§ 337 Investigations

1. § 337 Investigations • Shortcomings of district court litigation in dealing with infringing imports • Nature of § 337 investigations • Popularity of § 337 cases • Reasons to consider ITC • Stages of § 337 action • Timeline of § 337 investigation • In the Matter of Certain Recombinant Erythropoietin

2. District Court Suits & Infringing Imports • Scenario • You hold patent on tequila formulation • Your patent covers Patron Anejo • Importer/Distributor in AZ • Distributor just began selling in AZ • Could bring suit in district court for damages and injunction • What if you wanted to prevent Patron destined for AZ from entering country? • What if Patron uses different distributors for other states?

3. Nature of § 337 Investigation • What is the U.S. ITC? • Section 337 investigations • What does § 337 proscribe? • § 337(a)(1)(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 (ii) are made . . . by means of a process covered by the claims of a valid and enforceable United States patent.”

4. Nature of § 337 Investigation cont’d • § 337 elements of proof • Existence of domestic industry • Importation of products by a respondent • Unfair act • Patent infringement • Remedy to which entitled if prevail

5. Nature of § 337 Investigation cont’d • Domestic industry requirements • Nexus between activities and patent at issue • Domestic industry exists in U.S. if there is either: • Significant investment in plant and equipment • Significant employment of labor or capital • Substantial investment in exploitation of patent • Manufacturing in U.S. not required • Unfair act • Laws pertaining to patent infringement apply

6. Nature of § 337 Investigation cont’d • Relief to which entitled if prevail • No monetary damages • Exclusion orders • Directed to U.S. Customs • General exclusion order • Limited exclusion order • Cease & desist orders

7. § 337 Cases Are Steadily Increasing • 18 § 337 complaints filed in 2003 • 40 complaints in 2007 • 58 complaints in 2010

8. Why Patentee Might Consider ITC vs. District Court • Expedited process • Opportunity for complainant to prepare case • One-stop relief available • No counterclaims • In rem jurisdiction • Bias of agency • Experienced ALJ’s

9. Stages of § 337 Action • Complaint filed with ITC • Investigation • ALJ phase • ITC phase • Presidential phase

10. Timetable of ITC § 337 Investigation • Non-TEO timetable • TEO timetable

11. In the Matter of Certain Recombinant Erythropoietin • Amgen • First to successfully clone EPO gene • Filed patent application that issued as ‘008 patent • Claim 2: A purified and isolated DNA sequence . . . encoding human erythropoietin • Claim 5: A . . . DNA vector including a DNA sequence according to . . . Claim 2 . . . • Claim 23: A . . . [host] cells transformed . . . in a manner allowing the host cells to express [erythropoietin] • Amgen used host cells to produce rEPO • Chugai • Chugai Japan obtained host cells containing EPO gene • In Japan, Chugai used DNA sequence, DNA vector, and host cells to produce rEPO • Chugai imported rEPO into the U.S.

12. rEPO cont’d • Amgen filed complaint in ITC seeking exclusion • Amgen claimed articles used to make EPO, but none was imported • Use of patented article abroad does not constitute infringement • However, if a patented process is practiced abroad to produce a product, and that product is imported, then patent infringement • If Amgen could convince ITC that its claims were process claims practiced abroad to produce rEPO, then it could argue that importation of rEPO was violation of § 337

13. rEPO cont’d • Amgen contended that ‘008 patent claims were “hybrid” process claims • It said they covered both articles and intracellular processes • Based on claim construction, ALJ and ITC ruled that ‘008 patent does not claim a process • As filed, application contained process claims • Examiner rejected claims as obvious • Amgen then cancelled its process claims and rewrite its article claims • It stated that none of the rewritten claims corresponded to the cancelled process claims and, therefore, the issue of whether the process claims were patentable was no longer an issue • ITC relied on cases that patentee is precluded from obtaining a claim construction that would resurrect subject matter surrendered during prosecution • Because Amgen surrendered its process claims during prosecution, the surviving claims should not be construed in a way that would resurrect those claims