By Michael R. Mischnick. Full text here.
Patents are critical in the biotechnology and pharmaceutical sectors. However, patents have inhibited competition in certain instances. For example, until the 1980s, pioneer drug companies benefited from a de facto “patent term windfall” because generic manufacturers could not begin the regulatory approval process of their generics until after the pioneer drug patent expired. In response, Congress enacted the Hatch-Waxman Act. This legislation included a new infringement exemption, codified at 35 U.S. C. § 271(e)(1), that allows generic companies to begin the approval process before the pioneer patent expires so that generic equivalents can be brought to market upon expiration of the pioneer patent.
Although § 271(e)(1) seems straightforward, courts have slowly expanded the infringement exemption. In the recent decision of Merck v. Integra, the Supreme Court further extended the exemption’s reach, raising questions as to whether biotechnology research tools used to develop new pharmaceuticals are covered by the exemption. This Note argues that biotechnology research tools should not be covered by the exemption because (a) research tools are not “patented inventions” within the meaning of § 271(e)(1), and (b) expanding the exemption to include research tools would remove the economic incentive to develop biotechnology research tools.