject
to the noninfringement provision of § 271(e)(1). It seems most implausible
to us that Congress, being demonstrably aware of the dual distorting effects
of regulatory approval requirements in this entire area -- dual distorting
effects that were roughly offsetting, the disadvantage at the beginning
of the term producing a more or less corresponding advantage at the end
of the term -- should choose to address both those distortions only for
drug products; and for other products named in § 201 should enact provisions
which not only leave in place an anticompetitive restriction at the end
of the monopoly term but simultaneously expand the monopoly term itself,
thereby not only failing to eliminate but positively aggravating
|[ 58 U.S.L.W. Page 673]|
distortion of the 17-year patent protection. It would take strong evidence
to persuade us that this is what Congress wrought, and there is no such
|||Apart from the reason of the matter, there are textual indications that
sections 201 and 202 are meant generally to be complementary. That explains,
for example, § 202's exception for "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)." 35 U.S.C. § 271(e)(1).
Although new animal drugs and veterinary biological products are subject
to premarket regulatory licensing and approval under the FDCA see 21 U.S.C.
§ 360b (new animal drugs), and the Act of March 4, 1913, see 21 U.S.C. §§
151, 154 (veterinary biological products) -- each "a Federal law which
regulates the manufacture, use, or sale of drugs" -- neither product
was included in the patent-term extension provision of section § 201. They
therefore were excepted from § 202 as well. Interpreting § 271(e)(1) as
the Court of Appeals did
|[ 58 U.S.L.W. Page 674]|
here appears to create a perfect "product" fit between the two
sections. All of the products eligible for a patent term extension under
§ 201 are subject to § 202, since all of them -- medical devices, food additives,
color additives, new drugs, antibiotic drugs, and human biological products
-- are subject to premarket approval under various provisions of the FDCA,
see 21 U.S.C. § 360e (medical devices); § 348 (food additives); § 376 (color
additives); § 355 (new drugs); § 357 (antibiotic drugs), or under the PHS
Act, see 42 U.S.C. § 262 (human biological products). And the products subject
to premarket approval under the FDCA and the Act of March 4, 1913 that are
not made eligible for a patent term extension under § 201 -- new animal
drugs and veterinary biological products -- are excluded from § 202 as well.*fn6
|[ 58 U.S.L.W. Page 675]|
|||According to petitioner, "the argument for a broad construction of
Section 271(e)(1) is refuted by the companion Sections (e)(2) and (e)(4)."
Brief for Petitioner 17. The latter provide:
|||"(2) It shall be an act of infringement to submit an application
under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described
in section 505(b)(2) of such Act for a drug claimed in a patent or the use
of which is claimed in a patent, if the purpose of such submission is to
obtain approval under such Act to engage in the commercial manufacture,
use, or sale of a drug claimed in a patent or the use of which is claimed
in a patent before the expiration of such patent.
|||"(4) For an act of infringement described in paragraph
|[ 58 U.S.L.W. Page 676]|
|||"(A) the court shall order the effective date of any approval of
the drug involved in the infringement to be a date which is not earlier
than the date of the expiration of the patent which has been infringed,
|||"(B) injunctive relief may be granted against an infringer to prevent
the commercial manufacture, use, or sale of an approved drug, and
|||"(C) damages or other monetary relief may be awarded against an infringer
only if there has been commercial manufacture, use, or sale of an approved
|||"The remedies prescribed by subparagraphs (A), (B), and (C) are the
only remedies which may be granted by a court for an act of infringement
described in paragraph (2), except that a court may award attorney fees
under section 285." 35 U.S.C. §§ 271(e)(2), (4).
