Exporting Technology Information to Colleagues Abroad Requires License

Posted on May 10, 2008 by Brian Wm. Higgins

     Employees of Maryland companies with R&D, manufacturing, and other  capabilities located outside the US may be tempted to collaborate with their counterparts located abroad. It's important to remember, however, that exporting technology information outside the US is highly regulated by several US agencies.

     If the exportation of technology information to overseas colleagues (or to anyone else) is for the sole purpose of filing a patent application outside the US, a license to export that information must first be obtained from the U.S. Patent & Trademark Office (PTO). 35 U.S.C. § 184 provides the legal basis for that requirement:

"Except when authorized by a license obtained from the Commissioner of Patents a person shall not file or cause or authorize to be filed in any foreign country prior to six months after filing in the United States an application for patent or for the registration of a utility model, industrial design, or model in respect of an invention made in this country. A license shall not be granted with respect to an invention subject to an order issued by the Commissioner of Patents pursuant to section 181 of this title [Patent Secrecy Act] without the concurrence of the head of the departments and the chief officers of the agencies who caused the order to be issued. The license may be granted retroactively where an application has been filed abroad through error and without deceptive intent and the application does not disclose an invention within the scope of section 181 [i.e, secrecy] of this title."

     The term "application" includes patent applications and any modifications, amendments, or supplements thereto, or divisions thereof.

     For information concerning the consequences of failing to comply with the requirements set forth above, continue reading...


     According to § 184, the scope of a foreign filing license shall permit subsequent modifications, amendments, and supplements containing additional subject matter if the application upon which the request for the license is based is not, or was not, required to be made available for inspection under § 181 of this title [Patent Secrecy Act] and if such modifications, amendments, and supplements do not change the general nature of the invention in a manner which would require such application to be made available for inspection under such § 181.

     In any case in which a license is not, or was not, required in order to file an application in any foreign country, such subsequent modifications, amendments, and supplements may be made, without a license, to the application filed in the foreign country if the US application was not required to be made available for inspection under § 181 and if such modifications, amendments, and supplements do not, or did not, change the general nature of the invention in a manner which would require the United States application to have been made available for inspection under such § 181.

     Under 35 U.S.C. § 185,

"Notwithstanding any other provisions of law any person, and his successors, assigns, or legal representatives, shall not receive a United States patent for an invention if that person, or his successors, assigns, or legal representatives shall, without procuring the license prescribed in section 184 of this title, have made, or consented to or assisted another's making, application in a foreign country for a patent or for the registration of a utility model, industrial design, or model in respect of the invention. A United States patent issued to such person, his successors, assigns, or legal representatives shall be invalid, unless the failure to procure such license was through error and without deceptive intent, and the patent does not disclose subject matter within the scope of section 181 of this title.

     Under 35 U.S.C. § 186,

"Whoever, during the period or periods of time an invention has been ordered to be kept secret and the grant of a patent thereon withheld pursuant to section 181 of this title, shall, with knowledge of such order and without due authorization, willfully publish or disclose or authorize or cause to be published or disclosed the invention, or material information with respect thereto, or whoever willfully, in violation of the provisions of section 184 of this title, shall file or cause or authorize to be filed in any foreign country an application for patent or for the registration of a utility model, industrial design, or model in respect of any invention made in the United States, shall, upon conviction, be fined not more than $10,000 or imprisoned for not more than two years, or both.

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Wyeth v. Lupin: Maryland District Court Denies Motion to Dismiss

Posted on September 21, 2007 by Brian Wm. Higgins

     In Wyeth v. Lupin, Ltd. and Lupin Pharmaceuticals, Inc., No. 07, Civ. 0632 (D. Md Sep. 11, 2007), the District Court for the District of Maryland denied Baltimore-based Lupin Pharmaceuticals, Inc.'s (LPI) motion to dismiss an action against it and its parent, Mumbai, India-based Lupin Ltd. (Lupin), brought by pharmaceutical giant Wyeth. In reaching its decision, the District Court concluded that "when a wholly-owned U.S. subsidiary of a foreign corporation exists to distribute foreign-produced generic drugs in the U.S. and is actively involved in the ANDA process, the subsidiary also 'submits' an ANDA application" making it subject to the Hatch-Waxman Act like its parent.

