|When a patent term is due to expire shortly, there is sometimes research exemption in the USA from drug patents for other manufacturers. This is also known as safe harbor exemption or Hatch Watchman exemption.
When the expiry of the term of a drug patent is approaching, research and tests on behalf of different manufacturers for submission of inputs to the Federal Drug Agency does not constitute infringement of the existing patent. This exemption is at best only for a limited period immediately before the end of the patent term in order to enable generic drug manufacturers to get ready in advance for generic drugs ahead of the patent expiry.
The US Supreme Court had the occasion to consider the scope of this exemption in the case of Merck versus Integra. The Supreme Court laid down that the Statute exempts from infringement any use of a compound in connection with the submission of information to the government under any law regulating the manufacture, use or marketing of drugs.
The US Supreme Court has also endorsed the use of patented inventions or compounds in pre clinical studies where there are reasonable chances that such experiment might result in new drug application.
Further, use of a patented invention for research purpose used to enjoy research exemption under the common law. However, Courts have considerably narrowed down the scope of such research exemption to use of patented invention for "amusement, to satisfy idle curiosity, or for strictly philosophical inquiry."