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EXPERIMENTAL USE AS A DEFENSE IN DRUG PATENT INFRINGEMENT SUITS
Article 56, Paragraph 1 of the Patent Act pro-vides that: "Except as otherwise provided herein, the holder of a product patent shall have the right to exclude others from manufacturing, offering for sale, selling, using, or importing for any of the above purposes, the patented product without his consent." Article 56, Paragraph 2 of the Act provides that: "Except as otherwise provided herein, the holder of a process patent shall have the right to exclude others from manufacturing, offering for sale, selling, using, or importing for any of the above purposes, products directly made by the patented process, without his con-sent."
As to the exceptions to invention patent rights, Article 57 of the Act enumerates various cir-cumstances under which patent rights are not applicable, including, under Paragraph 1, Sub-paragraph 1: "Practicing the invention for re-search, educational, or experimental purposes, with no profit-seeking activities involved." In addition, Article 40-2, Paragraph 5 of the Phar-maceutical Affairs Act (PAA), as amended on 5 February 2005, provides that: "A new drug pat-ent shall not extend to research, education, or experiment conducted by a pharmaceutical company before applying for product registra-tion." But there are serious debates over the precise meaning of "research, educational, or experimental purposes," to which patent rights do not apply under the Patent Act and the PAA, and over the extent of the exemption from li-ability under the above provisions.
In a 2004 civil action for infringement of a pharmaceutical process patent, brought in the Taipei District Court, the defendant claimed exemption under Article 40-2, Paragraph 5 of the PAA. However, the court did not accept this defense. In the reasons for its judgment, the court elaborated the conditions for applying the above provision, with far-reaching impact on pharmaceutical industry in Taiwan.
Firstly, the court stated that the provision limit-ing the force of patent rights contained in Article 40-2, Paragraph 5 the PAA, refers to a "new drug patent;" so the scope of the provision is thus clearly limited to "products," and does not extend to "manufacturing processes." As the invention patent asserted by the plaintiff was a process patent, the defendant could not rely on the above provision as a defense.
The court also noted that "research, education, or experiment" refers to actions after a drug is im-ported. The drug should not be used directly in its original form. Analysis and decomposition can be used to make drugs with the same curative effect by different production processes. Such analysis and decomposition can be regarded as acts of research or experiment, and should not be regarded as acts of patent infringement.
But in the case before the court, the defendant merely added water to the drug produced by the plaintiff’s process. There was no technological input, and this could not be regarded as research or experiment. The court found that the defen-dant’s importation and use of the drug consti-tuted patent infringement. However, the court stressed that if the defendant’s use of the drug had met the criteria for research or experiment, importation for the purposes of such research or trials would also be exempted.
This case also involved the issue of whether Ar-ticle 40-2, Paragraph 5 of the PAA can be ap-plied retrospectively. The provision was enacted on 5 February 2005, but court proceedings in the case had already begun in 2004. Unlike criminal cases, civil cases are not subject to the principle of applying the newer or more lenient law, as expressed in Article 2 of the Criminal Code. Thus, except where legislation expressly defines the application of a new provision, application to a civil case of a law that did not take effect until after the litigation was filed is likely to be con-troversial.