JOHN M.J. MADEY, Plaintiff-Appellant, v. DUKE UNIVERSITY, Defendant-Appellee.



307 F.3d 1351; 2002 U.S. App. LEXIS 20823; 64 U.S.P.Q.2D (BNA) 1737

October 3, 2002, Decided

Before BRYSON, GAJARSA, and LINN, Circuit Judges.
GAJARSA, Circuit Judge.

Dr. John M.J. Madey ("Madey") appeals from a judgment of the United States District Court for the Middle District of North Carolina. Madey sued Duke University ("Duke"), bringing claims of patent infringement and various other federal and state law claims. Pursuant to a motion filed by Duke under Federal Rule of Civil Procedure ("FRCP") 12(b)(1), the district [**2]  court dismissed-in-part certain patent infringement claims and dismissed certain other claims. Madey v. Duke Univ., 1999 U.S. Dist. LEXIS 21379, No. 1:97CV1170, slip op. at 12-14, 38-40 (M.D.N.C. Dec. 1, 1999) ("Dismissal Opinion"). After discovery, the district court granted summary judgment in favor of Duke on the remaining claims. For a first set of alleged infringing acts, it held that the experimental use defense applied to Duke's use of Madey's patented laser technology. For a second set of alleged infringing acts, it held that Duke was not the infringing party because a third-party owned and controlled the allegedly infringing laser equipment. Madey v. Duke Univ., No. 1:97CV1170, slip op. at 12-15, 18, 20 (M.D.N.C. June 15, 2001) ("Summary Judgment Opinion"). The district court erred in its partial dismissal, erred in applying the experimental use defense, but, for the second set of alleged infringing acts, correctly determined that Duke did not infringe because it did not own or control the equipment. Accordingly, we reverse-in-part, affirm-in-part, and remand.


In the mid-1980s Madey was a tenured research professor at Stanford University. At Stanford, he had an innovative [**3]  laser research program, which was highly regarded in the scientific community. An opportunity arose for Madey to consider leaving Stanford and take a tenured position at Duke. Duke recruited Madey, and in 1988 he left Stanford for a position in Duke's physics department. In 1989 Madey moved his free electron laser ("FEL") research lab from Stanford to Duke. The FEL lab contained substantial equipment, requiring Duke to build an addition to its physics building to house the lab. In addition, during his time at Stanford, Madey had obtained sole ownership of two patents practiced by some of the equipment in the FEL lab.

At Duke, Madey served for almost a decade as director of the FEL lab. During that time the lab continued to achieve success in both research funding and scientific breakthroughs. However, a dispute arose between Madey and Duke. Duke contends that, despite his scientific prowess, Madey ineffectively managed the lab. Madey contends that Duke sought to use the lab's equipment for research areas outside the allocated scope of certain government funding, and that when he objected, Duke sought to remove him as lab director.  [*1353]  Duke eventually did remove Madey as director of the [**4]  lab in 1997. The removal is not at issue in this appeal, however, it is the genesis of this unique patent infringement case. As a result of the removal, Madey resigned from Duke in 1998. Duke, however, continued to operate some of the equipment in the lab. Madey then sued Duke for patent infringement of his two patents, and brought a variety of other claims.

The Patents and Infringing Equipment

One of Madey's patents, U.S. Patent No. 4,641,103 ("the '103 patent"), covers a "Microwave Electron Gun" used in connection with free electron lasers. The other patent, U.S. Patent No. 5,130,994 ("the '994 patent"), is titled "Free-Electron Laser Oscillator For Simultaneous Narrow Spectral Resolution And Fast Time Resolution Spectroscopy." The details of these two patents are not material to the issues on appeal. Their use in the lab, however, as embodied in certain equipment, is central to this appeal.

The equipment at the Duke FEL lab that practices the subject matter disclosed and claimed in the patents is set forth in the list below, which first lists the equipment and then the patent(s) it embodies.
. An infrared FEL called the "Mark III FEL," embodying the '994 patent and the [**5]  '103 patent (by incorporating the microwave electron gun in the infrared FEL).
. A "Storage Ring FEL," embodying the same patents as the Mark III FEL because it incorporates a Mark III FEL.
. A "Microwave Gun Test Stand," embodying the '103 patent (by incorporating the microwave electron gun).

