Amarin Case Demonstrates Limits of ITC Jurisdiction

This article by counsel Matthew Rizzolo was published by Law360 on November 22, 2017.

In what represents a departure from typical U.S. International Trade Commission (ITC) practice, the ITC on Oct. 27, 2017, declined to institute a Section 337 investigation based on a complaint brought by Amarin Pharma Inc. and Amarin Pharmaceuticals Ireland Ltd. (“Amarin”). The commission’s non-institution decision (as well as a brief concurring memorandum from Commissioner Meredith Broadbent) provides incremental insight into the question of the ITC’s jurisdiction and deference to sister government agencies.

Background

Section 337 broadly authorizes the ITC to investigate all forms of “[u]nfair methods of competition and unfair acts in the importation of articles.” This breadth of authority makes the ITC a potentially attractive forum for companies seeking creative solutions to defend their rights and gain a competitive edge in global business disputes, especially given that the ITC’s authority to investigate such claims “is broad enough to prevent every type and form of unfair practice ... .”¹ For example, based on that broad authority, the ITC has instituted investigations in recent years under Section 337(a)(1)(A) based in whole or in part on allegations of trade secret misappropriation, common law trademark and trade dress infringement, breach of contract, tortious interference with contractual relations, false advertising under the Lanham Act and violation of a state law deceptive trade practice prohibitions.

Amarin filed its complaint with the ITC on Aug. 30, alleging that certain synthetically produced omega-3 products — specifically, synthetically produced eicosapentaenoic acid (EPA) omega-3 products in ethyl ester or reesterified triglyceride form — were unlawfully labeled and marketed as “dietary supplements” in violation of Section 337, the Lanham Act and the Food, Drug and Cosmetic Act (FDCA).² Amarin alleged that, based on the standards and definitions in the FDCA, these products are not “dietary supplements,” but instead are actually unapproved “new drugs” that require approval from the U.S. Food and Drug Administration (FDA) (as well as pre-approval testing) and cannot lawfully be marketed and sold as dietary supplements.³ Amarin named a variety of domestic and foreign entities as proposed respondents, and requested that the ITC institute a Section 337 investigation and issue a general exclusion order barring the importation into the United States by any entity of synthetically produced omega-3 products.⁴

Amarin’s complaint drew significant interest from the proposed respondents and other members of the public, as well as from industry press. In addition to proposed respondents DSM Nutritional Products, Pharmavite and Nordic Naturals, several other entities initially submitted comments to the ITC requesting that the ITC decline to institute the investigation on public interest grounds, including the Council for Responsible Nutrition, the Global Organization for EPA and DHA Omega, the Consumer Healthcare Products Association and Hale Oswick Family and Friends.

Amarin and several of the proposed respondents engaged in an unusual exchange of pre-institution briefing on the issue of whether the ITC appropriately had jurisdiction over Amarin’s claims — with the proposed respondents arguing that the FDA, not the ITC, should be the agency to determine the propriety of complained-of conduct. Amarin relied in part on the Supreme Court’s decision in POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014), which held that the FDCA does not preclude a private party from bringing a Lanham Act claim challenging a misleading food label that is regulated under the FDCA. Although that case dealt with food labels, rather than purported “new drugs,” Amarin argued that the analysis should be the same. In their response, the proposed respondents argued in part that Amarin’s claims were improper because the FDA is exclusively tasked with administration of the FDCA and has not made a determination as to whether the accused products are properly labeled as drugs or dietary supplements.

More specifically, the proposed respondents argued that resolving the fundamental issue in Amarin’s case — whether the accused products are in fact “dietary supplements” or “new drugs” — would, require the ITC to interpret and apply the FDCA, alleging this is solely within the FDA’s jurisdiction. Many of the proposed respondents and third parties also relied on the ITC’s 2012 decision not to institute a complaint brought by K-V Pharmaceutical Company in Certain Hydroxyprogesterone Caproate and Products Containing the Same, Docket No. 2919, where the ITC declined to investigate claims brought under the FDCA.⁵

On Oct. 6, the FDA itself weighed in, filing its own request asking the ITC not to institute an investigation into Amarin’s complaint. The FDA claimed that Amarin was attempting an unlawful private FDCA enforcement action, and that the FDCA precludes claims that would require any entity other than the FDA to interpret provisions of the FDCA. The FDA echoed the proposed respondent's arguments, stating that it had not yet made a decision on whether the synthetically produced omega-3 products were “dietary supplements” or “new drugs” under the FDCA, and that it was in the process of drafting guidance for the industry. As such, the FDA requested that the ITC decline to institute under principles of interagency comity.

