Addressing a decision by the US International Trade Commission finding a violation of Section 337, the US Court of Appeals for the Federal Circuit agreed with the Commission on a slew of issues, including its determination that soliciting comments from a sister agency regarding the products at issue was sufficient consultation to satisfy the Commission’s statutory obligation to consult. Philip Morris Products S.A. v. Int’l Trade Comm’n, Case No. 22-1227 (Fed. Cir. Mar. 31, 2023) (Prost, Reyna, Stoll, JJ.)

R.J. Reynolds Tobacco Company filed a complaint at the Commission asserting a Section 337 violation by Philip Morris based on alleged infringement of three patents directed to tobacco heating products. During the course of the investigation, the administrative law judge (ALJ) granted summary determination in favor of R.J. Reynolds on the economic prong of the domestic industry requirement as to two of the asserted patents. The ALJ issued his initial determination finding that Philip Morris had violated Section 337 with respect to two of the asserted patents. On review, the Commission affirmed the ALJ’s decision with minor modifications and issued a limited exclusion order and a cease-and-desist order. Philip Morris appealed.

Philip Morris raised numerous issues on appeal. It claimed, for the first time, that the Commission erred in failing to consult with the US Food & Drug Administration (FDA), the US Department of Health & Human Services (HHS) agency exclusively tasked with regulating the tobacco products at issue. The Federal Circuit agreed with the Commission that Philip Morris forfeited this issue because, notwithstanding several rounds of briefing on the public interest factor, it never raised the issue before the ALJ nor the Commission until a motion filed after entry of the remedial orders. The Court also rejected Philips Morris’ consultation argument on the merits, finding that the Commission’s request for comments sent to the FDA was sufficient to meet the statutorily required “consult with[] and seek advice and information from” HHS, even though the FDA failed to respond.

Philip Morris next argued that the Commission abused its discretion by not concluding that the public interest in reduced-risk tobacco products at issue should have barred relief. But the Federal Circuit held that the Commission’s public interest finding had a sufficient basis in the record in the form of expert testimony, scientific articles and FDA documents regarding the products at issue to support its findings regarding the availability of alternative non-tobacco therapies and that the tobacco products were still potentially harmful.

Philip Morris also argued that the Commission erred by finding a domestic industry based on R.J. Reynolds’s competing products that had not yet received FDA approval. The Federal Circuit rejected this argument, explaining that those competing products were being sold at the time of the complaint and that the recently approved law imposing FDA regulation on those products was still in its grace period.

Finally, the Federal Circuit rejected Philip Morris’s various patent-related arguments, finding that the Commission’s determinations were based on substantial evidence.

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