Bayer Ag and Bayer Corporation v. Housey Pharmaceuticals, Inc.Bayer Ag and Bayer Corporation v. Housey Pharmaceuticals, Inc.
Housey Pharmaceuticals, Inc. (“Hous-ey”) appeals from the judgement of the United States District Court for the District of Delaware dismissing its counterclaim for infringement of United States Patent Nos. 4,980,281, 5,266,464, 5,688,655, and 5,877,007 for failure to state a claim. Because we conclude that infringement under
BACKGROUND
Housey is the assignee of U.S. Patents Nos. 4,980,281, 5,266,464, 5,688,655, and 5,877,007 (collectively “the Housey pat
On March 6, 2001, Bayer AG and Bayer Corporation (“Bayer”) filed a complaint seeking declaratory judgment of invalidity, unenforceability, and non-infringement of the Housey patents. On March 27, 2001, Housey filed an answer to the complaint and asserted a counterclaim for infringement of the Housey patents. The counterclaim alleged that Bayer “directly infringed claims of each of the patents-in-suit” and “contributed to infringement or induced others to infringe the patents-in-suit.” (Answer to Complaint and Counterclaim at 4). Additionally, Housey alleged that Bayer “infringed the method claims of the patents in suit pursuant to
Pursuant to35 U.S.C. § 295 , this Court may presume that a product was made [by Housey’s] patented methods where there is a substantial likelihood that it was so made by and [Housey] has made reasonable efforts to determine the process actually used. Here, there is substantial likelihood that [Housey’s] methods were used by Bayer to make the characterization of a pharmacologically аctive agent. Further, [Housey] has requested the defendants to identify the methods used in its facilities, but the [sic] Bayer has failed to do so. [Housey] has made the required reasonable efforts.
Id. at 4-5.
On April 16, 2001, Bayer filed a motion to dismiss under Rule 12(b)(6) of the Fed
1. Bayer is liable as an infringer when it sells in the United States a pharmaceutical composition containing a substance determined to be an inhibitor or activator of a target protein by use either in the United States or abroad of the [Housey] United States patented methods.
2. Bayer AB is liable as an infringer when it imports into the United States research data or information obtained from using the [Housey] patented methods.
Id. at 4.
In its opposition to Bayer’s motion to dismiss, Housey similarly described its counterclaim for infringement under
The district court interpreted Housey’s infringement claim .under
(1) [the sale] in the United States [of] a drug that was determined to be an inhibitor or activator of a target protein using the patented methods; and (2) import[ation] into or use in the United States [of] knowledge and information reflecting the identification or characterization of a drug acquired from using the patented methods.
Bayer AG v. Housey Pharms., Inc., 169 F.
Supp 2d. 328, 329 (D.Del.2001). Based on this interpretation, the court dismissed Housey’s claim for infringement under
DISCUSSION
We review issues of statutory construction without deference.
Doyon,
I
This case presents questions concerning the interpretation of
Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.... A product which is made by a patented process will, for purposes of this title, not be considered to be so made after—
(1) it is materially changed by subsequent processes; or
(2) it becomes a trivial and nonessential component of another product.
II
Housey offers two theories as to why
Ill
As used in the statute, the term “made” is the past tense of the verb “make.” The dictionaries offer multiple definitions of the term “make.” Some definitions are limited to manufacturing, for example, “to bring (a material thing) into being by forming, shaping, or altering material: fashion, MANUFACTURE.” Webster’s at 1363. 5 Other definitions broadly encompass activities in addition to manufacturing. For example, Webster’s defines “make” as “form as a result of calculation or design.” Id. 6 Under these circumstances the text is ambiguous, and we must look beyond the particular language being construed.
In order to resolve the ambiguity in the statutory language, we look first to other provisions of the statute.
See Pollard v. E.I. du Pont de Nemours & Co.,
There are other indications as well that the statute is concerned exclusively with products that are physical goods produced by a manufacturing process. One statutory exception to
However, Housey urges that the use of the term “manufacture” in
IV
The legislative history leads to the same conclusion: that Congress was concerned solely with physical goods that had undergone manufacture.