|||Petitioner points out that the protections afforded by these provisions
are conferred exclusively on the holders of drug patents. They would, he
contends, have been conferred upon the holders of other patents if Congress
had intended the infringement exemption of § 271(e)(1) to apply to them
|||That is not so. The function of the paragraphs in question is to define
a new (and somewhat artificial) act of infringement for a very limited and
technical purpose that relates only to certain drug applications. As an
additional means of eliminating the de facto extension at the end of the
patent term in the case of drugs, and to enable new drugs to be marketed
more cheaply and quickly, § 101 of the 1984 Act amended § 505 of the FDCA,
21 U.S.C. § 355, to authorize abbreviated new drug applications (ANDAs),
which would substantially shorten the time and effort needed to obtain marketing
approval. An ANDA may be filed for a generic drug that is the same as a
so-called "pioneer drug" previously approved, see 21 U.S.C. §
355(j)(2)(A), or that differs from the pioneer drug in specified ways, see
21 U.S.C. § 355(j)(2)(C). The ANDA applicant can substitute bioequivalence
date for the extensive animal and human studies of safety and effectiveness
that must accompany a full new drug application. Compare 21 U.S.C. § 355(j)(2)(A)(iv),
with § 355(b)(1). In addition, § 103 of the 1984 Act amended § 505(b) of
the FDCA, 21 U.S.C. § 355(b), to permit submission of a so-called paper
new drug application (paper NDA), an application that relies on published
literature to satisfy the requirement of animal and human studies demonstrating
safety and effectiveness. See 21 U.S.C. § 355(b)(2). Like ANDAs, paper NDAs
permit an applicant seeking approval of a generic drug to avoid the costly
and time-consuming studies required for a pioneer drug.
|||These abbreviated drug-application provisions incorporated an important
new mechanism designed to guard against
|[ 58 U.S.L.W. Page 677]|
infringement of patents relating to pioneer drugs. Pioneer drug applicants
are required to file with the FDA the number and expiration date of any
patent which claims the drug that is the subject of the application, or
a method of using such drug. See 21 U.S.C. § 355(b)(1). ANDAs and paper
NDAs are required to contain one of four certifications with respect to
each patent named in the pioneer drug application: (1) "that such patent
information has not been filed," (2) "that such patent has expired,"
(3) "the date on which such patent will expire," or (4) "that
such patent is invalid or will not be infringed by the manufacture, use,
or sale of the new drug for which the application is submitted." 21
U.S.C. §§ 355(b)(2)(A), 355(j)(2)(A)(vii).
|||This certification is significant, in that it determines the date on which
approval of an ANDA or paper NDA can be made effective, and hence the date
on which commercial marketing may commence. If the applicant makes either
the first or second certification, approval can be made effective immediately.
See 21 U.S.C. §§ 355(c)(3)(A), 355(j)(4)(B)(i). If the applicant makes the
third certification, approval of the application can be made effective as
of the date the patent expires. See 21 U.S.C. §§ 355(c)(3)(B), 355(j)(4)(B)(ii).
If the applicant makes the fourth certification, however, the effective
date must depend on the outcome of further events triggered by the Act.
An applicant who makes the fourth certification is required to give notice
to the holder of the patent alleged to be invalid or not infringed, stating
that an application has been filed seeking approval to engage in the commercial
manufacture, use, or sale of the drug before the expiration of the patent,
and setting forth a detailed statement of the factual and legal basis for
the applicant's opinion that the patent is not valid or will not be infringed.
See 21 U.S.C. §§ 355(b)(3)(B), 355(j)(2)(B)(ii). Approval of an ANDA or
paper NDA containing the fourth certification may become effective immediately
only if the patent owner has not initiated a lawsuit for infringement within
45 days of receiving notice of the certification. If the
|[ 58 U.S.L.W. Page 678]|
owner brings such a suit, then approval may not be made effective until
the court rules that the patent is not infringed or until the expiration
of (in general) 309 months, whichever first occurs. See 21 U.S.C. §§ 355(c)(3)(C),
|||This scheme will not work, of course, if the holder of the patent pertaining
to the pioneer drug is disabled from establishing in court that there has
been an act of infringement. And that was precisely the disability that
the new § 271(e)(1) imposed, with regard to use of his patented invention
only for the purpose of obtaining premarketing approval. Thus, an act of
infringement had to be created for these ANDA and paper NDA proceedings.
That is what is achieved by § 271(e)(2) -- the creation of a highly artificial
act of infringement that consists of submitting an ANDA or a paper NDA containing
the fourth type of certification that is in error as to whether commercial
manufacture, use, or sale of the new drug (none of which, of course, has
actually occurred) violates the relevant patent. Not only is the defined
act of infringement artificial, so are the specified consequences, as set
forth in paragraph (e)(4). Monetary damages are permitted only if there
has been "commercial manufacture, use, or sale." 35 U.S.C. § 271(e)(4)(C).