Given the voluminous submissions from the parties and the public and the unique issues posed by Amarin’s complaint, the ITC twice delayed its decision on whether to institute the complaint, deliberating for nearly an additional month before finally issuing its decision on Oct. 27.

The ITC’s Non-Institution Decision

The ITC’s governing statute, 19 U.S.C. § 1337, provides in part that the ITC “shall investigate any alleged violation of this section on complaint under oath.” 19 U.S.C.§ 1337(b). Nonetheless, the ITC here found that “Amarin’s complaint does not allege an unfair method of competition or an unfair act” as required by the statute and the commission’s rules. Specifically, the ITC determined that the Lanham Act allegations in this case were precluded by the FDCA, and noted that the FDA is the entity charged with the administration of the FDCA. As such, the ITC declined to institute an investigation and dismissed the complaint.

One commissioner, Commissioner Meredith Broadbent, issued a brief memorandum concurring with the ITC’s non-institution decision, agreeing that Amarin’s complaint failed to properly allege an unfair method of competition or an unfair act under Section 337. However, she left the door open for future complaints, stating that she did not reach the issue of whether properly pleaded claims based on the FDCA may be cognizable under Section 337. (It is worth noting Commissioner Broadbent, along with then-Commissioner Dean Pinkert, issued a similar concurring memorandum in Hydroxyprogesterone Caproate in 2012.)

What’s Next for Amarin?

In the short term, Amarin could potentially petition the commission to reconsider its dismissal of the complaint. Furthermore, given that the ITC’s governing statute directs that the ITC “shall investigate” alleged violations of Section 337, it’s possible that Amarin might seek to challenge that ITC’s non-institution as an arbitrary and capricious act in violation of the Administrative Procedures Act (APA) — either in an appeal to the Federal Circuit or in a collateral district court action. (In fact, Amarin hinted in some of its briefing that it would consider a denial of institution to be a potential APA violation.) While on-point precedent is sparse, Amarin likely cannot directly appeal the commission’s non-institution decision, because Section 337 provides that only a final determination of the commission may be appealed. In the past, the Federal Circuit has exercised jurisdiction over an appeal from a decision by the ITC where that decision had equivalent effect of a final determination on the merits.⁶ Yet it’s possible Amarin may seek a writ of mandamus from the Federal Circuit, arguing that the commission’s decision not to institute the investigation was arbitrary and capricious in violation of the APA,⁷ especially given Section 337’s mandate that the commission shall investigate any properly pled Section 337 complaints.

In the non-ITC context, Amarin could also file a citizen petition pursuant to 21 C.F.R. § 10.30, and request that the FDA issue a new regulation classifying the accused omega-3 products as “new drugs.” Doing so would allow Amarin to present all of its arguments that it made before the commission to the FDA instead. (The FDA must respond to (but not necessarily issue a final ruling on) all citizen petitions within 180 days.)⁸

What’s Next for Others?

In the long term, and for those who have been watching this case with interest, the ITC’s decision provides incremental guidance regarding the types of nonpatent claims that may (or may not) give rise to a Section 337 investigation, especially in the FDCA context. The ITC’s position here and in Hydroxyprogesterone Caproate seems to be one of deference to the FDA on issues that are unique to the FDA’s enforcement authority — i.e., where a theory of a violation of Section 337 would require the ITC to interpret the FDCA in an area where the FDA has not yet provided guidance, the ITC appears likely to decline to institute. However, where the FDA has already made a determination and the ITC can simply apply that determination to resolve Lanham Act claims without needing to resolve questions that require the FDA’s (or another agency’s) special expertise, the ITC may be more receptive to institution.

