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The Law At Odds: Looking for Harmony Between 337 and the '271(g) Exception

By Christopher Demas, Michael Garvey and Richard Sharpe

Development Corp. owns a patent covering a process for making a chemical 'X.' Imports Inc. uses the process to make chemical X in Europe. Chemical X is then materially altered as it is converted to chemical 'Z'; then it is shipped to the United States. Can Development Corp. block importation of chemical Z? The answer might depend on what forum Development Corp. chooses.

According to U.S. patent law, the answer should be 'yes.' 35 U.S.C. '271(g) specifically allows importation of a product made by a patented process in a foreign country as long as the product is materially changed prior to entry in the United States. However, in Kinik Co. v. ITC, 362 F.3d 1359 (Fed. Cir. 2004), the Federal Circuit upheld an International Trade Commission ('ITC') ruling that the defenses established in '271(g) are not available in so-called 337 actions brought before the ITC under 19 U.S.C. '1337. Thus, even though it is permissible under U.S. patent law to import a product made employing a U.S. patented process somewhere upstream, the possibility remains that the ITC could enjoin the importation of that product anyway pursuant to its own finding of infringement under the administrative laws.

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