The three alleged infringing devices are the Mark III FEL, the Storage Ring FEL, and the Microwave Gun Test Stand. Although it is not clear from the record, perhaps because Duke defended by asserting experimental use and government license defenses, Duke seems to concede that the alleged infringing devices and methods read on the claims of the patents. Although the three devices were housed in Duke's physics facilities, the Microwave Gun Test Stand was not Duke's asset, but rather belonged to North Carolina Central University ("NCCU").....

The District Court's Summary Judgment Opinion

Among Duke's motions for summary judgment, two are relevant on appeal, entitled by the district court as: (i) the "Patent Motion;" and (ii) the "Test Stand Gun Motion."

The Patent Motion and the Experimental Use Defense

The district court acknowledged a common law "exception" for patent infringement liability for uses that, in the district court's words, are "solely for research, academic or experimental purposes." Summary Judgment Opinion at 9 (citing Deuterium Corp. v. United States, 19 Cl. Ct. 624, 631, 14 U.S.P.Q.2D (BNA) 1636, 1642 (1990); Whittemore v. Cutter, 1 Gall. 429, 29 F. Cas. 1120 (C.C.D. Mass. 1813) (No. 17,600); and citing two commentators n2 ). The district court recognized the debate over the scope of the experimental use defense, but cited this court's opinion in Embrex, Inc. v. Service Engineering Corp., 216 F.3d 1343, 1349, 55 U.S.P.Q.2D (BNA) 1161, 1163 (Fed. Cir. 2000) to hold that the defense was viable for experimental, non-profit purposes. Summary Judgment Opinion at 9 (citing Embrex, 216 F.3d at 1349, 55 U.S.P.Q.2D (BNA) at 1163 (noting that courts should not [**11]  "construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of 'scientific inquiry,' when that inquiry has definite, cognizable, and not insubstantial commercial purposes" (quoting Roche Prods., Inc. v. Bolar Pharm. Co., 733 F.2d 858, 863, 221 U.S.P.Q. (BNA) 937, 940 (Fed. Cir. 1984)) n3 )).

After having recognized the experimental use defense, the district court then fashioned the defense for application to Madey in the passage set forth below.

Given this standard [for experimental use], for [Madey] to overcome his burden of establishing actionable infringement in this case, he must establish that [Duke] has not used the equipment at issue "solely for an experimental or other non-profit purpose." 5 Donald S. Chisum, Chisum on Patents 16.03[1] (2000). More specifically, [Madey] must sufficiently establish that [Duke's] use of the patent had "definite, cognizable, and not insubstantial commercial purposes." Roche Prods., Inc. v. Bolar Pharm. Co., 733 F.2d 858, 863 (Fed. Cir. 1984), cert. denied, 469 U.S. 856, 83 L. Ed. 2d 117, 105 S. Ct. 183 (1984).
Summary Judgment Opinion at 10.

On appeal, Madey attacks this passage as improperly shifting the burden to the plaintiff to allege and prove that the defendant's use was not experimental.

Before the district court, Madey argued that Duke's research in its FEL lab was commercial in character and intent. Id. Madey relied on Pitcairn v. United States, 212 Ct. Cl. 168, 547 F.2d 1106, 192 U.S.P.Q. (BNA) 612 (Ct. Cl.  [*1356]  1976), [**13]  where the government used patented rotor structures and control systems for a helicopter to test the "lifting ability" and other attributes of the patented technology. Pitcairn, 547 F.2d at 1125-26, 192 U.S.P.Q. (BNA) at 625. The Pitcairn court held that the helicopters were not built solely for experimental purposes because they were also built to benefit the government in its legitimate business. Id. Based on language in Duke's patent policy, Madey argues that Duke is in the business of "obtaining grants and developing possible commercial applications for the fruits of its 'academic research.'" Summary Judgment Opinion at 11.

