There are a number of bills that have been recently introduced into Congress that in one way or another are designed to overcome the restrictions on importation of prescription drugs from Canada and elsewhere. Few of the bills address the patent issues in the importation process. One bill, however, The Pharmaceutical Market Access and Drug Safety Act of 2004 , S.2328, would amend the Patent Act of 1952 to eliminate patent infringement liability for the import of a drug first sold abroad by or under the authority of the owner or licensee of the patent.
This bill would in effect codify the so called "first sale" or "international exhaustion" doctrine into U.S. Patent law making it less risky for importers of cheaper, "grey market" drugs into the country. The basic principal of the exhaustion principle is that an unconditional sale of patent product exhausts the patentee's right to control the purchaser's use of the product thereafter under the theory that the patentee has bargained for, and received an amount equal to the full value of the goods.
In Jazz Photo Corp. v. United States International Trade Commission, 264 F. 3d 1094 (Fed.Cir. 2001), the Court of Appeals for the Federal Circuit rejected the "international exhaustion" doctrine and limited exhaustion to sales occurring within the United States. The opinion has been much criticized and may well be limited in future cases because of its reliance upon very narrow precedent and overbroad application, but it does raise the specter of patent infringement lawsuits against importers of U.S. patented drugs from abroad. While importing states have some levels of immunity protection from patent infringement claims, private importers do not. The PMADSA approach, if passed, could make it substantially easier to parallel import cheaper drugs into the United States. This is probably not likely to happen if the pharmaceutical lobby in Washington is awake at the switch.
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