Quite obviously, the purpose of (e)(2) and (e)(4) is to enable the judicial
adjudication upon which the ANDA and paper NDA schemes depend. It is wholly
to be expected, therefore, that these provisions would apply only to applications
under the sections establishing those schemes -- which (entirely incidentally,
for present purposes) happen to be sections that relate only to drugs and
not to other products.*fn7
|[ 58 U.S.L.W. Page 679]|
* * *
|||No interpretation we have been able to imagine can transform § 271(e)(1)
into an elegant piece of statutory draftsmanship. To construe it as the
Court of Appeals decided, one must posit a good deal of legislative imprecision;
but to construe it as petitioner would, one must posit that and an implausible
substantive intent as well.
|||The judgment of the Court of Appeals is affirmed, and the case remanded
for further proceedings consistent with this opinion.
872 F.2d 402,
affirmed and remanded.
|||JUSTICE KENNEDY, with whom JUSTICE WHITE joins, dissenting.
|||Petitioner contends that respondent infringed its patents by testing and
marketing a medical device known as a cardiac defibrillator. The Court holds
that 35 U.S.C. § 271(e)(1), a provision of the patent law, may give respondent
a defense to this charge. It rules, in particular, that § 271(e)(1) will
excuse respondent if it acted for the sole purpose of developing information
necessary to obtain marketing approval for the device under § 515 of the
Federal Food, Drug, and Cosmetic Act (FDCA), 90 Stat. 552, 21 U.S.C. § 360(e).
I dissent because I find the Court's decision contrary to the most plausible
reading of the statutory language.
|||The applicable version of § 271(e)(1) states:
|||"It shall not be an act of infringement to make, use, or sell 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)) solely for uses reasonably related
|[ 58 U.S.L.W. Page 680]|
to the development and submission of information under a Federal law which
regulates the manufacture, use, or sale of drugs." 35 U.S.C. § 271(e)(1)
(1982 ed., Supp. II). The Court says that Congress used the phrase "a
Federal law which regulates the manufacture, use, or sale of drugs"
to refer to the entirety of any Act, at least some portion of which regulates
drugs. The FDCA fits this description. As a result, even though respondent
sought marketing approval under the FDCA for a medical device instead of
a drug, the Court concludes that § 271(e)(1) may serve as a defense to patent
infringement. I disagree.
|||Section 271(e)(1), in my view, does not privilege the testing of medical
devices such as the cardiac defibrillator. When § 271(e)(1) speaks of a
law which regulates drugs, I think that it does not refer to particular
enactments or implicate the regulation of anything other than drugs. It
addressed the legal regulation of drugs as opposed to other products. Thus,
while the section would permit a manufacturer to use a drug for the purpose
of obtaining marketing approval under the FDCA, it does not authorize a
manufacturer to use or sell other products that, by coincidence, the FDCA
also happens to regulate. Respondent, in consequence, has no defense under
|||The Court asserts that Congress could have specified this result in a
clearer manner. See ante, at 4-5. That is all too true. But we do not tell
Congress how to express its intent. Instead, we discern its intent by assuming
that Congress employs words and phrases in accordance with their ordinary
usage. In this case, even if Congress could have clarified § 271(e)(1),
the Court ascribes a most unusual meaning to the existing language. Numerous
statutory provisions and court decisions, from a variety of jurisdictions,
use words almost identical to those of § 271(e)(1), and they never mean
what the Court says they mean here.
|[ 58 U.S.L.W. Page 681]|
For instance, in delineating the scope of pre-emption by the Employee Retirement
Income Security Act of 1974 (ERISA), Congress stated that "nothing
in this title shall be construed to exempt or relieve any person from any
law of any State which regulates insurance, banking, or securities."
88 Stat. 897, 29 U.S.C. § 1144(b)(2)(A) (1982) (emphasis added). Interpreting
this language as the Court interprets § 271(e)(1) would imply that Congress
intended to give the States a free hand to enact any law that conflicts
with ERISA so long as some portion of the state enactment regulates insurance,
banking, or securities. No one would contend for this result. The Texas
Legislature, in a like manner, has said that "a person shall pay $1
as a court cost on conviction of any criminal offense . . . except that
a conviction arising under any law that regulates pedestrians or the parking
of motor vehicles is not included." Tex. Govt. Code Ann. § 56.001(b)
(Supp. 1990) (emphasis added). I do not think that Texas intended by this
language to exclude all convictions that might arise under an act, such
as a traffic code, that regulates speeding in addition to pedestrians and
parking. And, when the Missouri Legislature specified that "no governmental
subdivision or agency may enact or enforce a law that regulates or makes
any conduct in the area [of gambling] an offense," Mo. Rev. Stat. §
572.100 (1986) (emphasis added), I doubt that it meant to invalidate local
enactments in their entirety whenever some portion of them regulates gambling.
