Existing law


13.5 The Patents Act does not expressly except experimental or research use of patented inventions from liability for infringement. However, an implied experimental use defence may exist in Australian patent law, as it does in other common law jurisdictions. One source of an experimental use defence in case law is said to be the 19th century English case of Frearson v Loe, which suggested thatacts might not constitute ‘use’ of an invention where there is no commercial purpose.[2]

13.6 Section 13 of the Patents Act provides that the grant of a patent confers upon a patent holder the exclusive right to exploit, or to authorise the exploitation of, an invention during the patent term. The definition of ‘exploit’ in Schedule 1 sets out the activities that a patent holder has the exclusive right to conduct, including making, hiring, selling, using or importing a patented product, or a product resulting from use of a patented process. It has been argued that ‘exploitation’ is implicitly limited to the commercial context; but the words of the statute are not limited in this way.[3]

13.7 Another factor that may be consistent with the existence of an experimental use defence is that s 9 of the Patents Act excludes use ‘for the purpose of reasonable trial or experiment’ from the definition of ‘secret use’.[4] This provision allows the patent holder to undertake trial and experimentation prior to filing a patent application.[5] It has also been suggested that the reference in the Patents Regulations 1991 (Cth) to the release of deposits of microorganisms for ‘experimental purposes’[6] is consistent with an understanding that experimental use does not infringe patent rights.

13.8 While no Australian court has ruled on the matter, the existence of an experimental use defence is often assumed. For example, Australia’s third party arguments in the Canada–Patent Protection case stated (somewhat elliptically) that ‘an experimental use exception did apply, but only to the extent that a court would find that specific experimental activities did not constitute infringing use’.[7] However, others have argued that the Patents Act does not appear to imply an experimental use defence, especially given the breadth of the exclusive rights given to patent holders.[8] Submissions to the Inquiry cast doubt on the existence of an experimental use defence in Australian law.[9] Even if a defence were held to exist, it would probably not be available in situations where experimentation is conducted for commercial advantage.

13.9 The Advisory Council on Intellectual Property (ACIP) is currently undertaking a review of patents and experimental use.[10] ACIP released an Issues Paper in February 2004,[11] with a request for written submissions by 30 April 2004. ACIP’s final report is expected late in 2004. Given the ALRC’s own timetable for reporting, it has not been possible to take ACIP’s views into account in formulating the recommendations in this Report, although the ALRC has held discussions with ACIP about the issues raised by their inquiry.

Other jurisdictions

13.10 In some countries, including New Zealand, the United States and Canada, experimental use defences are recognised in case law—although there remains some dispute over the scope of these defences. Other jurisdictions, including the United Kingdom and some other member States of the European Union, have express statutory provisions relating to the experimental use of patented inventions. The laws in these jurisdictions are briefly discussed below.[12]

New Zealand

13.11 As in Australia, New Zealand patents legislation does not provide an express exception for experimental use of a patented invention. However, in at least two cases, the courts appear to have accepted that such a defence is available.[13]

13.12 Although the New Zealand courts have drawn distinctions between experimental research and commercially directed research,[14] the law is said to remain ‘uncertain as to where the line actually falls between pure research and research for gaining a commercial advantage’.[15]

United States

13.13 United States case law recognises a limited experimental use defence. In Roche Products Inc v Bolar Pharmaceutical Co[16]the United States Court of Appeals for the Federal Circuit found that the defence was dependent on the experiments involved being ‘for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry’, and not for business reasons.[17]

13.14 In Madey v Duke University[18](Madey) the Court stated that earlier cases had emphasised that the defence is ‘very narrow and strictly limited’ and that, in particular, ‘use in keeping with the legitimate business of the alleged infringer does not qualify for the experimental use defence’. The Court held that the non-profit (or educational) status of the alleged infringer does not determine the availability of the experimental use defence. Rather, the focus should be on whether the act was in furtherance of the alleged infringer’s legitimate business.[19]

13.15 In the United States it has been argued that the Madey decision will render the experimental use defence unavailable to research institutions simply because their legitimate business is research.[20] Critics of the decision argue that the Court’s decision will have a significant chilling effect on academic scientific research[21] and fails to recognise adequately that the purposes of the patent system include facilitating research into the patented subject matter by persons other than the patent holder.[22]


13.16 Case law in Canada establishes an experimental use defence, which is available when experimentation is ‘not for profit’.[23] The Canadian Biotechnology Advisory Committee (CBAC) has concluded that the ambit of the defence is ‘vague’ and that case law does ‘little to amplify the meaning of the exception’.[24]

13.17 The existence of an experimental use defence is recognised in s 55.2(6) of the Patent Act 1985 (Canada). This provides that the Canadian ‘springboarding’ provisions, which are intended to permit activities directed to obtaining regulatory approval,[25] do not affect any exception in respect of use ‘for the purpose of experiments that relate to the subject-matter of the patent’.[26]

