The Safe Harbor Statute of 35 U.S.C. § 271(e)(1) Applies to Process Patents in Actions Under Section 337 (ITC)

Amgen, Inc. v. United States International Trade Commission, No. 2007-1014 (Fed. Cir. Apr. 30, 2009)

Holding:

“[T]he safe harbor statute applies to process patents in actions under Section 337 when the imported product is used for the exempt purposes of § 271(e)(1).”

Comments:

Is this opinion inconsistent with Kinik v. United States International Trade Commission, 362 F.3d 1359 (Fed. Cir. 2004)? In Kinik, the Court held that § 271(g) provided a new right and remedy in the district court, but held that the Tariff Act remedy of exclusion based on practice of a patented process was unchanged, and that the exceptions set forth in § 271(g) did not apply in Section 337 cases.

The Federal Circuit did not overturn Kinik, but if the distinction merely lies on the Court’s interpretation of legislative history behind § 271(g) versus § 271(e), it does not seem right.

In my opinion, Kinik should be overturned, because it is inconsistent with GATT. I have copied my earlier analysis on Kinik from June 2004 below.

+++

The Federal Circuit held that defenses under § 271(g) do not apply to the ITC proceedings under § 1337(a)(1)(B)(ii). Id. at 1362-63. Although the text of the statutes, the legislative history, and precedent clearly support this interpretation, § 271(g), added in 1988, may have been outdated by the General Agreement on Tariffs and Trade (GATT)’s 1994 national treatment rule. This rule requires that ITC procedures in § 1337 investigations treat imported goods no less favorably than the procedures in district courts. GATT, art. III: 4, T.I.A.S. No. 1700, 55 U.N.T.S. 187.

Congress amended § 1337 in 1994 to “ensure that U.S. procedures for dealing with alleged infringements by imported products comport with GATT 1994 ‘national treatment’ rules.” Uruguay Round Agreements Act, Pub. L. 103-465, 108 Stat. 4809, §§ 321(a)(5)(A) (codified as amended at 19 U.S.C. § 1337 (1994)); H.R. Rep. No. 103-826, pt. 1, at 142 (1994). This amendment was preceded by a 1989 GATT Panel Report finding that § 1337 was inconsistent with the national treatment rule. United States - Section 337 of the Tariff Act of 1930, GATT Doc. L/6435 - 35S/345 (Nov. 7, 1989) (“1989 GATT Panel Report”).

Because courts had never decided the applicability of defenses under § 271(g) to ITC actions, the 1989 GATT Panel Report did not address defenses under § 271(g). The Federal Circuit’s interpretation in Kinik prevents makers of imported goods in § 1337 ITC actions from raising defenses available in district court infringement proceedings. Therefore, this rule appears inconsistent with the GATT’s national treatment rule. It remains to be seen, however, whether other countries will raise this inconsistency through a GATT panel.

+++