The history of the enactment of the Process Patents Amendments Act is quite long.
See Eli Lilly & Co. v. American Cyanamid Co.,
Even if the legislative history did not affirmatively suggest an intent to limit coverage to manufactured “articles” in accordance with
For example, a provision similar to
A subsequent bill in the following year again proposed a precursor of
Again in 1986, language was proposed substantially similar to
The failure of American patent law to make unlawful the importation of goods made using an American process patent has deep historical roots. American patent law — like the law of other nations — does not have an extraterritorial effect.... With respect to process patents, courts have reasoned that the only act of infringement is the act of making through the use of a patented process; therefore, there can be not infringement if that act occurs outside the United States. Although the courts are correctly construing current law, this rationale is inadequate public policy because it ignores the reality that the offending act is the importation of a product made through the use of a protected process patent or its subsequent sale within the United States.
Id. at 5 (emphasis added). Here, the report equates products with physical “goods.”
A 1987 Senate report on substantially identical legislation also supports limiting the statute to manufactured tangible products. According to the report “[t]he primary target of the U.S. process, patent-holder will naturally be the manufacturer, who is practicing the process and importing the resulting goods into the United States.” S.Rep. No. 100-83, at 39 (1987) (emphasis added). In discussing potential infringers, the report stated that “three types of infringers” were envisioned:
(1) [t]he manufacturer ... (2)[a]n infringing importer, user or seller who had knowledge before the infringement that a patented process was used by the manufacturer to make the product ... (3)[a]n innocent (i.e.unknowing) infringing retailer or importer, user or seller who does not himself use the process, [and] is entitled to take advantage of the limitations on damages and other remedies available.
Id. at 40 (emphasis added). The “manufacturer” was referrеd to as the “preferred defendant because of its direct knowledge of the process.” Id. at 39. The proposed statute also permitted suit against “the persons receiving the goods in this country in the belief that they may be in the best position, apart from the manufacturer, to determine how the goods were made.” Id. (emphasis added). Here again, there is no indication of any intent to reach products other than tangible products produced by manufacturing processes.
Housey urges that
The purpose of this bill is to provide meaningful protection to owners of patented processes. Under current patent law, owners of such patents have remedies for unauthorized use of the process only if the process was used in the United States. As a consequence, while a domestic manufacturer using the patented process would infringe the process patent, a foreign manufacturer who imports the product would not.
H.R.Rep. Nо. 100-60 at 3. This passage clearly reflects concern over competition between domestic and foreign manufacturers. The report further provides:
The value of new manufacturing techniques is reflected in the resulting new products. A new process may enhance the quality of the product produced, or the new process may permit the product to be made much more economically. In some cases, for example biotechnology, the new process may be the only method of producing a new product. In all of these instances, the advantage to the process patent owner is realized by suing or selling the product, or licensing others to do so. As a consequence, the unfettered ability of others to import, sell or use a product made by the patented process, severely diminishes the value of a U.S. process patent.
Id. Thus, Congress was concerned with tangible products and not mere information. Here again, “process patent” was interpreted as synonymous with “manufacturing technique.”
In the face of silence in the legislative history, here as to the coverage beyond manufactured artiсles, courts are reluctant to broadly interpret the legislation.
See Dewsnup v. Timm,
V
Finally, reading the statute to cover processes other than manufacturing processes could lead to anomalous results. The importation of information in the abstract (here, the knowledge that a substance possesses a particular quality) cannot be easily controlled. As Bayer points out, a person рossessing the allegedly infringing information could, under Housey’s interpretation, possibly infringe by merely entering the country. (Appellee’s Br. at 39.) Such an illogical result cannot have been intended.
See Paul v. Davis,
Under these circumstances we think it is best to leave to Congress the task of ex
We, therefore, hold that in order for a product to hаve been “made by a process patented in the United States” it must have been a physical article that was “manufactured” and that the production of information is not covered.
