Fed. Circ. Ruling Shows Even Small Cos. Can Win at ITC

Paul Ainsworth, director in Sterne Kessler’s Trial & Appellate Practice Group, spoke to Law360 to discuss the Federal Circuit’s recent decision in Wuhan Healthgen Biotechnology Corp. v. U.S. International Trade Commission, which affirmed that companies can leverage the U.S. International Trade Commission (ITC) to block infringing imports by showing that 100% of the manufacturing occurred in the United States, even with modest domestic investments.

In this case, the court upheld the ITC’s finding that Ventria Bioscience Inc. met the domestic industry requirement by demonstrating significant investment in the cell culture product covered by its patent.

Paul comments that no one wants to bring an ITC case only to lose on the domestic industry requirement, so he has heard concerns from clients about whether the commission will conclude they have a big enough U.S. industry to pass muster.

“This case provides a clear, simple example that it’s a burden on the patent owner, but it’s not this tremendous burden to prove, or a big threshold you have to pass,” he said.

Paul continued “For infringement defendants seeking to prove that the patent owner has not met the requirement, the decision cuts off arguments that a low amount of investment alone is too small. Litigants might now focus on showing that some of the investments are not purely domestic, for instance if key ingredients in the patented product are made abroad.”

“That’s what I’d be trying to do, create a story that it’s actually not all U.S.-based,” he added. “With the global supply chain, you can imagine how, in some cases, that may play out.”