Unfair Competition at the USITC

Amarin Pharma, Inc. v. International Trade Commission (Fed. Cir. 2019)

In 2017, Amarin filed a Section 337 complaint at the ITC — alleging unfair competition against several dietary supplement importers.  Amarin sells a prescription drug containing a particular omega-3 fatty acid known as EPA (eicosapentaenoic acid).

A number of supplement companies started importing synthetic omega-3 fatty acids and Amarin looked for a way to shut them down.  Although Amarin’s formulation is patented, the importers are apparently not close-enough to infringe the patents.  Amarin thus turned to unfair competition law with the following logic: The imported “supplements” are actually drugs that have not been FDA approved and are not properly labelled.  The Food, Drug, and Cosmetic Act (FDCA) requirements served as the foundational basis for the lawsuit.  Here, however, the FDA intervened to argue that the FDCA prohibits private enforcement actions “including unfair trade practice claims that seek to enforce the FDCA.” (quoting opinion).

The ITC then dismissed the case — agreeing that the allegations here are precluded by the FDCA.  POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, 109 (2014) (“Private parties may not bring [FDCA] enforcement suits.” (citing 21 U.S.C. § 337)).

On appeal, the Federal Circuit has affirmed holding:

  1. The appellate court has authority to review refusals to non-institution decisions that are effectively final determinations on the merit.
  2. The ITC has discretion as to whether to institute an investigation. In particular, “the Commission may decline to institute an investigation where a complaint fails to state a cognizable claim under § 337.”
  3. On the merits here, the “complainant fails to state a cognizable claim under § 337” since the claim cannot be fundamentally based upon a yet-unadjudicated  claim of FDCA violation. “Such claims are precluded by the FDCA.”

The majority opinion was authored by Chief Judge Prost and joined by Judge Hughes.  Judge Wallach wrote in dissent —  arguing that the court did not have appellate jurisdiction because the ITC’s refusal to institute an investigation does not count as a “final judgment” as required by the Federal Circuit’s jurisdictional statute. (The court has jurisdiction “to review the final determinations of the [ITC] relating to unfair practices in import trade, made under [§ 1337].” 28 U.S.C. § 1295(a)(6).)

= = = =

In my mind, the case leaves-out a major element — the fact that ITC Section 337 litigation is not a civil action brought by a private party.  Rather, investigations are instituted and conducted by the ITC. This is why, on appeal, the ITC is always a party rather than just the decision-maker.   Thus, at least technically, ITC proceedings are “by and in the name of the United States” as required by the FDCA act.

3 thoughts on “Unfair Competition at the USITC

  1. 2

    The case leaves out a “major element” because that major element is ancillary to the FDA’s argument, the ITC’s subsequent argument, and the Federal Circuit’s rationale.

    From the opinion:
    “In the FDA’s view [*1] the FDCA prohibits private enforcement actions including unfair trade practice claims that seek to enforce the FDCA. J.A. 630. The FDA contended that [*2] the FDCA precludes any claim that would “require[] the Commission to directly apply, enforce, or interpret the FDCA.” J.A. 631. The FDA further contended that [*3] the Commission should decline to institute an investigation based on principles of comity to the FDA. J.A. 629.”

    [*1] Is literally true and does not suggest the ITC is a prohibited private enforcer. Rather, it is a background rationale for the ITC to decline to institute an action at private behest.
    [*2] Is likely true since the FDA has express jurisdiction to enforce the FDCA under the terms of the act and the ITC does not. However, as you’ve identified, there is no express denial of jurisdiction for the ITC, especially in connection with collateral claims that are within the express jurisdiction of the ITC.
    [*3] Is the rationale essentially argued by the ITC and adopted by the federal circuit — since the FDA is the entity charged with enforcing the act, it must interpret the act and make decisions under that interpretation, not some other Article I or independent agency entity. The FDA could decide that these are compliant supplements under the act — and therefore their importation is not an unfair trade practice — or it could decide that these are not — and then ITC might have a basis to act.

    Thus
    “As we explain below, claims based on such allegations are precluded by the FDCA, at least where the FDA has not yet provided guidance as to whether violations of the FDCA have occurred.”

    and

    “We note that this limited holding is consistent with the Commission’s arguments in its briefing, which indicated that Amarin’s claims are precluded at least until the FDA has provided guidance as to whether the products at issue
    are dietary supplements. See, e.g., Commission’s Br. 58 (suggesting that “Amarin is free to file a new complaint once the FDA issues sufficient guidance with respect to the accused products such that the Commission is not required
    to interpret the FDCA in the first instance and Amarin’s claims are otherwise no longer precluded by the FDCA”).

  2. 1

    The dissent’s discussion is much more interesting than the write-up here indicates.

    (leastwise, for those attorneys who recognize that Means really do matter when it comes to matters of law)

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