U.S. Spotlight: The emerging role of the ITC in pharmaceutical disputes

Provided by Josh Pond & Matthew Meyer
Kilpatrick Townsend Washington D.C. & Silicon Valley

International Trade Commission

The U.S. International Trade Commission (ITC) acts as an independent, quasi-judicial government agency with the power to adjudicate claims of unfair importation, including those involving imports that allegedly infringe intellectual property rights.  As an expedited alternative to U.S. federal litigation, the ITC has become an increasingly popular forum for blocking imports that infringe patents, trademarks, and trade secrets, or that otherwise constitute unfair trade.  Complaints to the ITC and resulting investigations have surged—from 36 in 2015, to 60 in 2017.  Medical imports—particularly pharmaceuticals—have long been at the periphery of the ITC, but seem ripe for a similar surge.

By way of background, an ITC investigation operates like district court litigation, using rules of procedure, evidence, discovery, etc. similar to those used in federal courts. Also, like U.S. district court judges, ITC administrative law judges (ALJs) oversee litigation and conduct bench trials called evidentiary hearings. ITC proceedings are significantly faster than district court litigation, with a trial typically scheduled within 10 months of a complaint and a final disposition issued within 17 months (as compared to 2-3 years in district court). ITC investigations often involve the ITC’s Office of Unfair Import Investigations as a neutral third party to look out for the public interest in fair international competition. Unlike district court litigants, ITC complainants must meet a threshold requirement by showing, for each IP right asserted, that a “domestic industry” exists, in addition to proving infringement of a valid IP right or other form of unfair competition. Also in contrast to district courts, the ITC cannot award monetary damages — instead, remedies are limited to exclusion orders or injunctions against the importation of infringing goods.

Once the ALJ makes his or her ruling, the full commission may review all or part of the decision, either reaching a different conclusion or accepting the ALJ’s decision. At that time, either party may appeal the ITC’s decision to the U.S. Federal Circuit like other district court judgments.

Standard ITC Investigation (months)

 

Relevance for pharmaceutical disputes

In the U.S., the battle between branded pharmaceutical companies and companies seeking to market generic equivalents has chiefly been addressed through the framework of the Hatch-Waxman Act and the process for abbreviated new drug application (ANDA) litigation in U.S. district courts.  The ITC, however, can afford relief to branded pharmaceutical companies seeking to extend their term of market exclusivity further by means of pharmaceutical process patents (which fall outside of the ANDA framework) as well as to branded pharmaceutical companies that did not prevail in the district court ANDA litigation.  Moreover, the new Biologics Price Competition and Innovation Act (BPCIA) operates differently from the Hatch-Waxman Act in the U.S., such that the ITC may be more attractive for disputes over biosimilars.

Further, as shown by the ITC’s recent April 18, 2018 notice instituting an investigation in Certain Clidinium Bromide & Products Containing Same, Inv. No. 337-TA-1109, the ITC’s authority to provide relief for unfair competition outside of the patent-context may provide additional avenues of relief for pharmaceutical companies selling in the U.S. In that investigation, the ITC will be exploring the novel question of whether sale of the components of an FDA-approved drug by a company that lacks FDA-approval could be an act of unfair competition, which can be remedied by the ITC.

The ITC is surging as an intellectual property enforcement forum in the U.S.—we predict that surge will soon extend to pharmaceuticals.

Kilpatrick Townsend at the ITC

Ranked among the top five U.S. national firms practicing before the ITC, Kilpatrick Townsend’s ITC Team comes uniquely qualified to handle both ITC offenses and defenses, having successfully won or settled more than 32 ITC investigations, with 12 going to trial — in 2017 alone, we advocated for three complainants and nine respondents across nine investigations before the commission, and were shortlisted as ITC Firm of the Year by Managing IP.

Our deep technical knowledge and patent litigation experience allow us to quickly understand complex technology and legal issues to provide effective advice and representation to clients lodging or facing ITC investigations. We serve as counsel for leading domestic and international companies, offering intimate familiarity with international business practices impacted by the ITC’s far-reaching, business-critical investigations. To give our clients an extra advantage, our attorneys stay abreast of rapidly-evolving trends in the ITC, including non-practicing entities, standard-essential patents, domestic industry, and the ITC’s independent stance on patent validity challenges to the USPTO’s Patent Trial & Appeal Board.  Further information on our practice before the Commission can be found on our firm practice page here.

If you would like to discuss any of the issues raised in this article with Kilpatrick Townsend please contact Charlotte Tillett, Sarah Murray or your usual S&B contact who will be happy to put you in touch.

Search our site