Countless other examples confound the Court's method of reading the operative
language in this case. See, e. g., N. C. Gen. Stat. § 42-37.1 (1984) (prohibiting
retaliatory eviction by landlords for complaints about violations of any
" State or federal law that regulates premises used for dwelling purposes
") (emphasis added); Cochran v. Peeler, 209 Miss. 394, 408, 47 So.
2d 806, 809 (1950) ("the violation of a law which regulates human conduct
in the operation of vehicles on the roads becomes, by legislative fiat,
negligence") (emphasis added); Local 456 Int'l Brotherhood of Teamsters
v. Cortlandt, 68 Misc. 2d 645, 653,
|[ 58 U.S.L.W. Page 682327]|
N. Y. S. 2d 143, 153 (1971) ("under the home rule power to enact local
laws, a town may enact a law which regulates the powers, duties, qualifications,
[etc.] of its officers and employees ") (emphasis added); see also
U.S. Const., Amdt. 14, § 1 ("No State shall make or enforce any law
which shall abridge the privileges or immunities of citizens of the United
States ") (emphasis added). Unless we assume that these examples do
not reflect ordinary usage, which I see no basis for doing, we cannot hold
that § 271(e)(1) refers to the entirety of the FDCA or any other Act which
regulates drugs. Instead, I would conclude, the section refers only to the
actual regulation of drugs, and does not exempt the testing of a medical
device from patent infringement.
|||Congress did not act in an irrational manner when it drew a distinction
between drugs and medical devices. True, like medical devices, some drugs
have a very high cost. See ante, at 10, n. 5. Testing a patented medical
device, however, often will have greater effects on the patent holder's
rights than comparable testing of a patented drug. As petitioner has asserted,
manufacturers may test generic versions of patented drugs, but not devices,
under abbreviated procedures. See 21 U.S.C. § 355(j). These procedures,
in general, do not affect the market in a substantial manner because manufacturers
may test the drugs on a small number of subjects, who may include healthy
persons who otherwise would not buy the drug. See § 355(j)(7)(B) (stating
the requirements of a showing of the "bioequivalence" of drugs).
By contrast, as in this case, manufacturers test and market medical devices
in clinical trials on patients who would have purchased the device from
the patent holder. See App. 39-42; see also 21 CFR § 812.7(b) (1989) (permitting
manufacturers to recover their costs in clinical trials). Although the Court
gives examples of high cost drug dosages, it does not demonstrate that the
testing of these drugs detracts from a patent holder's sales. Congress could
have determined that the differences
|[ 58 U.S.L.W. Page 683]|
in testing or some other difference between drugs and devices justified
excluding the latter from the ambit of § 271(e)(1). See
879 F.2d 849,
850, n. 4 (CA Fed. 1989) (Newman, J., dissenting from the denial of rehearing
en banc). For these reasons, I dissent.
|||*fn1 Unless otherwise specified, references
to sections of the United States Code are to those sections as they existed
upon the effective date of the 1984 Act.
|||*fn2 Petitioner's principal argument
is that the legislative history of § 202 mentions only drugs -- which is
quite different, of course, from its saying (as it does not) that only drugs
are included. "It is not the law that a statute can have no effects
which are not explicitly mentioned in its legislative history . . . ."
Pittston Coal Group v. Sebben,
488 U.S. 105,
115 (1988). As respondent notes, even the legislative history of § 201 --
whose text explicitly includes devices -- contains only scant references
|||*fn3 Petitioner suggests that it was
"the 1984 Roche decision which prompted enactment of [§ 202],"
Brief for Petitioner 20, n. 13, which should therefore be regarded as quite
independent of the simultaneously enacted patent-term extension of § 201.
Undoubtedly the decision in Roche prompted the proposal of § 202; but whether
that alone accounted for its enactment is quite a different question. It
seems probable that Congress -- for the reasons we discuss in text -- would
have regarded § 201 and § 202 as related parts of a single legislative package,
as we do.
|||*fn4 We cannot readily imagine such
situations (and petitioner has not described any), except where there is
good enough reason for the difference. Petitioner states that disequilibrium
of this sort will often occur because the § 271(e)(1) noninfringement provision
applies "whether the patent term is extended or not," and even
with respect to "patents which cannot qualify for a term extension."
