ITC dismisses Medrad infringement suit

March 14, 2001

The International Trade Commission (ITC) has usually taken the side of U.S. companies complaining about unfair foreign corporate practices, but that tradition may be ending. The ITC has decided in favor of Japanese medical equipment manufacturer Nemoto

The International Trade Commission (ITC) has usually taken the side of U.S. companies complaining about unfair foreign corporate practices, but that tradition may be ending. The ITC has decided in favor of Japanese medical equipment manufacturer Nemoto Kyorindo in a complaint lodged by a U.S. imaging company.

In a February ruling described as “exceptional” by an attorney for Kyorindo, the commission dismissed a patent infringement case filed by Indianola, PA-based Medrad against the Japanese firm and two of its U.S. distributors, Mallinckrodt and Liebel-Flarsheim. In essence, the ITC let stand a decision rendered by an administrative law judge that found Medrad’s U.S. patent for a competing MRI injection system to be invalid.

The decision allows Kyorindo to continue marketing its Optistar system, which Medrad claimed infringes a patent pertaining to its Spectris MRI contrast injector. The ruling followed a successful legal argument that Medrad’s patent was invalid and did not meet the requirements of regulations for obtaining a reissue patent. The decision rendered Medrad’s patent “fatally defective” and allows the three defendant companies to continue marketing and selling the FDA-approved Optistar, attorneys for Kyorindo said.

“The case was decided on summary judgment based on the fact that the law was very much in our favor,” said lead patent litigator Philippe Bennett, an attorney with the law firm Coudert Brothers of New York City. “The facts were uncontested and the law as applied by the judge was pretty clear.”

The battle began last year when Medrad sued the defendants for patent infringement. In October, an ITC administrative law judge issued an initial ruling that granted a summary determination favoring the three defendants. The decision found Medrad’s patent invalid and allowed the firms to continue marketing and selling their injector.

Bennett conceded that the ITC has been viewed as protectionist over the years, often acting in the best interest of U.S. companies involved in patent or trademark violation cases. An infringement ruling can prevent products from being marketed in the country, theoretically costing a firm or industry millions of dollars in potential lost revenue.

“This is very unusual,” Bennett said. “In the context of the summary judgment, it’s exceptional.”

The ITC has been trying to shake off the perception that it protects U.S. industry, but whether this case is a clear-cut example of a policy shift or broadening perspective remains debatable. Bennett noted that the losing complainant is owned by a German company, Schering, and two of the winning defendants, Mallinckrodt and Liebel-Flarsheim, are U.S. companies. He does not believe that the location of codefendants or plaintiffs had any impact on the decision or that the ITC was trying to send a message to foreign companies through the ruling.

“The administrative law judge is not one who sends messages-he has a reputation for being extremely exact and very much to the letter of the law,” Bennett said. “The commissioners are politically appointed, but I don’t think their motives were influenced by who the parties were. I believe they were looking at a 28-page decision that was very clear and very much along the lines of what the law is.”

There may, however, be a message, if the corporate world can read between the lines. It may not be what U.S. companies want to read.

“If there is a message, it is that the commission is looking to be fair and to not be viewed as a pure protectionist agency,” Bennett said.