The independent news organization of Duke University

Landmark patent case draws interest

A patent-infringement lawsuit filed against the University by the inventor of the free-electron laser was sent back to a North Carolina district court this month by the U.S. Court of Appeals in a ruling that reopens the question of the relationship between patent-holding researchers and universities.

The suit alleges that the University infringed upon two of plaintiff John Madey's patents by operating the Free-Electron Laboratory and using equipment related to Madey's patents after he was fired as director of the laboratory in 1997.

The federal court of appeals' Oct. 3 decision directs the lower court to reexamine the case with a more limited interpretation of the experimental-use exception--a doctrine that allows for patent infringement if relevant research is used, in the words of a previous court decision, "for amusement, to satisfy idle curiosity or for strictly philosophical inquiry." What is unclear, however, is whether academic research with no commercial applications falls under this definition.

When the case first went to district court in 2001, the University succeeded, arguing that its use of the patented equipment fell under the experimental-use exception and that it was exempt from patent laws because the research was conducted "under the authority of a government research grant."

Madey appealed, arguing that since the University "is in the business of obtaining grants and developing possible commercial applications for the fruits of its academic research" it should not be exempted.

In remanding the case, the appeals court agreed with Madey that the district court incorrectly shifted to him the burden to prove Duke's use of the equipment did not fall under the experimental-use exception when it was the University's burden to prove such an exception.

"I do not think that this month's appeal's court ruling was particularly exceptional," Madey wrote in an e-mail from the University of Hawaii-Manoa, where he operates another free-electron laboratory.

"Universities and other non-profit research institutions have long accepted their responsibility to pay the licensing/royalty fees for the technology and/or instrumentation they use in their research, though these fees are most often included in the sales price for these procurements," Madey said. "I know of no institution that has ever attempted to negotiate a lower price for these procurements based on the theory that the use of this technology for research made it exempt from licensing fees or royalties."

A significant portion of the proprietary technology that Duke licenses is used for research, he said.

"It is surely accepted practice that all such technology-whether used for research or commerce-is subject to the payment of an appropriate licensing fee or royalty as provided for in the United States Constitution," Madey said.

However, University officials maintain that Duke has not infringed upon Madey's patents and question what type of precedent could be set if a judge rules otherwise.

"We're concerned about this [decision], since the new interpretation could limit not only Duke but all universities in the United States in their ability to carry out research that serves the public in so many ways," said David Jarmul, associate vice president for news. He added that the University is still considering whether to appeal the most recent decision.

"We continue to think the University's position is correct, in terms of the experimental-use issue and also because this research was authorized by the government," Jarmul said. "We look forward to the courts resolving the issue accordingly and will hold off making any major changes in Duke's research practices until the picture becomes clearer."

Officials at FEL declined requests for interviews.

The case has drawn attention from the academic community beyond Duke, with patent experts keeping a careful eye on it.

"Cases that involve universities and the experimental-use exception are relatively rare," said Andrew Chin, an associate professor and patent expert at the University of North Carolina at Chapel Hill law school. "This is going to be a pretty influential decision."

Chin agreed with the appeals court that the district court placed too much burden on Madey and said the experimental-use exception is a complicated issue that needs to be further defined.

"It's problematic in that there are a lot of [patented] research tools that one would think of that would be extremely useful in coming up with future innovations," Chin explained. "The net result to the public is that they don't get the new invention."

He gave the example of genetic research, in which researches could patent a DNA molecule and then not allow others to work off of that research, thereby preventing the discovery of other genes. Nonetheless, a researcher's legal rights still must be protected, and universities might consider new tactics in dealing with patent-holding researchers, he said.

"Universities may want to think more carefully about advising researchers regarding their practices of using patented research tools," Chin said.

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