IP Law Alert : Intellectual Property Lawyers & Attorneys : Gibbons Law Firm : Copyrights, Patent Infringement, Unfair Competition

Last week in GPX Intl. Tire Corp. v. U.S., the Federal Circuit decided whether both antidumping and countervailing duties may be imposed on a non-market economy (“NME”) country like China. The Federal Circuit affirmed the International Court of Trade’s (“ITC”) ruling that countervailing duty law does not apply to an NME country, but for different reasons than the ITC. Earlier, the ITC had reasoned that the U.S. Department of Commerce’s (“Commerce”) 2007 interpretation of the law was “unreasonable” because of the high probability of “double counting.” Alternatively, the Federal Circuit came to its decision by looking at the statute’s Congressional intent. Specifically, when Congress amended and reenacted countervailing duty law in 1988 and 1994, the Federal Circuit concluded that government payments could not be characterized as “subsidies” in an NME context. Therefore, countervailing duty law does not apply to NME countries.

In his opinion for the court, Justice Dyk first provided background on the two types of duties arising from imports: antidumping and countervailing duties, stemming from the Tariff Act of 1930. Pursuant to 19 U.S.C. §§ 1673 and 1671(a), antidumping duties are placed on goods that are sold in the U.S. for less than fair value and countervailing duties are placed on goods that receive “a countervailable subsidy.” The subsidy in this case arises from a “domestic subsidy,” where the subsidy benefits both domestic and exported goods. Conversely, an “export subsidy” benefits only exports, and both antidumping and countervailing duties may be forced by market economy countries.

Additionally, the Federal Circuit also provided a history on countervailing duties. The issue of whether Commerce should impose countervailing duties on goods from NME countries was first considered in 1983 and in 1984 when Commerce concluded that countervailing duties should not be imposed on NMEs. After U.S. manufacturing companies appealed to the ITC and were successful, Commerce then appealed to the Federal Circuit. The Federal Circuit then reinstated Commerce’s decision in Georgetown Steel Corp. v. U.S. that countervailing duties should not be imposed on NMEs.

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Last week in Warner Chilcott Labs Ireland Ltd. v. Mylan Pharms., the Federal Circuit vacated a grant of preliminary injunction in a Hatch-Waxman case by the District Court of New Jersey. The Federal Circuit acted after the lower court granted a preliminary injunction without either holding an evidentiary hearing or making any findings as to the defendants’ invalidity defense.

The case arises out of Mylan’s filing of an ANDA to market a generic version of Doryx. One month before the 30-month stay expired and Mylan having received tentative approval from the FDA, Warner Chilcott moved for a preliminary injunction against a possible at risk-launch by Mylan. Warner Chilcott’s infringement case turned on whether Mylan’s ANDA product had a “stabilizing coat” as required under the patent in suit. The parties submitted briefs and expert witness declarations, and the court heard oral arguments from both parties on the traditional four factors for injunctive relief: irreparable harm; likelihood of success on the merits; balance of hardships; and the public interest. However, the court did not hold a live evidentiary hearing to hear the testimony of the battling experts, citing scheduling demands and a pressing criminal trial. Instead, the court deferred addressing those issues until the upcoming bench trial. In addition, the court also declined to make any factual determinations as to Mylan’s invalidity challenge. Ultimately, the lower court acknowledged that there were questions of facts to be resolved on the issue of a “stabilizing coat” and it enjoined Mylan from marketing its ANDA product until after trial on the merits.

The Federal Circuit vacated and remanded the lower court’s decision. Writing for the court, Justice O’Malley held that it was an abuse of discretion under established Third Circuit law to grant a preliminary injunction without holding an evidentiary hearing when there were unresolved issues of fact in dispute. In addition, the Federal Circuit also faulted the lower court for making only passing reference to Mylan’s invalidity challenge, and its likelihood of success, without providing an adequate factual record for appellate review.

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Gibbons published an IP Law Alert this summer describing the forthcoming Intellectual Property Exchange International (“IPXI”). Along with providing background information about how the IPXI will monetize patents, and the process for listing an IP asset on the IPXI, this post discussed the growing pains associated with starting a financial exchange pegged to IP.

Since that posting, the IPXI has recently announced that it remains on track to begin operations in 2012 and has signed agreements with five entities: Philips, Com-Pac International, Rutgers University, Northwestern University and the University of Utah, to sponsor the Unit License Rights (ULRs) that are offered through the exchange. Additionally, IPXI has secured $10 million in additional funding from investors, including Philips and the Chicago Board Options Exchange. The IPXI was founded in 2009, but attracting licensees has been a challenge. Given the IPXI’s recent momentum, it will be interesting to see whether additional entities commit to the IPXI before its debut, or wait to commit until after the IPXI becomes operational.

