US Federal Court rules that experimental use defence to infringement is not available to non-profit institutions using patented inventions to further business

Madey vs. Duke University
US Federal Circuit (Oct.03, 2002)

The US Federal Circuit has reversed a district court's grant of experimental use exemption from patent infringement, to a university, on the ground that-

• Any use of a patented invention which furthers legitimate business cannot qualify for the very narrow and limited exception of "experimental use", regardless of the profit or non-profit status of the user.

The Case:

Madey holds US patents for 'microwave electron gun' and 'free electron laser oscillator for simultaneous narrow spectral resolution and fast time resolution spectroscopy'. Madey filed suit alleging that Duke University had three devices in their facilities which infringed his patents.

The District Court gave Duke University the benefit of the 'experimental use' exemption to infringement.

Madey appealed arguing that -

• The district court improperly shifted the burden of proving that Duke University's use was not experimental, to Madey.

Duke University countered that -

• The university's patent policy was "dedicated to teaching, research and the expression of knowledge ... [and] does not undertake research development work principally for the purpose of developing patents and commercial applications." Therefore, they are exempt from infringement under the experimental use defence.

Issues before the Federal Circuit:

• Who has the burden of proof with an experimental use defence?
• Are universities or other non-profit institutions exempt from infringement under the 'experimental use' defence?

Finding for Madey, the Federal Circuit appellate court held:

• The district court improperly shifted the burden of establishing infringement to the plaintiff when it actually rested with the defendant.
• The profit or non-profit status of the user is not determinative of the "experimental use defence".
• Regardless of whether a particular institution or entity is engaged in an endeavour for commercial gain, so long as the act is in furtherance of the alleged infringer's legitimate business and is not solely for amusement, to satisfy curiosity, or for strictly philosophical enquiry, the act does not qualify for the very narrow and strictly limited experimental use defence.
• Precedent "does not immunize any conduct that is in keeping with the alleged infringer's legitimate business, regardless of commercial implications. For example, major research universities ... often sanction and fund research projects with arguably no commercial application whatsoever. However, these projects unmistakably further the institution's legitimate business objectives, including educating and enlightening students and faculty participating in these projects. These projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students and faculty."