Reply Brief for Petitioner 11. But if the patent term is not extended only
because the patentee does not apply, he surely has no cause for complaint.
And the major reason relevant patents will not qualify for the term extension
is that they pertain to "follow-up" drug products rather than
"pioneer" drug products, see §§ 156(a)(5)(A), 156(f)(2); Fisons
plc v. Quigg,
876 F.2d 99
(CA Fed. 1989). For these, however, the abbreviated regulatory approval
procedures established by Title I of the 1984 Act, 98 Stat. 1585, see 21
U.S.C. §§ 355(b)(2), (j), eliminate substantial regulatory delay at the
outset of the patent term, and thus eliminate the justification for the
§ 156 extension.
|||*fn5 Petitioner argues that there was
good reason for Congress to establish an infringement exemption with respect
to drugs but not devices, since testing of the latter does much greater
economic harm to the patentee. Devices, petitioner contends, are much more
expensive than drugs ($17,000 apiece for respondent's allegedly infringing
defibrillators); and many have only a small number of potential customers,
who will purchase only a single device each, so that depleting the market
through testing may do substantial harm. Brief for Petitioner 30-31. These
concerns, however, apply with respect to certain drugs as well. According
to one source, a year's dosage of Cyclosporine (used to suppress rejection
of new organs) costs from $5,000 to $7,000; of AZT (used to treat AIDS)
$8,000; of Monoclate (used to speed blood clotting in hemophiliacs) $25,000;
and of Growth Hormone (used to treat dwarfism) $8,000 to $30,000. A. Pollack,
The Troubling Cost of Drugs That Offer Hope, N. Y. Times, Feb. 9, 1988,
p. A1, col. 3. Another new drug, Tissue Plasminogen Activator, used in the
treatment of heart attacks to dissolve blood clots, costs $2,200 per dose,
and is prescribed for only a single dose. Ibid. Moreover, even if the factors
petitioner mentions could explain the omission from § 271(e)(1) of medical
devices, they could not explain the omission of food additives and color
|||*fn6 It is true that § 202, if interpreted
to apply to all products regulated by the FDCA and other drug-regulating
statutes, has a product coverage that includes other products, in addition
to new animal drugs and veterinary biological products, not numbered among
the specifically named products in § 201 -- for example, food, infant formulas,
cosmetics, pesticides, and vitamins. But for the § 202 exemption to be applicable,
the patent use must be "reasonably related to the development and submission
of information under" the relevant law. New animal drugs and veterinary
biological products appear to be the only additional products covered by
drug-regulating statutes for which the requirement of premarket approval
-- and hence the need for "development and submission of information"
-- existed. With respect to food, infant formulas, cosmetics, and pesticides,
for example, the FDCA merely established generally applicable standards
that had to be met. See, e. g., 21 U.S.C. § 341 (food); § 350a (infant formula);
§ 361 (cosmetics); § 346a )pesticides); cf. § 350 (vitamins).
It must be acknowledged that the seemingly complete product-correlation
between § 201 and § 202 was destroyed in 1986, when, without adding "new
infant formula" to the defined products eligible for the patent-term
extension under § 156, Congress established a premarket approval requirement
for that product, and thus automatically rendered it eligible for the
§ 271(e)(1) exemption from patent infringement. See Pub. L. 99-570, §
4014(a)(7), 100 Stat. 3207-116, codified at 21 U.S.C. § 350a(d). That
subsequent enactment does not change our view of what the statute means.
That isolated indication of lack of correlation between § 156 and § 271(e)(1)
is in any event contradicted by the 1988 amendment that added most new
animal drugs and veterinary biological products to § 156 and simultaneously
deleted from § 271(e)(1) the infringement exception for those products
See Generic Animal Drug and Patent Term Restoration Act, 102 Stat. 3971,
|||*fn7 Although petitioner has not challenged
§ 271(e)(1) on constitutional grounds, it argues that we should adopt its
construction because of the "serious constitutional question under
the takings clause of the Fifth Amendment . . . [that would arise] if the
statute is interpreted to authorize the infringing use of medical devices."
Brief for Petitioner 31. We do not see how this consideration makes any
difference. Even if the competitive injury caused by the noninfringement
provision is de minimis with respect to most drugs, surely it is substantial
with respect to some of them -- so the "serious constitutional question"
(if it is that) is not avoided by petitioner's construction either.
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