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35 U.S.C. § 271(e)(1) Safe Harbor Extends to Products Produced by Patented Processes in Section 337 Actions

March 19, 2008

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Last Month at the Federal Circuit - April 2008

Judges: Newman (author), Lourie, Linn (concurring-in-part and dissenting-in-part)

[Appealed from: ITC]

In Amgen, Inc. v. International Trade Commission, No. 07-1014 (Fed. Cir. Mar. 19, 2008), the Federal Circuit affirmed the ITC’s ruling that the safe harbor provided by 35 U.S.C. § 271(e)(1) applies in section 337 proceedings to imported products made by patented processes. The Court also reversed the ITC’s ruling that it had no jurisdiction, absent a sale or offer to sell the imported product, to determine violations of section 337 of the Tariff Act.

Amgen, Inc. (“Amgen”) requested the ITC to initiate an investigation, alleging that certain importations of recombinant human erythropoietin and its derivatives (collectively “EPO”) violated section 337 of the Tariff Act by infringing at least one claim of Amgen’s six EPO patents. Moving for summary determination of noninfringement, intervenors Roche Holding Ltd., F. Hoffmann-La Roche Ltd., Roche Diagnostics GmbH, and Hoffmann-La Roche, Inc. (collectively “Roche”) submitted that the imported EPO qualified for the FDA safe harbor exemption under 35 U.S.C. § 271(e)(1), as the imported EPO was used to develop and submit information regarding the manufacture, sale, and use of drugs. The ITC granted the motion for noninfringement.

On appeal, Amgen argued that the safe harbor exemption of § 271(e) did not extend to section 337 violations based on foreign practice of patented processes. Amgen argued that the 1988 enactment of 35 U.S.C. § 271(g), which provides a remedy in the district courts for offshore practice of a patented process but explicitly applies the safe harbor exemption of § 271(e), showed congressional intent to limit the safe harbor to process patents that would be enforced in district courts and did not extend to section 337 violations.

The Federal Circuit disagreed, holding that the safe harbor provision of 35 U.S.C. § 271(e) applies in section 337 actions to imported products produced by patented processes. In particular, the Court noted the “broadly stated congressional policy” found in the legislative history of 35 U.S.C. § 271(g), which stated that “the Committee does not intend that it shall be an act of infringement to import a product which is made by a process patented in the United States ‘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.’ See 271(e)(1) of title 35, United States Code.” Slip op. at 8. Moreover, the Federal Circuit referred to Merck KgaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005), and Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990), which noted the congressional purpose of removing patent-based barriers for federal regulatory approval of medical products.

Nonetheless, the Court remanded for consideration of the exempt status of each Roche study using the imported EPO. Amgen asserted that at least some of the imported Roche EPO was not exempt because its actual use did not comply with the requirement of § 271(e)(1). It submitted that Roche had completed its submission to the FDA and had shifted its activities to infringement analysis, market-seeding trials, and litigation-related studies that were not protected by the safe harbor.

The Federal Circuit found that the ITC appeared to have assumed that all otherwise infringing activities are exempt if conducted during the period before regulatory approval was granted. The Court held that assumption to be incorrect because “[e]ach of the accused activities must be evaluated separately to determine whether the exemption applies.” Slip op. at 10 (alteration in original) (citing Merck, 545 U.S. at 200).

Finally, the Court considered the jurisdiction of the ITC to investigate. The ITC held that it lacked jurisdiction to investigate an importation subject to a safe harbor, absent an actual sale or contract for sale of the imported product. Amgen asserted that the ITC’s jurisdiction was appropriate because the importation and potential injury to the domestic industry were real and that Roche’s sale was imminent. In addition, Amgen submitted that Roche’s application for FDA approval established an intent to sell the imported EPO.

Agreeing with Amgen, the Court noted that the projected FDA approval established the ITC’s jurisdiction to investigate and provide a remedy that takes effect after FDA approval is granted, and the safe harbor exemption no longer applies. Moreover, “[w]hen it has been shown that infringing acts are reasonably likely to occur, the Commission’s obligation and authority are properly invoked.” Id. at 15.

In a concurring-in-part and dissenting-in-part opinion, Judge Linn focused on the plain language of the statutes. While Judge Linn agreed that it makes sense for the safe harbor provision to apply to section 337, he noted that “the problem remains that if that is what Congress intended, it is not what Congress unambiguously said.” Linn op. at 2. Judge Linn expressed that synchronizing the safe harbor provision of section 271 with the Tariff Act was not a decision for the Court to make.