United Kingdom

13.18 The United Kingdom enacted an experimental use defence in s 60(5) of the Patents Act 1977 (UK) in part to ensure that United Kingdom law conformed to the Community Patent Convention (CPC).[27] The United Kingdom provision states that:

(5) An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if— …

(b) it is done for experimental purposes relating to the subject-matter of the invention.[28]

13.19 In Monsanto Co v Stauffer Chemical Co,[29] Dillon LJ held that use for ‘experimental purposes’ may have a commercial end in view.[30] However, the underlying purpose of the experiments must be technical—‘to discover something unknown or to test a hypothesis’ relating to the patented invention.[31]

13.20 The other important element of s 60(5) is that the experimental purposes must relate to the subject matter of the invention. United Kingdom cases have held that this relationship is ‘in the sense of having a real and direct connection with that subject matter’[32] and that, in determining what constitutes the subject matter of the patent, the court is to look at the entire patent document, including its aim.[33]

European Union

13.21 Article 27(b) of the CPC[34] provides that the rights conferred by a Community patent shall not extend to ‘acts done for experimental purposes relating to the subject-matter of the patented invention’—words virtually identical to those enacted in United Kingdom legislation. This provision has been widely incorporated into the national laws of other member States of the European Union,[35] in most cases without any significant variation in its English wording.[36]

13.22 The scope of permissible experimental use has expanded since art 27 began to be incorporated into national laws.[37] While the experimental use exception was previously confined, at least in some countries, to ‘private and personal’ experimental use, the exception is no longer confined to ‘strictly non-commercial’ use.[38]

13.23 European case law is said to establish that experimentation to seek further knowledge about the patented invention,[39] or to determine the adequacy of the disclosure in the patent application, or other matters going to the validity of the patent are permissible.[40] However, acts undertaken merely to satisfy regulatory requirements will fall outside the exception.[41]

13.24 Courts are likely to search for the primary motivation behind experimentation when deciding whether a defence is available and will not insist that the motivation must be ‘solely’ or ‘exclusively’ to gain more scientific knowledge.[42] In other words, where scientific or technical improvement forms one genuine reason for the experimentation, a defence against infringement may be available, even if there are other motivations.[43]

Summary of comparative law

13.25 Although the precise scope of experimental use defences in other jurisdictions varies, experimentation on a patented invention must generally be distinguished from experimentation using a patented invention for broader research purposes: only the former is covered by the defence. In particular, the patent laws of the United Kingdom and other member States of the European Union explicitly state that the experimental use defence applies only where the experimentation relates to the subject matter of the patented invention. The defence is limited to research that ‘builds upon the knowledge provided by the patent, and aims to discover something unknown about the subject matter of the patent or to test a hypothesis about it’.[44]

13.26 An important difference in the content of national laws concerns the extent to which experimental use of a patented invention may have a commercial motivation. In this respect, United States law (especially after the Madey decision) is significantly more restrictive than the law in the United Kingdom and other member States of the European Union. In New Zealand and Canada, the significance of commercial motivations is unclear due to the paucity of case law. However, the law in these jurisdictions appears to be closer to the European Union than the United States in that permissible experimentation may have some commercial objectives.

[2]Frearson v Loe (1876) 9 ChD 48.

[3] The Explanatory Memorandum to the Patents Bill 1990 stated that cl 13 of the Bill (s 13 of the Act) was not intended to ‘modify the present law relating to certain acts which have been held not to constitute infringement—for example, use of an invention for certain experimental or trial purposes’: Explanatory Memorandum, Patents Bill 1990 (Cth), [25].

[4]Patents Act 1990 (Cth) ss 9(a), 18(1)(d).

[5] However, the purpose and the nature of the experiments that an alleged infringer might want to conduct will differ from those of a prospective patent holder: See C Smith, ‘Experimental Use Exception to Patent Infringement: Where Does Australia Stand?’ (2003) 53 Intellectual Property Forum 14, 15.

[6]Patents Regulations 1991 (Cth) r 3.25(4)(c).

[7]Canada: Patent Protection of Pharmaceutical Products: Complaint by the European Communities and their Member States, 17 March 2000, WT/DS114/R.

[8] See C Smith, ‘Experimental Use Exception to Patent Infringement: Where Does Australia Stand?’ (2003) 53 Intellectual Property Forum 14.

[9] See, eg, A McBratney and others, Submission P47, 22 October 2003; Australian Centre for Intellectual Property in Agriculture, Submission P81, 16 April 2004; Intellectual Property Research Institute of Australia, Submission P88, 16 April 2004; Centre for Law and Genetics, Submission P104, 22 April 2004.

