The Ruling Aids Research-Based Pharmaceutical Companies

By Steven M. Amundson

In August 2003, the Federal Circuit in Bayer AG v. Housey Pharmaceuticals, Inc. addressed the scope of 35 U.S.C. § 271(g). That provision in the patent statute concerns process patents, and it makes the importation, offer, sale, or use of a product "made" by a patented process an infringing act. The Federal Circuit held that § 271(g) does not apply to information obtained from a patented testing process.

The patents in Bayer v. Housey relate generally to research methods employed by pharmaceutical companies to identify candidate substances for further development into drug products. More particularly, the patents cover methods for determining whether a particular substance acts as a protein inhibitor or a protein activator.

Bayer, the alleged infringer, brought a declaratory-judgment action seeking rulings that the patents were invalid, unenforceable, and not infringed. Housey, the patentee, asserted a counterclaim for infringement and alleged that Bayer violated § 271(g) two ways:

  • by selling in the United States drug products that Bayer developed using the patented methods abroad; and

  • by importing into the United States information obtained using the patented methods abroad.
Bayer moved to dismiss Housey’s counterclaim, arguing that § 271(g) does not apply to patents claiming research methods. The trial court granted Bayer’s motion, holding that § 271(g) only pertains to products derived from manufacturing processes as opposed to methods for obtaining information used for research or development purposes. Housey appealed.

The Federal Circuit affirmed the dismissal of Housey’s counterclaim. In doing so, it initially considered Housey’s contention that information obtained using a patented process may constitute a product "made" by a patented process. The Federal Circuit rejected that contention. It ruled that the term "made" in § 271(g) means "manufactured" and that § 271(g) extends only to tangible objects and does not cover the production of information.

The Federal Circuit next considered Housey’s contention that Bayer infringed because it sold drug products that it manufactured using information acquired from the patented processes. The Federal Circuit rejected that contention too. It decided that § 271(g) applies only to a process "used directly in the manufacture of the product, and not merely as a predicate process to identify the product to be manufactured." It concluded that a "drug product, the characteristics of which were studied using the claimed research processes . . . is not a product ‘made by’ those claimed processes."

Thus, the Federal Circuit provided some relief for research-based pharmaceutical companies against an exceedingly broad reading of § 271(g). As the court has now construed that provision, drug companies may proceed with research activities overseas without fear that after marketing a product years later in the United States they could be charged with infringing a patent covering a research method.

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