CONCLUSION

For the foregoing reasons, Roche's motion should be grant

ed, Zenith's first and second counterclaims should be dismissed and the last three lines of the fifth affirmative defense should be stricken.

Respectfully submitted,

CRUMMY, DEL DEO, DOLAN & PURCELL

BY

Richard S. Zackin

Attorneys for Plaintiff
Hoffmann-La Roche Inc.

On the Brief:

Fisher, Christen & Sabol

1000 Connecticut Avenue Washington, D.C. 20036

Watson, Leavenworth, Kelton & Taggart 100 Park Avenue

New York, N. Y. 10017

1.

2.

A copy of the October 11, 1983 decision of Judge
Wexler in Roche v. Bolar.

A copy of our Amicus Brief on behalf of the Generic Pharmaceutical Industry Association on the appeal from Judge Wexler's opinion.

The Roche v. Bolar case was argued before the Federal Circuit on February 9, 1984. As I indicated during our telephone conversation, you may also wish to look at Pfizer v. IRC, 217 U.S.P.Q. 157, which is a Central District of California decision involving a somewhat similar issue, but a vastly different set of facts.

It is our belief that the experimental exception language which we proposed to you during our telephone conversation (copy enclosed) represents a fair solution to this problem. It would ensure that the patent owner obtains the full exclusivity from a patent for 17 years but could not receive a monopoly which would extend beyond that time period. The proposed experimental use exception is entirely consistent with the principles embodied within the "fair use" exception to copyright infringement. In that regard, we direct your attention to the following langugage of the Supreme Court in its recent Betamax decision:

"The purpose of copyright is to create
incentives for creative effort. Even
copying for noncommercial purposes may
impair the copyright holder's ability
to obtain the rewards that Congress
intended him to have. But a use that
has no demonstrable effect upon the
potential market for, or the value of,
the copyrighted work need not be pro-
hibited in order to protect the author's
incentive to create."

The philosophy embodied in the foregoing language would appear to be equally applicable to the patent law which is derived from the same constitutional provision.

Please let me know if we can be of further assistance

We have been requested by David Beier, Assistant Counsel of the Subcommittee, to comment on Mr. Engelberg's letter to you dated July 20, 1984.

Two contentions are made in Mr. Engelberg's letter:
first, that the decision in Roche v. Bolar made "completely
new law" and, second: that the Court of Appeals' decision
"was contrary to industry practices and expectations."
We believe that neither of these two points are support-
able. Bolar is a continuation of pre-existing law, and
we are aware of no industry practice which condones open
testing of patented drugs for submission of data to the
FDA for clearance preparatory to post-expiration marketing.
Commissioner of Patents and Trademarks Mossinghoff,
himself, testified that the Bolar decision was the correct
application of hornbook patent law. It should be recalled
that in the Bolar litigation, it was the defendant, Bolar,
which sought to change the established law by having the
Court add a new category to the "experimental use" excep-
tion. The Court of Appeals rejected that attempt. It
upheld the patent law's grant to the patentee of the
exclusive right to use the patented substance. It re-
iterated that the doctrine of experimental use did not
encompass pre-expiration testing when it was done for
plainly commercial purposes. In this respect, the Court's
analysis was consistent with the way the experimental use

doctrine has been applied since it was introduced almost 200 years ago. See Roche v. Bolar, 733 F.2d 858, 862-63 (Fed. Cir. 1984). Bolar reaffirmed the law. It did not change it.

In support of the assertion that "industry practices" have permitted the testing of patented substances for FDA approval, Mr. Engelberg's letter contains selective excerpts from the record in one patent infringement action between Roche and Zenith. His analyses of the facts are incorrect. Roche is not aware of any such "industry practice." If some generic manufacturers engaged covertly in pre-expiration tests for later business use, that practice could hardly result in depriving a patentee of his rights. For to do so would be to reward deception.

As to the specific allegations concerning the Zenith litigation, Mr. Engelberg's letter fails to mention that Roche's 1975 complaint specifically alleged that Zenith's infringing activities included steps that had been taken by Zenith "to secure approval from the United States Food & Drug Administration for [Zenith] to market and distribute diazepam." Complaint, Hoffmann-La Roche Inc. v. Zenith Laboratories, Inc., Civil Action No. 75-2221, para. 9. This is

In full text, paragraph 9 of Roche's complaint stated:

"On information and belief, steps have been
taken to secure approval from the United
States Food & Drug Administration for de-
fendant (and/or its subsidiaries or those
with whom it is in concert or controls) to
market and distribute for use in this
country diazepam and/or pharmaceutical
preparations containing diazepam as an
active ingredient, and to sell to others
and enable them to market diazepam and
preparations containing diazepam as an
active ingredient; or, alternatively,

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