[10] ACIP’s terms of reference direct it to examine whether some types of patents are inhibiting research and development in Australia and to determine whether Australian researchers and business would benefit from introducing an experimental use defence (or some other provision) into Australian patent legislation: Advisory Council on Intellectual Property, Patents and Experimental Use: Issues Paper (2004), (i).

[11] Ibid.

[12] Options for reform of experimental use defences have been under active consideration in several jurisdictions, including the United States, Canada and the United Kingdom. Some of these proposals were discussed in Australian Law Reform Commission, Gene Patenting and Human Health, DP 68 (2004), [14.46]–[14–57].

[13]Monsanto Co v Stauffer Chemical Co [1985] RPC 515; Smith Kline & French Laboratories Ltd v Attorney-General (NZ) [1991] 2 NZLR 560.

[14] See Monsanto Co v Stauffer Chemical Co (NZ) [1984] FSR 559.

[15] G Lynch and J Scarlett, Experimental Defence to Patent Infringement, Baldwin Shelston Waters, <www.bsw.com/articles/xfactor9.html> at 16 June 2004.

[16]Roche Products Inc v Bolar Pharmaceutical Co 733 F 2d 858 (Fed Cir, 1984).

[17] In Embrex Inc v Service Engineering Corp 216 F 3d 1343 (Fed Cir, 2000), the Court of Appeals reaffirmed that the exception should be interpreted narrowly and that a use is disqualified from the defence if it has even the ‘slightest commercial implication’: 1353.

[18]Madey v Duke University 307 F 3d 1351 (Fed Cir, 2002).

[19] Ibid, 1362–1363. The Court noted that even university research projects of no commercial application may further an institution’s legitimate business objectives by increasing the status of the university and helping secure research grants, students and faculty. The Court was not required to determine whether the experimental use defence was made out on the facts. In June 2003, the Supreme Court of the United States denied a petition for review of the Madey decision.

[20] Another view is that this approach is not compelled by the Madey decision when read as a whole. Research institutions are neither automatically entitled, nor automatically ineligible for the experimental use defence: see Duke University v Madey No 02–1007 Supreme Court of the United States, 2003): Brief for the United States as Amicus Curiae (May 2003).

[21] Ibid: Brief for the Association of American Medical Colleges et al, as Amicus Curiae (January 2003).

[22] See T Sampson, ‘Madey, Integra and the Wealth of Nations’ (2004) 26 European Intellectual Property Review 1; and the dissenting judgment of Newman J in Integra Life Sciences v Merck KgaA 307 F 3d 1351 (2002).

[23]Micro Chemicals Ltd v Smith Kline & French Inter-American Corporation (1971) 25 DLR (3d) 79.

[24] Canadian Biotechnology Advisory Committee, Patenting of Higher Life Forms and Related Issues: Report to the Government of Canada Biotechnology Ministerial Coordinating Committee (2002), 14.

[25]Patent Act 1985 (Canada) s 55.2(1). Springboarding (regulatory review) provisions are discussed below.

[26] Ibid s 55.2(6).

[27] See Patents Act 1977 (UK) s 130(7).

[28] Ibid s 60(5).

[29]Monsanto Co v Stauffer Chemical Co [1985] RPC 515.

[30] Ibid, 538.

[31] Ibid, 542.

[32]Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] FSR 513, 524.

[33]Auchinloss v Agricultural & Veterinary Supplies Ltd [1999] RPC 397.

[34]Council Agreement relating to Community Patents No 89/695/EEC, 15 December 1989, OJ L 401/01. The Convention must be ratified by all European Union member States before it takes effect. Fewer than half of the member States have ratified it: European Union, Patents, <www.eurunion.org/legislat/ iiprop/patents.htm> at 5 August 2003.

[35] C Smith, ‘Experimental Use Exception to Patent Infringement: Where Does Australia Stand?’ (2003) 53 Intellectual Property Forum 14, 18.

[36] W Cornish, ‘Experimental Use of Patented Inventions in European Community States’ (1998) 29 International Review of Industrial Property and Copyright Law 735, 736. See also, Commission of the European Communities, Proposal for a European Council Regulation on the Community Patent, 1 August 2000, Commission of the European Communities, COM (2000) 412, art 9.

[37] W Cornish, ‘Experimental Use of Patented Inventions in European Community States’ (1998) 29 International Review of Industrial Property and Copyright Law 735, 752.

[38] Ibid, 752.

[39] Possibly including clinical tests of formulations of a patented active substance, as this will necessarily involve seeking new knowledge about clinical effectiveness, side-effects and so on: Ibid, 752, 753.

[40] Ibid, 738, 752.

[41] Ibid, 753.

[42] Ibid, 753.

[43] For example, the European Union experimental use exception may permit all clinical testing of a drug which genuinely seeks further information about its uses and about side-effects and other consequences of treatment: Ibid, 750–751.

[44] W Cornish, M Llewelyn and M Adcock, Intellectual Property Rights (IPRs) and Genetics (2003), 71.