Indeed, the ITC previously instituted an investigation in Certain Potassium Chloride Powder Products, Inv. No. 337-TA-1013 (Potassium Chloride) over similar objections to those raised in Amarin’s case. In Potassium Chloride, the complainants alleged that the respondents falsely and deceptively marketed their drugs as FDA-approved in violation of the Lanham Act and the FDCA, when in fact the complainants had the only FDA-approved drug of that type on the market.⁹ In response, the Potassium Chloride respondents argued that the ITC should not institute an investigation because doing so would “usurp the exclusive regulatory power of FDA” and “encroach on the FDA’s authority under the FDCA.”¹⁰ Nonetheless, the ITC determined that institution was proper in that case. Notably, unlike the accused omega-3 products in Amarin’s case, the accused drugs in Potassium Chloride were unquestionably drugs under the FDCA and were not approved by the FDA, and so the ITC did not need to resolve any questions that required the FDA’s expertise before reaching the merits of the Lanham Act arguments.

Similarly, in Certain Light Emitting Diode Products and Components Thereof, Inv. No. 337-TA-947, after the respondents were accused of violating Section 337 and the Lanham Act by falsely marking inferior LED lightbulbs with the ENERGY STAR® label, the respondents argued that the ITC did not have jurisdiction to resolve their alleged Lanham Act violations because another agency, this time the EPA, had exclusive regulatory authority over the use of that label. The administrative law judge (ALJ) in that case rejected that argument, stating “[the ITC] has frequently exercised its authority with respect to Lanham Act violations based on the failure to meet and follow requirements set by other federal agencies.”¹¹ Therefore, as the ALJ in Certain Light Emitting Diode Products further explained, the ITC has jurisdiction over Lanham Acts claims where those “claims do not require the [ITC] ‘to interpret complex regulations, resolve technical issues or engage in policy judgments that require the expertise of [another agency].’”¹²

It still remains to be seen whether it is possible to bring a Section 337 claim based at least in part on the FDCA. However, at least one commissioner may be open to the assertion of such claims, as long as they are properly pled. Going forward, those seeking to invoke the ITC’s broad unfairness authority will likely take care to bring only those Lanham Act claims that would not require the ITC to “step on the FDCA’s toes.”¹³

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¹ Certain Air Impact Wrenches Inv. No. 337-TA-311, 1991 WL 788551, at *7 (May 6, 1991) (quoting Senate Finance Committee Report, S. Rep. No. 67-595, at 3 (1922)).

² Complaint at ¶¶ 1, 58–60, Certain Synthetically Produced, Predominantly EPA Omega-3 Prods.in Ethyl Ester or Re-esterified Triglyceride Form, Docket No. 3247 (Aug. 30, 2017).

³ Id. at ¶¶ 84–101, 106–113.

⁴ Id. at 103–04, ¶¶ 24–31.

⁵ See Certain Hydroxyprogesterone Caproate and Prods. Containing the Same, Docket No. 2919, Order (Dec. 21, 2012).

⁶ See Amgen Inc. v. ITC, 902 F.2d 1532, 1535 (Fed. Cir. 1990); see also Import Motors Ltd. v. ITC, 530 F.2d 940, 944 (C.C.P.A.1976) (exercising jurisdiction over an appeal from the ITC where the commission’s decision had the “effect upon appellants [that] is the equivalent of a final determination.”).

⁷ See, e.g., Syntex Agribusiness Inc. v. ITC, 659 F.2d 1038, 1039, 1041 (C.C.P.A. 1981) (denying petition for writ of mandamus to compel ITC to institute an investigation).

⁸ See 21 C.F.R. § 10.30(e)(2).

⁹ See Complaint at ¶¶ 24–56, Certain Potassium Chloride Powder Prods., Inv. No. 337-TA-1013 (June 15, 2016).

¹⁰ See respondents’ Comments Relating to the Public Interest at 2–4, Certain Potassium Chloride Powder Prods., Inv. No. 337-TA-1013 (July 7, 2016).

¹¹ Certain Light Emitting Diode Prods. and Components Thereof, Inv. No. 337-TA-947, Initial Determination at 425 (Sept. 2, 2016).

¹² Id. at 426 (quoting Netgear Inc. v. ASUSTek Comput. Inc., 2013 WL 6512700 (N.D. Cal. Dec. 12, 2013)).

¹³ Hi-Tech Pharms. Inc. v. Hodges Consulting Inc., 230 F. Supp. 3d 1323, 1331 (N.D. Ga. 2016).