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? 271(e) safe harbor applies to both product and method claims in ITC proceedings
March 19, 2008
In a ruling today, the Federal Circuit affirmed in part a decision by the International Trade Commission (ITC) concerning the application of 19 U.S.C. § 1337 and 35 U.S.C. § 271(e)(1) to imported products and products imported produced via a patented process. The main issue before the court was whether the safe harbor against infringement provided by § 271(e) applies in proceedings under § 1337 relating to method patents. The court determined that applying the safe harbor exemption would further congressional policy of removing patent-based barriers to federal regulatory approval of medical products, and therefore the safe harbor applied.In a partial dissent, Judge Linn agreed that the policies of § 271(e) would be furthered by its application to § 1337 proceedings, but that the plain text of the statute precluded that result. In his words:
I see no basis for concluding that Congress did not intend what it said. I do not disagree with the majority's policy judgment that § 1337 and § 271 should be brought into synchrony. But that is not a decision for a court to make, particularly in light of the legislative history.

The court also determined that jurisdiction was appropriate as the ITC's assignment is to prevent and remedy unfair acts flowing from infringement. The ITC's jurisdiction under § 1337, according to the court, is broad, and it therefore erred in holding that it lacked jurisdiction absent an actual sale or contract for sale of the imported product.More detail of Amgen, Inc. v. Int'l Trade Comm'n after the jump,Amgen owns several patents relating to recombinant human erythropoietin and its derivatives (collectively "EPO"). Some of these patents relate to the process by which it is produced. Amgen filed a complaint with the International Trade Commission (ITC) charging that certain importations of EPO were in violation of Section 337 of the Tariff Act, which provides, in relevant part,:

(a)(1) Subject to paragraph (2), the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section:

. . .

(B) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that--
(i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright under title 17, United States Code; or
(ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent. . . .

. . .

(b)(1) The Commission shall investigate any alleged violation of this section on complaint under oath or upon its initiative. . . . The Commission shall conclude any such investigation and make its determination under this section at the earliest practicable time . . . .

After the filing of this complaint, Roche intervened in the proceedings as the producer and importer of the accused EPO. Roche moved for summary determination of noninfringement on the grounds that imported EPO is exempt from infringement by operation of the safe harbor provision of 35 U.S.C. § 271(e)(1). Roche asserted that the imported EPO was being used only for its statutorily exempt purpose. § 271(e)(1) provides, in relevant part:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

The ITC rejected Amgen's assertion that the § 271(e)(1) reference to importing "a patented invention" is necessarily limited to importation of a product because a process cannot be imported, and as a result, granted Roche's motion. Amgen subsequently appealed and again asserted that the safe harbor provision did not apply to Tariff Act violations based on foreign practice of a patented process. Amgen also raised the issue that some of Roche's uses of the imported EPO were used outside the boundaries of the safe harbor provision.A majority of a Federal Circuit panel affirmed this conclusion. The court found the ITC's ruling to be "in consonance with congressional policy as set forth in enactment of § 271(g), and as elaborated by the Supreme Court in its applications of the safe harbor statute." These policy purposes, according to the court, weighed heavily against selectively withholding the safe harbor provision solely because the case was an action under § 1337 before the ITC rather than an infringement action before a district court.The court did, however, reverse the ITC's ruling that all of Roche's activities were within the safe harbor provision. Amgen asserted that Roche had shifted its attention in the United States to infringement analysis experiments, market-seeding trials, and litigation-related activity. These activities, according to the court, warranted separate evaluation to determine whether the safe harbor exemption applies, as at least some of these activities were conducted after Roche submitted its Biologics License Application to the FDA. Roche did not dispute that some of the imported EPO was used to conduct marketing department studies for brand recognition. Thus, the ITC erred in assuming that all otherwise infringing activities were exempt if conducted before regulatory approval is granted, and the court remanded the case to the ITC to determine whether some of the activities were outside the safe harbor.Finally, the court determined that ITC erred in holding that it did not have jurisdiction to investigate and remedy infringement because there was no actual sale or contract for sale of the imported product. The court noted that the ITC's power was broad and it was authorized to "prevent unfair acts in their incipiency." The ITC's assignment is to prevent and remedy unfair facts flowing from infringing acts which are reasonably likely to occur, and as a result, the ITC had jurisdiction to hear the claims even though there had not yet been an actual sale or contract for sale of the product.In a partial dissent, Judge Linn disagreed with the majority's holding that the § 271(e)(1) safe harbor extends to § 1337 actions based on method patents. Judge Linn focused on the differences in language between § 271(e) and § 1337, noting that they were not coextensive. Judge Linn noted that § 271(e) declares that certain activities "shall not be an act of infringement." However, § 1337(a)(1)(B)(ii) (which governs method claims) only requires that the process fall within the claims of a valid and enforceable U.S. patent, not that there be an act of infringement. The corresponding section relating to product claims, § 1337(a)(1)(B)(i), does require that the accused product infringe a valid patent. As a result, according to Judge Linn, based on the actual statutory text, § 271(e)(1) only applies to § 1337 claims brought under product claims, not method claims. As summarized by Judge Linn:

The thrust of the majority's position is that Congress probably intended § 271(e)(1) to apply in section 337 proceedings the same way it applies in patent infringement litigation under Title 35. While I agree that it would make sense for section 337 to apply that way, the problem remains that if that is what Congress intended, it is not what Congress unambiguously said.. . . I see no basis for concluding that Congress did not intend what it said. I do not disagree with the majority's policy judgment that § 1337 and § 271 should be brought into synchrony. But that is not a decision for a court to make, particularly in light of the legislative history.

To read the full decision in Amgen, Inc. v. Int'l Trade Comm'n, click here.

Patently-O provides this post on the decision, and the Patent Hawk offers these thoughts.

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