Academic Researchers Must Consider Patent Infringment Risk

Are researchers in universities or other non-profit institutions, as part of their experimental work, free to practice a patented invention without a license as long as they are not developing a commercial product? Unless such work is being performed solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the answer is "no," according to a recent decision by the Court of Appeals for the Federal Circuit, Madey v. Duke University. Researchers and those engaged in collaborative relationships with research institutions should take note of the Court’s decision, which narrowly interprets the scope of the "experimental use" exception to patent infringement liability.

Background. John Madey, a tenured research professor at Duke University, was the sole owner of two patents related to free electron laser technology. Madey ran the free electron laser laboratory at Duke and operated certain equipment in the lab that embodied his patented technology. As the result of a dispute, Madey was removed as the head of the lab, and ultimately resigned from Duke, but the university continued to operate some of the equipment in the lab after his departure. Madey sued Duke in federal district court for patent infringement.

District Court Opinion. Duke maintained that its use of the equipment was permissible under the "experimental use" doctrine. The courts have long recognized an "experimental use" exception to patent infringement liability, but the contours of the defense have not been entirely clear. The district court described the experimental use defense as being applicable to uses that are "‘solely for research, academic, or experimental purposes.’" Madey argued that Duke’s research in the FEL lab was "commercial in character and intent." Based on language in Duke’s patent policy, Madey contended that Duke was "in the business of ‘obtaining grants and developing possible commercial applications for the fruits of its academic research.’"

The district court found in favor of Duke, however, and dismissed Madey’s claim, on the ground that Madey had failed to establish that the research activities in which Duke was engaged were commercial in nature rather than conducted for experimental or other non-profit purposes. In support of its holding, the district court referred to another statement in Duke’s patent policy providing that "‘Duke [is] 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.’" The district court reasoned that these statements from Duke’s patent policy "refute[d] any contention that Duke is ‘in the business’ of developing technology for commercial applications."

Federal Circuit Decision. The Court of Appeals for the Federal Circuit, taking a much narrower view of the experimental use defense, reversed the decision of the district court. It noted, first, that the district court’s interpretation of the experimental use defense as covering uses that are "solely for research, academic, or experimental purposes" was too broad, and at odds with prior decisions of the Federal Circuit establishing that the defense is limited to actions performed "‘for amusement, to satisfy idle curiosity or for strictly philosophical inquiry.’" The Court then emphasized that the defense does not immunize use that is any way commercial in nature, or that, regardless of commercial implications, is in keeping with an alleged infringer’s "legitimate business." The Court pointed out that, although not all research projects have a commercial application, such projects nevertheless further a university’s legitimate business objectives, which include educating and enlightening students and faculty, increasing the status of the institution, and luring lucrative research grants, students, and faculty.

Regardless of whether an institution is engaged in research for commercial gain, the Court held, as long as the use of patented technology is in furtherance of the institution’s legitimate business, and not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the activity does not qualify for the "very narrow and strictly limited experimental use defense."

Conclusion. The Madey case puts to rest the notion that an academic researcher is free to use patented materials and methods without a license. On the contrary, even basic academic research of a non-commercial nature now appears to fall outside the scope of the experimental use exception. Duke has filed a petition with the United States Supreme Court asking it to review the Federal Circuit’s decision. (As of the date this article went to print, the Supreme Court had not yet decided whether to accept the case for review.)