Northern District of California Relies on the Safe Harbor Defense of Section 271(e)(1) to Resolve Infringement Cases Early

Two recent decisions from the Northern District of California show courts’ willingness to dispose of cases early in litigation through the safe harbor defense. The safe harbor of Section 271(e)(1) allows competitors, before the expiration of a patent, to engage in otherwise infringing activities if the use is “reasonably related to” obtaining regulatory approval. These two decisions provide pre-litigation and litigation guidance for life science companies that manufacture regulated products such as drugs and medical devices.

The Supreme Court has construed the safe harbor to apply to drugs as well as medical devices and other products subject to Food and Drug Administration (FDA) approval. Section 271(e)(1) of the Patent Act provides 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.”

In Carl Zeiss Meditec v. Topcon Medical Systems, the N.D. Cal. granted with prejudice a motion to dismiss the plaintiff’s patent infringement claim based on product testing as barred by the safe harbor of § 271(e)(1). Carl Zeiss alleged that software testing by Topcon related to its glaucoma product infringed its patent. Topcon sought dismissal “because the only act of infringement alleged—testing the software used in the Glaucoma [product]—is protected by the safe harbor of 35 U.S.C. § 271(e)(1).”

Topcon argued that the allegedly infringing software testing was “in anticipation of its plan to file a 510(k) notification with the FDA to obtain regulatory approval for [its glaucoma product].” Carl Zeiss countered that a testing in connection with a 510(k) notification is outside the scope of the section 271(e) safe harbor because the FDA’s review under a 510(k) notification for a Class II device is less comprehensive than a premarket approval for a Class III device.

The court agreed with Topcon. “[T]he Federal Circuit has rejected the notion that application of the safe harbor is dependent on the level of regulatory scrutiny germane to a particular device.” Section 271(e) applies “to Class II medical devices, notwithstanding that Class II devices are subject to an abbreviated approval process compared to Class III medical devices, which are subject to premarket approval.” The court also rejected Carl Zeiss’s arguments that the software testing was for commercialization efforts and not for FDA approval. Application of the safe harbor “does not turn on whether Topcon eventually intends to commercialize the Glaucoma [product]. Rather, as long as the activity is reasonably related to obtaining FDA approval, the court does not look to the underlying purposes or attendant consequences of the activity.” The court thus dismissed the patent infringement claim without leave to amend.

In Edwards Lifesciences v. Meril Life Sciences, the N.D. Cal. granted the defendants’ motion for summary judgment of non-infringement, rejecting the plaintiff’s argument that the safe harbor defense did not apply because the activities were for a commercial purpose. Edwards alleged that Meril’s heart valve device was made abroad using Edwards’ patented processes. Edwards alleged two acts of infringement: (1) Meril imported the accused device into the US in 2017 so the University of Washington (UW) could conduct pre-clinical cadaver studies; and (2) Meril imported and exhibited at least one accused device at a 2019 medical conference in San Francisco. Defendants argued that “all the accused activities were directed at furthering Meril’s clinical investigation of its [product] for future FDA approval and thus fall squarely within the scope of the safe harbor.”

The shipment of Meril’s product to the UW in 2017 for preclinical investigations was protected under the safe harbor. “It is undisputed that the UW preclinical study investigated whether [Meril’s product] could be safely implanted in human subjects in future clinical studies.” “The Supreme Court has made clear that preclinical studies appropriate for submission to the FDA during the regulatory process are protected under the safe harbor, even if the results are never ultimately submitted.” The product samples here “were related to determining the feasibility and safety of using [Meril’s product],… which Meril needed to confirm before it could conduct clinical trials.”

The shipment of Meril’s product to the medical conference was protected under the safe harbor. “It is undisputed that as of the time of [the] Conference, Meril had taken significant steps towards obtaining FDA approval for [its product].” The accused device was never displayed at the conference due to technical issues. Plaintiff argued that “because Meril never actually used the devices after their importation, its safe harbor defense fails as a matter of law.” The court rejected Plaintiff’s argument. It is undisputed that the conference was attended by a large number of potential clinical trial investigators. “It is also undisputed that Meril did not sell or offer to sell its medical device at the medical conference.” Therefore, Meril’s transportation of the product samples to the medical conference, where Meril did not sell or offer to sell the device, was reasonably related to the submission of information to the FDA, including educating the investigators at the conference about Meril’s product.

Plaintiff also argued that the safe harbor does not apply because Meril had a commercial purpose when it brought the product samples to the UW in 2017 and to the medical conference in 2019. The court rejected this argument. “[W]hether the safe harbor applies turns on the objective question of whether the actions taken with respect to a device are reasonably related to FDA approval, and the only relevant acts are those that would otherwise constitute patent infringement under Section 271.” “If Defendants’ otherwise infringing act is reasonably related to FDA approval, the safe harbor applies regardless of the purported purpose behind the use.” As discussed above, the court found that both acts fell “squarely within the safe harbor”; thus, the defendants’ underlying purposes were not relevant to the inquiry.

These decisions show a willingness by the courts to dismiss patent infringement cases early in litigation based on the safe harbor defense of § 271(e)(1). At least in the Northern District of California, the underlying commercial purpose of the accused infringer’s activities is irrelevant if the allegedly infringing conduct was otherwise reasonably related to FDA approval. Plaintiffs interpreting these decisions should consider each act of infringement separately and assert facts in the complaint or obtain facts during discovery showing that the safe harbor did not apply to the specific acts of infringement. Defendants, on the other hand, should consider each alleged act of infringement and assert facts showing that the acts were reasonably related to FDA approval.

Gibbons P.C. will continue to monitor and report developments in the safe harbor defense to patent infringement.

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