VI
This, however, is not the end of the inquiry. As characterized by Bayer in its motion to dismiss, Housey’s counterclaim of infringement also extended to “a pharmaceutical composition containing a substance determined to be an inhibitor or activator of a target protein by use either in the United States or abroad of the [Housey] United States patented methods.” (Pis.’ Brief in Supр. Of their Mot. to Dismiss Infringement Claim Under
Pursuant to35 U.S.C. § 295 , [the district court] may presume that a product was made [by Housey’s] patented methods where there is a substantial likelihood that it was so made by and [Housey] has made reasonable efforts to determine the process actually used. Here, there is substantial likelihood that [Housey’s] methods were used by Bayer to make the characterization of a pharmacologically active agent.
(Answer to Complaint and Counterclaim at 4-5.) Thus, Housey alleged that, as a result of the claimed research process, Bayer produced drugs using information created by the patented processes.
It is beyond dispute that a drug is a physical product that has been manufacr tured. The issue, therefore, is the necessary relationship under the statute ber tween the “process patented in the United States” and the resulting product;
i.e.,
we must determine whether a drug that was identified as useful through the use of a patented process is a “product which [was]
made by
[that] process.”
[t]he statute [35 U.S.C. § 271(g) ] does not specify what products will be considered to have been ‘made by’ the patented process, apparently because Congress wanted the courts to resolve this critical question of proximity to the product of the patented process on a case-by-case basis.
Bio-Technology General Corp. v. Genentech, Inc.,
The statute requires that the allegedly infringing product have been “made
CONCLUSION
For the foregoing reasons, the decision of the district court to dismiss Housey’s claims of infringement under
AFFIRMED.
COSTS
No costs.
Notes
. All four Housey patents claim priority from U.S. Application No. 154,206 filed February 10, 1988, although the final three patents included additional disclosure via a continuation-in-part application filed August 10, 1989. For purposes of this appeal the patents are identical in all material aspects, and so will be described with respect to the final issued patent, U.S. Patent No. 5,877,007 ("the '007 patent”).
. Claim 1 of U.S. Patent No. 4,980,281 is exemplary of the claims at issue, and provides in its entirety:
A method of determining whether a substance is an inhibitor or activator of a protein whose productiоn by a cell evokes a responsive change in a phenotypic charac-
teristic other than the level of said protein in said cell per se, which comprises:
(a) providing a first cell line which produces said protein and exhibits said pheno-typic response to the protein;
(b) providing a second cell line which produces the protein at a lower level than the first cell line, or does not produces the protein at all, and which exhibits said phe-notypic response to the protein to a lesser degree or not аt all;
(c) incubating the substance with the first and second cell lines; and
(d) comparing the phenotypic response of the first cell line to the substance with the phenotypic response of the second cell line to the substance.
. Amici Affimetrix, Inc., Perlegen Sciences, Inc., and Symyx Technologies, Inc. stated that
. In
American Fruit Growers, Inc. v. Brogdex Co.,
the Supreme Court defined the verb form of ''manufacture” as
“the production of articles
for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery.”
. Random House states: "to bring into existence by shaping or changing material, combining parts, etc.” Random House at 1161.
. Random House states: "to produce; cause tо exist or happen; bring about.” Random House at 1161.
. By sending a request for information to the "person then engaged in the manufacture of the product” to determine the process used, an alleged infringer can limit potential damages under
. Appellant additionally cites
. We recognize that
. The precursor language to
. The proposed language for
Whoever without authority imports into the United States or sells or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, sale, or use of the produсt occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the use of a product unless
there is no adequate remedy under this title for infringement on account of the importation or sale of that product. A product which is made by a patented process will, for purposes of this title, not be considered to be so made after—
(1) it is materially changed by subsequent processes; or
(2) it becomes a minor or nonessential component of another product.
H.R.Rep. No. 99-807, at 1-2 (1986) (emphasis added).
. Random House similarly defines “by” as "through the agency, efficacy, work, participation, or authority of.” Random House at 287.