     This case began when Lupin filed an Abbreviated New Drug Application (“ANDA”) with the FDA seeking approval to market a generic version of EFFEXOR® in the U.S. Under the Hatch-Waxman Act, the filing of an ANDA is an act of infringement. Accordingly, Wyeth, which owns U.S. Patents 6,274,171; 6,403,120; and 6,419,958 for venlafaxine hydrochloride (marketed by Wyeth as EFFEXOR® XR capsules), sued LPI and Lupin within the statutory 45-day period after receiving Lupin's "Paragraph IV" Notice Letter on January 30, 2007.

LPI's Motion to Dismiss

     LPI moved, under F.R.C.P. Rule 12(b)(6), to dismiss the complaint against it, arguing that under the Hatch-Waxman Act, the only act of direct infringement under 35 U.S.C. § 271(e)(2)(A) was Lupin's filing of the ANDA with the FDA. Wyeth sought to maintain LPI in the lawsuit, arguing that there is no “one-defendant-per-ANDA” rule under the Hatch-Waxman Act. LPI, Wyeth said, acted in concert with Lupin to violate Wyeth’s patents.

     The District Court began its analysis by noting that Lupin had made the same arguments, unsuccessfully, in Aventis Pharma Deutschland GMBH v. Lupin Ltd., 403 F. Supp. 2d 484, 494 (E.D. Va. 2005). In that case, the district court found:

"LPI’s relationship with Lupin was that of a subsidiary of the applicant and that subsidiary
submitted the ANDA application to the FDA as agent on the foreign company’s behalf."

     The Maryland District Court also noted that in the Aventis case, LPI had countersigned Lupin's ANDA, which provided further indication that LPI was more than a “mailbox” for Lupin’s U.S. business interests. The District Court then distinguished the present case from SmithKline Beecham Corp. v. Geneva Pharms., Inc., 287 F. Supp. 2d 576 (E.D. Pa. 2002), where an innovator sought to amend it complaint by adding a third-party manufacturer that was supplying an active ingredient for the generic drugs at issue in the disputed ANDA. Concluding that LPI had not met its burden, the Maryland District Court then found:

"LPI is actively involved with filing Lupin’s ANDAs with the FDA, and marketing and distributing the approved generic drugs in the United States. LPI’s role in filing the ANDA is distinct from the future promises of support made by the third-party manufacturers in the SmithKline cases. The Court does not read § 271(e)(2) as broadly as the Aventis court, which placed significance on LPI’s countersignature as part of its agent-principal relationship with Lupin. But when a wholly-owned U.S. subsidiary of a foreign corporation exists to distribute foreign-produced generic drugs in the U.S. and is actively involved in the ANDA process, the subsidiary also 'submits' an ANDA application."

     LPI also moved, unsuccessfully, to dismiss the induced infringement claims against it. In its analysis of LPI's arguments, the District Court noted that the Federal Circuit has recognized a cause of action for induced infringement under § 271(e)(2), Allergan, Inc. v. Alcon Labs., Inc., 324 F.3d 1322, 1331 (Fed. Cir. 2003) (per curiam), and also acknowledged that other district courts before and after Allergan have disagreed about whether inducement liability exists for entities that were not the named ANDA filers (citing S.D. New York., D. of Delaware, N.D. West Virginia, E.D. Pennsylvania, N.D. Illinois). Based on the pleadings in this case, the Court sided with Wyeth: 

"Wyeth has sufficiently alleged that LPI actively induced infringement under § 271(e)(2). Wyeth alleges that LPI was actively involved in the ANDA submission process, aided and
abetted the inducement of the patents-in-suit, and upon FDA approval, will infringe the patents-in-suit 'by making, using, offering to sell, selling and/or importing' Lupin’s proposed generic capsules. As Wyeth’s claim is not foreclosed by § 271(e)(2) and has adequately alleged an inducement claim against LPI, Wyeth has satisfied the notice pleading requirements."

Held:  LPI's motion to dismiss was denied.

Comments:

  • Had the Maryland District Court decided this matter differently, Wyeth would be left suing a foreign entity in a U.S. forum (Maryland) where personal jurisdiction would be based on Lupin's filing of its ANDA with the FDA (which just happens to be located in Rockville, MD), and based on whatever other contacts Lupin has in the forum through its subsidiary, LPI.  See Personal Jurisdiction and the Foreign Defendant, by Lisa Savitt and Melissa Pierre for a good summary of personal jurisdiction issues related to foreign defendants.

  • It's unclear from this case whether a U.S. subsidiary that exists simply to distribute foreign-produced generic drugs in the U.S. and is not actively involved in the ANDA process would prevail on a motion to dismiss in Maryland.
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