Gibbons will continue to stay at the forefront of this, and other IP developments. For additional information about the IPXI, please go to the IPXI website at www.ipxi.com.

Jillian A. Centanni is an Apprentice in the Gibbons Intellectual Property Department.

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New Jersey, along with New York, Massachusetts and Texas, are the only states that have not adopted some form of the Uniform Trade Secrets Act. Not for much longer.

Last week, the New Jersey Trade Secrets Act, A-921/S-2456 passed unanimously in the New Jersey Assembly, and is on its way to the Governor’s desk. Governor Christie will have 45 days to sign the measure into law. Once enacted, the law will be effective immediately, but will not apply retroactively.

To date, New Jersey has applied the common law to trade secrets. The pending law reflects much of this common law tradition. Basically, the Act defines a trade secret as information, regardless of form, that derives independent economic value from not being generally known to others who can gain economic value from its disclosure; and, is the subject of reasonable efforts to maintain its secrecy.

The Act protects a trade secret holder from misappropriation, which is defined as a trade secret acquired by improper means or improperly disclosed. Among the remedies available for misappropriation are: damages, both actual and for unjust enrichment; as well as a reasonable royalty for unauthorized use or disclosure; punitive damages; injunctive relief for actual or threatened misappropriation; and the possibility of attorney’s fees. Attorney’s fees are also available as a remedy for misappropriation claims made in bad faith, and with respect to a motion to terminate an existing injunction that is made or resisted in bad faith. The Act shortens the six-year statute of limitations previously available for bringing an action (under N.J.S.A. §2A:14-1) to a three-year term beginning with the time of actual discovery of a misappropriation or the time at which discovery would have occurred with reasonable diligence.

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Oral argument was recently heard before the Federal Circuit in the appeal of AstraZeneca Pharms. LP. v. Aurobindo Pharma Ltd. AstraZeneca, along with IPR Pharmaceuticals, Inc., and The Brigham and Women’s Hospital, Inc., (“Plaintiffs) sued ten generic drug companies alleging infringement of US Patent Nos. 6,858,618 (“the ‘618 patent”) and 7,030,152 (“the ‘152 patent”) under the Hatch-Waxman Act. These patents claim methods of treatment using rosuvastatin calcium, which Plaintiffs market as Crestor®.

The ten generic drug companies had filed abbreviated new drug applications (“ANDA”) with the U.S. FDA seeking to market generic versions of the drug to treat nonfamilial hypercholesterolemia, homozygous familial hypercholesterolemia or hypertriglyceridemia, uses which were not covered by the two method of use patents, but were FDA approved uses.

Plaintiffs alleged that Defendants’ generic tablets, if approved by the FDA, will be prescribed and administered to human patients according to the Crestor® label to treat heterozygous familial hypercholesterolemia (“HeFH”) and for the primary prevention of cardiovascular disease, which uses will constitute direct infringement of the ‘618 and ‘152 patents, respectively. As noted, the ANDA filed by the Defendants did not embody a use claimed in the patents. Plaintiffs alleged the claimed uses will occur nonetheless because the generic label will mirror the Crestor® label, and will be uses that Defendants know or should know will occur. Therefore, Defendants will actively induce, encourage, aid and abet this prescription and administration, with knowledge and specific intent that these uses infringe Plaintiffs’ rights under the ‘618 and ‘152 patents.

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Jillian A. Centanni has joined Gibbons as an Apprentice in the firm's Intellectual Property Department. Ms. Centanni is the second participant in the firm's Apprenticeship Program, which Gibbons launched in 2010 to help maximize the value of its legal and client services, while also providing a solid training ground for new attorneys. John J. Cahill, Jr., the firm's first Apprentice, was recently promoted to an Associate position in the Intellectual Property Department after a one-year apprenticeship.

Ms. Centanni has a diverse background in engineering and business, having earned both a BSE in chemical engineering and an MBA with concentrations in management science and financial markets. She had previously been a process engineering intern for Lockwood Greene Consultants & Engineers (CH2M Hill). She also recently worked as a senior valuation analyst for a boutique IP valuation firm, where she valued portfolios of patents using Excel modeling. Ms. Centanni's business experience includes a financial analyst position with Scouler & Company in Chicago, where she analyzed the performance of companies with assets exceeding $50 million and identified corporate restructuring opportunities.

Ms. Centanni recently completed a legal externship with the Honorable Robert Kugler of the U.S. District Court in Camden. She had previously been a legal intern for the Honorable Karen Suter, Presiding Civil Court Judge for the Burlington Vicinage. She received her JD from Rutgers University School of Law - Camden and is a member of the American Intellectual Property Association, the American Institute of Chemical Engineers, and the Society of Women Engineers. She is registered to practice before the United States Patent & Trademark Office and is admitted to practice in New Jersey.

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