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A Mixed Bag on New Rules – Juggling Copyright Preclusion and Patent Infringement

Addressing issues of copyright and patent infringement, the US Court of Appeals for the Federal Circuit found that the Federal Insecticide, Fungicide, and Rodenticide Act did not preempt copyright protection and that patent infringement under 35 U.S.C. § 271(g) does not require that the claimed process be performed by a single entity. Syngenta Crop Protection, LLC v. Willowood, LLC, Case Nos.18-1614, -2044 (Fed. Cir., Dec. 18, 2019) (Reyna, J.).

 

Syngenta sued Willowood for patent and copyright infringement. Syngenta accused Willowood of infringing four patents directed to a fungicide compound and its manufacturing process. Syngenta also accused Willowood of copyright infringement for the labels Willowood used on its generic fungicide end-use products. Prior to trial, the district court dismissed the copyright claims, finding that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) precluded copyright protection. After trial, the district court entered judgment in favor of Willowood finding that infringement under “§ 271(g) requires every step of a claimed process to be performed or attributable to a single entity,” and that Syngenta failed to show this was the case. Syngenta appealed.

Starting with the copyright claims, the Federal Circuit held the FIFRA did not preempt copyright protection for Syngenta’s labels. The Court noted there is a presumption that a later-enacted statute does not impliedly repeal, even in part, and earlier one and that an implicit repeal only occurs when two statutes are in irreconcilable conflict. The Court explained that this is a rare occurrence, offering as an example the Copyright Act and the Hatch-Waxman Act, where the Hatch-Waxman Act requires producers of generic drugs to use the same labeling that was approved and used in the sale of the pioneering drug. Therefore, a generic drug producer only has two choices: it either violates the Hatch-Waxman Act or it infringes the copyright on the label of the pioneering drug. Because these differences are irreconcilable, the Hatch-Waxman Act prevails and there is no copyright protection against a generic drug producer in these circumstances.

The Court found that this was not a case where the FIFRA and Copyright Act are in irreconcilable conflict. The FIFRA requires the generic, as compared to the registered product, be (1) identical or substantially similar in composition and labeling, or (2) differ in composition and labeling only in ways that do not significantly increase the risk of unreasonable adverse effects on the environment. The Court found it significant that FIFRA did not require the label to be identical. It noted that to the extent a generic had to follow the same format or included the same information as the label for the registered product, such use would likely be permissible under the merger doctrine or fair use exception of the Copyright Act. The Court remanded the issue, instructing the district court to engage in the merits of a plaintiff’s copyright claim to determine whether the similarities that exist due to FIRFA ultimately fall under an exception to Copyright infringement.

Turning to the infringement issue under § 271(g) issue, the Federal Circuit held in an issue of first impression that “the single entity requirement, which is necessary for direct infringement liability under § 271(a), has no application to acts that do not constitute infringement under § 271(g).” The Court’s focused on the language of § 271(g), and in particular, that infringement occurs when “whoever without authority imports . . . or offers to sell, sells, or uses . . . a product.” In the Court’s view, this showed that the focus of infringement is the final product. Thus, if a product is manufactured by an infringing method, there is infringement even if the single-entity rule of § 271(a) is not met.

Practice Note: Infringement under § 271(g) does not require the single-entity rule. Thus, a party may be liable under § 271(g) even though there is no liability under § 271(a).

Gilbert Smolenski, a law clerk in the Washington, DC, office, authored this article.

© 2020 McDermott Will & Emery

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