The district court rejected Madey's argument, relying on another statement in the preamble of the Duke patent policy which stated that Duke was "dedicated to teaching, research, and the expansion of knowledge . . . [and] does not undertake research or development work principally for the purpose of developing patents and commercial applications." Id. The district court reasoned that these statements from the patent policy refute any contention that Duke is "in the business" of developing technology for commercial applications. Id.  [**14]  at 12. According to the district court, Madey's "evidence" was mere speculation, n4 and thus Madey did not meet his burden of proof to create a genuine issue of material fact. n5 Id. The court went on to state that "without more concrete evidence to rebut [Duke's] stated purpose with respect to its research in the FEL lab, Plaintiff has failed to meet its burden of establishing patent infringement by a preponderance of the evidence." Id. at 13....

The District Court's Application of Experimental Use

On appeal, Madey asserts three primary errors related to experimental use. First, Madey claims that the district court improperly shifted the burden to Madey to prove that Duke's use was not experimental. Second, Madey argues that the district court applied an overly broad version of the very narrow experimental use defense inconsistent with our precedent. Third, Madey attacks the supporting evidence relied on by the district court as overly general and not indicative of the specific propositions and findings required by the experimental use defense, and further argues that there is no support in the record before us to allow any court to apply the very narrow experimental use defense to Duke's ongoing FEL lab operation. We substantially agree with Madey on all three points. In addition, Madey makes a threshold argument concerning the continued existence of the experimental use doctrine in any form, which we turn to first. Our precedent, to which we are bound, continues to recognize the judicially created [**27]  experimental use defense, however, in a very limited form.

The Experimental Use Defense

Citing the concurring opinion in Embrex, Madey contends that the Supreme Court's opinion in Warner-Jenkinson Co. v. Hilton-Davis Chem. Co., 520 U.S. 17, 137 L. Ed. 2d 146, 117 S. Ct. 1040 (1997) eliminates the experimental use defense. Embrex, 216 F.3d at 1352-53, 55 U.S.P.Q.2D (BNA) at 1166-67 (Rader, J., concurring). The Supreme Court held in Warner-Jenkinson that intent plays no role in the application of the doctrine of equivalents. Warner-Jenkinson, 520 U.S. at 36. Madey implicitly argues that the experimental use defense necessarily incorporates an intent inquiry, and thus is inconsistent with Warner-Jenkinson.  [*1361]  Like the majority in Embrex, we do not view such an inconsistency as inescapable, and conclude the experimental use defense persists albeit in the very narrow form articulated by this court in Embrex, 216 F.3d at 1349, 55 U.S.P.Q.2D (BNA) at 1163, and in Roche, 733 F.2d at 863, 221 U.S.P.Q. (BNA) at 940.

The District Court Improperly Shifted the Burden to Madey

As a precursor to the burden-shifting issue,  [**28]  Madey argues that the experimental use defense is an affirmative defense that Duke must plead or lose. We disagree. Madey points to no source of authority for its assertion that experimental use is an affirmative defense. Indeed, we have referred to the defense in a variety of ways. See Roche, 733 F.2d at 862, 221 U.S.P.Q. (BNA) at 939-40 (referring to experimental use as both an exception and a defense). Given this lack of precise treatment in the precedent, Madey has no basis to support its affirmative defense argument. The district court and the parties in the present case joined the issue during the summary judgment briefing. We see no mandate from our precedent, nor any compelling reason from other considerations, why the opportunity to raise the defense if not raised in the responsive pleading should not also be available at the later stages of a case, within the procedural discretion typically afforded the trial court judge.

The district court held that in order for Madey to overcome his burden to establish actionable infringement, he must establish that Duke did not use the patent-covered free electron laser equipment solely for experimental or other non-profit purposes.  [**29]  Summary Judgment Opinion at 10. Madey argues that this improperly shifts the burden to the patentee and conflates the experimental use defense with the initial infringement inquiry.

