Editors Note: Kevin E. Flynn is a patent attorney and a member of the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A. I have seen rumbles as far away as New Zealand on the allegedly groundbreaking law with respect to a dispute between Duke University and a former Duke professor.

The odd thing about this case is that it is being held out as a serious blow to academic freedom and represents a major change in the law with respect to a rare “experimental use” defense in patent law. Neither is true.

While any dispute is a big deal to the parties involved, this case isn’t a perfect poster child for some cosmic goal to save academic freedom from the yoke of oppressive patent laws. Nor is it really a change in the law.

(I need to admit that I have both engineering and a law degree from Duke and thus all things being equal, I root for Duke.)

It is time to put this case into context.

The dispute

This case has been rumbling around since November of 1997, so it may be worth a quick refresher on the facts as reported in the court decisions.

In the late 1980s, Duke recruited Dr. Madey from Stanford to come to Duke and bring his Free Electron Laser (FEL), a device that had been awarded two patents held by Madey.

Things went well for many years. Duke built a new home for the laser. Madey and Duke secured a number of research grants, and people learned things through the use of the FEL. Eventually, the honeymoon was over; Duke grew dissatisfied with Madey in his role as FEL Lab Director and removed him from that position. This made Madey angry and he moved away.

Madey then sued Duke, claiming among other things patent infringement arising from Duke’s activities in the FEL lab despite the ownership of the original two patents by the now gone (and angry) Madey.

The result heard round the world

Why did so many people, including academics, care about this case?

Duke asserted what is known as the “experimental use” defense. This is a defense that had been thought by many in the academic community to constitute as a free pass to do whatever they wanted, without regard to patent rights held by others. Duke successfully asserted the experimental use defense in the District Court in a summary judgment motion, as that Court seemed to fixate on the University’s non-profit status and thought that the defense applied generally to uses “solely for research, academic, or experimental purposes.”

However, when brought up to the appellate court for patent matters in the US, the Federal Circuit said “NO!” to Duke, and restated the law emphatically.

The Federal Circuit conveyed that the experimental use defense is virtually worthless as it can only be used to defend infringement done “for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry” (envision Ben Franklin tinkering in a lab in the basement).

Just to be sure Duke heard them loud and clear the Federal Circuit noted:

“our precedent does not immunize any conduct that is in keeping with the alleged infringer’s legitimate business, regardless of its commercial implications. For example, major research universities, such as Duke, often sanction and fund research projects with arguably no commercial application whatsoever. However these projects unmistakably further the institutions’ legitimate business objectives, including educating and enlightening students and faculty participating in these projects. The projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students and faculty.”

Not surprisingly, when the case was sent back to the District Court with this “guidance,” Duke’s attempt to use the experimental use defense was denied in an opinion released in September of 2004.

Putting it in context

With that understanding of the general fact pattern, it is odd that this case, which was essentially an employment dispute between an academic and his employer, is being used as a poster child for academic freedom. Duke brought Madey to Durham to set up the FEL lab and knew of the existing Madey patents. Presumably with appropriate bargaining power, Duke could have secured the rights to continue to use the Madey patents even if Madey died or left the University. This would not have been an unreasonable requirement given the financial investment in facilities and staff to be made by Duke to set up and maintain the FEL lab. Obviously, it was not in Madey’s interest to grant such a license to Duke, which would reduce his leverage with Duke should he threaten to quit.

These same issues arise frequently in entrepreneurial companies where one or more of the founders have IP rights that they hold before a venture starts. The IP owners and the others who contribute time or money to a venture have legitimate interests in working out whether the venture will continue to be licensed to use the founders’ IP rights even after the founders leave. Parties come to different agreements on what will happen under various termination scenarios.

The Madey v Duke dispute does not mark a shift in patent law, just the Federal Circuit getting more vehement in warnings not to bother with the experimental use defense. The academic community, which filed an amicus (friend of the court) brief to get the US Supreme Court to take up the Madey v Duke case to weigh in on the experimental use defense should have fought this battle earlier.

One candidate was an earlier case also arising out of North Carolina, Embrex v. Service Engineering Corp. In the Embrex/SEC case, the Federal Circuit upheld findings of infringement for actions by SEC. SEC had engaged the services of Dr. Rosenberger, a leading academic in poultry science, to test the efficacy of an alternative to the patented process licensed to Embrex for vaccinating chickens before they hatched. Measuring the efficacy of a new method, even benchmarking a new method against a previously patented method, seemed to be a better cause for the academic community to champion than an employment dispute with an academic. As with most research requested by an industrial partner, there were commercial interests in the outcome. Some of the testing performed by Rosenberger was deemed to fall within the scope of the patented process.

Because of the commercial interest in the testing, the experimental use defense and a related de minimus (almost no infringement at all) defense asserted by SEC for the work done by the professor, were shredded by the trial court. The Federal Circuit affirmed these appealed issues in 2000. Just to be sure that people got the point, one of the appellate judges wrote a concurrence to emphasize that these defenses had no power or vitality.

As I worked on some of the early stage work for the Embrex/SEC case (on the SEC side), I am biased towards supporting the work done by Dr. Rosenberger. However, the law is what it is, and sometimes that is not what you hoped it would be. Academics (and those that fund their research) need to face up to the current state of the law and seek help from Congress if they want special rights to do things covered by patents owned by others. This effort has already started with the National Academy of Sciences weighing in to seek changes in the patent laws to protect university research. Stay tuned for further developments.

Daniels Daniels & Verdonik, P.A. has been serving the legal needs of entrepreneurial and high technology clients for more than 20 years. Kevin Flynn combines the knowledge and experience that he has obtained as an engineer, lawyer, and patent lawyer to provide guidance to clients on a range of patent and other legal issues. Questions or Comments can be sent to kflynn@d2vlaw.com