Is Mooring in a "Safe Harbor" Actually Safe?
The U.S. Court of Appeals for the Federal Circuit recently affirmed a district court's decision of noninfringement based on the "safe harbor" provision of 35 USC § 271(e)(1). The importation of two medical devices into the United States was found to fall within the safe harbor because the importation was reasonably related to clinical studies necessary to obtain United States Food and Drug Administration (FDA) approval of the devices. This decision navigates key interpretation aspects of the statute and discusses whether intent and alternative uses are relevant to determine compliance with the statute.
The "safe harbor" provision of 35 USC § 271(e)(1) provides an exemption from patent infringement for activities that are reasonably related to obtaining United States Food and Drug Administration (FDA) approval of a medical device or drug. Essentially, it allows parties to conduct certain activities, such as preclinical and clinical testing, necessary for obtaining FDA approval without being liable for patent infringement. Section § 271(e)(1) states that:
“It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States 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 or veterinary biological products.” (emphasis added)
In Edwards Lifesciences Corp. v. Meril Life Sciences Pvt. Ltd.,[1] (Edwards) the U.S. Court of Appeals for the Federal Circuit (CAFC) recently affirmed, in a 2-1 decision, the district court’s decision granting summary judgment of non-infringement under § 271(e)(1) because Meril’s importation of two medical devices (two transcatheter heart valve systems) was reasonably related to submitting information to the FDA. Judge Lourie dissented.
As described by the CAFC, Meril is a medical device company based in India that created a transcatheter heart valve (“Myval System”) to treat heart disease. In the United States, the Myval System is considered a Class III medical device and, as such, is subject to regulatory standards that forbid Meril from marketing or selling the Myval System without first obtaining FDA approval.
The medical devices in question were imported into the United States and taken in September 2019 to the Transcatheter Cardiovascular Therapeutics Conference (“TCTC”), which is an annual symposium that features the latest developments in cardiovascular medicine. At TCTC, Meril provided information on its Myval System with displays and presentations. However, as the CAFC opinion notes, none of Meril’s activities included pricing or commercially promoting the Myval System. In fact, Meril instructed its employes that they could not make sales or offers for sale at the conference or while in the United States for the US market, but that they could make offers for other countries. While at TCTC, the imported medical devices were never shown to anyone. On the other hand, Meril did discuss the details of its medical devices with several U.S. doctors to recruit investigators for a clinical trial to support its submission of an FDA pre-market approval application.
Following TCTC, Edward filed suit against Meril, in October 2019, for patent infringement based on the importation of the Myval System into the United States. Edwards contended that the devices were imported as commercial sales tools and that their importation was “entirely unrelated to any clinical recruiting or FDA-related activities.” A year later, the district court granted Meril’s motion for summary judgment after determining that the importation of the Myval System was exempt from patent infringement due to the safe harbor provision of 35 USC § 271(e)(1). Edwards’s appeal followed.
The focal point of Edwards concerns evaluating whether Meril’s act of importation of the two medical devices fell within the safe harbor provision of § 271(e)(1). More specifically, the opinion poses the question of whether the interpretation of the statute should be focused on the word “solely” or “for uses.” According to the majority, the word “solely” in the statute modifies “for uses.” In other words, the majority states that it is not that “the use must only be reasonably related to the development and submission of information to the FDA.” (emphasis in opinion). In contrast, according to Judge Lourie in his dissent, the word “solely” has a simple meaning, and the district court “wholly ignored the presence of the word “solely” in the statute.”
The majority opinion arrives at this holding by looking at the Supreme Court’s 2005 decision in Merck KGaA v. Integra Lifesciences I, Ltd.[2] where the Supreme Court found that the safe harbor provision “provides a wide berth for the use of patented [inventions] in activities related to the federal regulatory process” and the safe harbor is available “irrespective of the stage of research and even if the information is never ultimately submitted to the FDA.”
The majority also looked to CAFC precedent. In AbTox, Inc. v. Exitron Corp.,[3]the CAFC held that the statute “does not look to the underlying purposes or attendant consequences of the activity … as long as the use is reasonably related to FDA approval.” In Momenta Pharm., Inc. v. Teva Pharm. USA Inc.,[4] it was clarified that FDA post-approval commercial processes were not protected under the safe harbor provision. In Amgen Inc. v. Hospira, Inc.,[5] the CAFC held that drug batches manufactured for pre-approval inspection fell into the safe harbor provision, while batches manufactured for commercial testing did not.
Taken together, the majority opinion summarizes its interpretation of the statutory construction as follows:
“In view of the discussion above, it is clear that the relevant inquiry is not why Meril imported the two transcatheter heart valve systems, or how Meril used the imported transcatheter heart valve systems, but whether the act of importation was for a use reasonably related to submitting information to the FDA.” (emphasis in opinion)
As stated, Judge Lourie dissented from the majority opinion due to the opinion’s failure to recognize the meaning of the word “solely” in interpreting § 271(e)(1). According to the dissent, the word “solely” was included in the statue “to ensure that infringing activity that was performed for purposes other than the development and submission of information” to the FDA would not be exempt. The dissent not only faults the majority opinion but also prior CAFC decisions for deviating too far from the plain statutory language in its interpretation and has called for an en banc review.
In summary, the strong dissent by Judge Lourie and the call for an en banc review indicates that there exists an unresolved divergence of thinking on the interpretation of the statute and whether or not intent and alternative uses are relevant to determine compliance under § 271(e)(1). Accordingly, those mooring in the “safe harbor” provision for protection should remain aware of the potential for en banc review, if Judge Lourie’s calls are answered.