We agree with Madey that the district court improperly shifted the burden to him. The district court folded the experimental use defense into the baseline assessment as to whether Duke infringed the patents. Duke characterizes the district court's holding as expressing the following sequence: first, the court recognized that Madey carried his burden of proof on infringement; second, the court held that Duke carried its burden of proof on the experimental use defense; and third, the court held that Madey was unable to marshal sufficient evidence to rebut Duke's shifting of the burden. We disagree with Duke's reading of the district court's opinion. See Summary Judgment Opinion at 8-14. The district court explicitly contradicts Duke's argument by stating that Madey failed to "meet its burden to establish patent infringement by a preponderance of the evidence." Id. at 13. This statement is an assessment of whether Madey supported his initial infringement claim. It is not an assessment of which [**30]  party carried or shifted the burden of evidence related to the experimental use defense. Thus, the district court did not conclude that Madey failed to rebut Duke's assertion of the experimental use defense. Instead, it erroneously required Madey to show as a part of his initial claim that Duke's use was not experimental. The defense, if available at all, must be established by Duke.

The District Court's Overly Broad Conception of Experimental Use

Madey argues, and we agree, that the district court had an overly broad conception of the very narrow and strictly limited experimental use defense. The district court stated that the experimental use defense inoculated uses that "were solely for research, academic, or experimental purposes," and that the defense covered use that "is made for experimental, non-profit purposes only." Id. at 9. Both formulations are too broad and stand in sharp  [*1362]  contrast to our admonitions in Embrex and Roche that the experimental use defense is very narrow and strictly limited. In Embrex, we followed the teachings of Roche and Pitcairn to hold that the defense was very narrow and limited to actions performed "for amusement, to [**31]  satisfy idle curiosity, or for strictly philosophical inquiry." Embrex, 216 F.3d at 1349, 55 U.S.P.Q.2D (BNA) at 1163. Further, use does not qualify for the experimental use defense when it is undertaken in the "guise of scientific inquiry" but has "definite, cognizable, and not insubstantial commercial purposes." Id. (quoting Roche, 733 F.2d at 863, 221 U.S.P.Q. (BNA) at 941). The concurring opinion in Embrex expresses a similar view: use is disqualified from the defense if it has the "slightest commercial implication." 216 F.3d at 1353, 55 U.S.P.Q.2D (BNA) at 1166. Moreover, use in keeping with the legitimate business of the alleged infringer does not qualify for the experimental use defense. See Pitcairn, 547 F.2d at 1125-26, 192 U.S.P.Q. (BNA) at 625. The district court supported its conclusion with a citation to Ruth v. Stearns-Roger Mfg. Co., 13 F. Supp. 697, 713 (D. Colo. 1935), a case that is not binding precedent for this court.

The Ruth case represents the conceptual dilemma that may have led the district court astray. Cases evaluating the experimental use defense are few, and those involving non-profit, educational alleged infringers [**32]  are even fewer. In Ruth, the court concluded that a manufacturer of equipment covered by patents was not liable for contributory infringement because the end-user purchaser was the Colorado School of Mines, which used the equipment in furtherance of its educational purpose. Id. Thus, the combination of apparent lack of commerciality, with the non-profit status of an educational institution, prompted the court in Ruth, without any detailed analysis of the character, nature and effect of the use, to hold that the experimental use defense applied. Id. This is not consistent with the binding precedent of our case law postulated by Embrex, Roche and Pitcairn.

Our precedent clearly does not immunize use that is in any way commercial in nature. Similarly, our precedent does not immunize any conduct that is in keeping with the alleged infringer's legitimate business, regardless of 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 institution's legitimate business objectives, including educating [**33]  and enlightening students and faculty participating in these projects. These projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students and faculty.

In short, regardless of whether a particular institution or entity is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer's legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense. Moreover, the profit or non-profit status of the user is not determinative.

In the present case, the district court attached too great a weight to the non-profit, educational status of Duke, effectively suppressing the fact that Duke's acts appear to be in accordance with any reasonable interpretation of Duke's legitimate business objectives. n7 On remand, the district  [*1363]  court will have to significantly narrow and limit its conception of the experimental use defense. The correct focus should not be on the non-profit status of Duke but on the legitimate business Duke is involved in and whether [**34]  or not the use was solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry....


The district court erred in its application of the common law experimental use defense, and, consequently, incorrectly found that there was no genuine issue of material fact upon which Madey could prevail....  Due to these errors, further proceedings are necessary.... Accordingly, we affirm-in-part and reverse-in-part the district court's decision and remand for additional proceedings consistent with this opinion.