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Statutory Scheme for Protesting Seizure Does Not Divest District Court of Jurisdiction to Consider an Injunction

August 24, 2006

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Last Month at the Federal Circuit - September 2006

Judges: Rader (author), Clevenger, Dyk

[Appealed from: D.N.J., Judge Hayden]

 In Fuji Photo Film Co. v. Benun, No. 05-1445 (Fed. Cir. Aug. 23, 2006), the Federal Circuit affirmed the district court’s imposition of a preliminary injunction enjoining he defendants from, among other things, importing certain lens fitted film packages (“LFFPs”), sometimes called “disposable” or “single use” cameras, into the United States.

In April 2005, Fuji sued Ribi Tech Products LLC and others (collectively “Ribi Tech”), alleging infringement of its patents covering aspects of LFFP technology and moved for an emergency order and a preliminary injunction. The dispute between the parties, however, dates back to 1998 at the ITC, when Fuji sought to bar the import of LFFPs that, according to Fuji, infringed one or more of its patents. As a result of the proceedings, the ITC issued a general exclusion order under which many of the LFFPs were seized.

In its answer to Fuji’s complaint, Ribi Tech argued that it intended to import only LFFPs “of a kind” that would not infringe Fuji’s patents. In response, Fuji requested the district court to allow it to sample some of the LFFPs that Ribi Tech was trying to import. The district court granted Fuji’s motions for an emergency order and preliminary injunction. In particular, the district court prohibited Ribi Tech from “transferring, removing or otherwise disposing of any LFFPs” from inventory, and enjoined Ribi Tech from “importing, manufacturing, selling, offering for sale or otherwise transferring in any manner” LFFPs that did not originate from shells of LFFPs first sold in the United States, or which were made according to a specific identified process.

The only issue on appeal was whether the district court had jurisdiction to enjoin any importation that is already the subject of the exclusion order issued by the ITC, and the Federal Circuit affirmed the district court’s decision, stating that the ITC’s “final decision to issue a general exclusion order does not alter the district court’s authority to proceed with remedies that may affect the same goods.” Slip op. at 8.

The Federal Circuit began by noting that 28 U.S.C. § 1388(a) and 35 U.S.C. § 283 work together to supply the district court with the jurisdiction and the authority to issue an injunction. In fact, Ribi Tech did not contest that a patentee can bring actions in federal district court and the ITC, nor did Ribi Tech contest the authority of the district court to prohibit importation of infringing goods after the ITC has refused to issue a general exclusion order. Rather, Ribi Tech argued that a distinction should be made in situations, such as in this case, where the ITC has issued a general exclusion order, thereby allowing an importer to challenge the seizure of its goods. Under such circumstances, Ribi Tech argued, the district court should be prevented from considering importation issues involving those same goods.

The Federal Circuit, however, explained that nothing in the relevant statutes “even vaguely suggests” that the statutory scheme for protesting a seizure divests a district court of jurisdiction to consider an injunction on goods subject to a general exclusion order. Id. at 5-6. For example, while 28 U.S.C. § 1581(a) gives the ITC exclusive jurisdiction over denials of protests arising under 19 U.S.C. § 1515, the section is silent as to a district court’s jurisdiction over patent infringement claims or injunctions. Likewise, as noted by the Court, although § 1515 states that a district court does not have the jurisdiction to consider a seizure protest, the statute does not mention, let alone limit, a district court’s jurisdiction to enjoin importation.

Moreover, the Federal Circuit distinguished this case from Federal Circuit precedent because Fuji’s complaint in the district court was not an action “commenced to contest the denial of a protest,” thereby granting the ITC exclusive jurisdiction under § 1581(a). The Court noted that while such a result may open the door to duplicative litigation by the parties, such a dilemma is simply not relevant to the jurisdictional inquiry raised by the litigants. Furthermore, “[t]he parties and remedies associated with a general exclusion order differ markedly from a civil action seeking a preliminary injunction to remedy patent infringement.” Id. at 6.

Accordingly, because the district court possessed jurisdiction under 28 U.S.C. § 1338(a), and because Ribi Tech has raised only a jurisdictional challenge, the Federal Circuit affirmed the district court’s decision.