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Jubilant Draximage Inc. v. United States International Trade Commission

United States District Court, District of Columbia

July 10, 2019

JUBILANT DRAXIMAGE INC., Plaintiff,
v.
UNITED STATES INTERNATIONAL TRADE COMMISSION, Defendant.

          MEMORANDUM OPINION AND ORDER

          RANDOLPH D. MOSS, UNITED STATES DISTRICT JUDGE

         Plaintiff Jubilant DraxImage Inc. (“JDI”) manufactures a Rubidium Elution System (“RUBY”), one of only two medical devices used for Cardiac Positron Emission Tomography, a non-invasive imaging procedure designed to evaluate patients for coronary artery disease. JDI's principal-indeed only-competitor in this specialized field is Bracco Diagnostics Inc. (“Bracco”), a company manufacturing a similar device. JDI is currently in proceedings before the United States International Trade Commission (“the Commission”) addressing whether JDI's RUBY technology infringes on a series of Bracco's patents. In the course of those proceedings, the Commission ordered JDI publicly to disclose portions of its briefs, all of which were filed under seal. JDI objects to making public those portions of its briefs that cite or reference Bracco's patent claims. The reason? Revealing the specific Bracco claim elements at issue would, according to JDI, allow Bracco to modify or remove the very claim elements that make JDI's products non-infringing. In other words, Bracco could use JDI's references to particular portions of Bracco's lengthy patent claims, which are public, to infer the manner in which JDI has attempted to engineer around Bracco's patents, which is not public. JDI seeks a preliminary injunction to prohibit the Commission from enforcing its disclosure order. As explained below, JDI has demonstrated that it is entitled to preliminary relief. The Court will therefore GRANT the motion for a preliminary injunction.

         I. BACKGROUND

         JDI is a radiopharmaceutical company based in Kirkland, Canada. Dkt. 1 at 3 (Compl. ¶ 7). Among other things, JDI markets a medical device named RUBY, an elution system that generates Rubidium-82 Chloride, a chemical used for Cardiac Positron Emission Tomography, a non-invasive imaging procedure used to evaluate regional myocardial perfusion in adult patients with suspected or existing coronary artery disease. Id. at 4 (Compl. ¶ 11). The Food and Drug Administration (“FDA”) first approved RUBY in 2016. Id. (Compl. ¶ 12). As soon as the FDA approved JDI's device, Bracco submitted a FOIA request to the FDA and obtained a RUBY product manual from the agency. Id. (Compl. ¶ 13). Bracco was able to claim priority to earlier-filed patent applications and, between September and November 2017, Bracco used information in the product manual to seek and to obtain three continuation patents crafted to claim the technology found in the RUBY product. Id. at 4-5 (Compl. ¶ 13). As soon as those patents issued, Bracco filed a complaint with the Commission, alleging violations of Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. Id. at 5 (Compl. ¶ 14). The Commission instituted the current investigation in May 2018. Id.

         In response to Bracco's complaint with the Commission, JDI created two new versions of RUBY “specifically designed to avoid infringement of Bracco's three patents”-Versions 3.1 and 4. Id. (Compl. ¶ 17). In proceedings before the Commission, JDI attempted to show that these new versions did not infringe Bracco's existing patents. JDI filed a motion for summary determination (“MSD”)-the equivalent of a summary judgment motion-which compared the technology behind Versions 3.1 and 4 against Bracco's patent claims. Id. at 6 (Compl. ¶ 21); see also Dkt. 4-5 at 15-56 (Ex. 1 to Confidential Ex. E). To show that the new versions did not infringe Bracco's patents, JDI quoted specific portions of-and highlighted key terms in- Bracco's lengthy patent claims. Dkt. 4-5 at 24-27. “Because the emphasized claim limitations identif[ied] the specific features of the RUBY product that were redesigned, ” JDI feared that, if made aware of the precise claim elements that JDI had designed around, Bracco would file yet another set of continuation patents in an effort to exclude the new designs utilized in Versions 3.1 and 4. Dkt. 1 at 6-7 (Compl. ¶¶ 23-24). JDI, accordingly, treated all references to Bracco's claim elements as “confidential business information” pursuant to Commission regulations and “redacted the portions of its [briefs] discussing, quoting, and emphasizing these limitations of Bracco's patent claims in the public version of its brief.” Dkt. 1 at 6 (Compl. ¶ 23). JDI did this in four portions of its brief: the background sections for Versions 3.1 and 4, which list the particular claim elements at issue, and in the merits sections for Versions 3.1 and 4, which argue that the new designs do not infringe the identified claim elements.

         Commission staff attorneys objected to a number of JDI's redactions and filed a motion to declassify portions of JDI's brief. See Dkt. 4-1 (Confidential Ex. A). Specifically, the Commission staff argued that “passages quoting from [Bracco's] patents or descriptions of the scope of patents and claims do not fall within the Commission's definition of confidential business information” and that, “unless the sentence explicitly describes the specific aspects of the RUBY Version 3.1 and Version 4 systems, any quotation from or discussion of the asserted [Bracco] patents should not be redacted.” Id. at 4-5. JDI opposed the motion, arguing that “[a]ny patent attorney reading a brief seeking a determination of noninfringement that provides a background overview of specific claim limitations would readily recognize that those claim limitations form the basis for why the confidential products do not infringe” and that, “for example, ” one of Bracco's limitations “concerns a binary design option.” Dkt. 4-2 at 11 (Confidential Ex. B). Reviewing a proposed, redacted brief provided by Commission staff, moreover, JDI compared redactions approved by the Commission staff to those rejected and argued that “there is no real difference between the redacted passages reproduced below that the Staff seeks to reclassify. . . and those it has approved.” Id. at 12-13.

         On March 21, 2019, a Commission Administrative Law Judge (“ALJ”) issued Order No. 31, “Initial Determination Granting-in-Part Commission Investigative Staff's Motion to Declassify Portions of Respondents' Motion for Summary Determination.” Dkt. 4-3 (Confidential Ex. C). The Order explained that “confidentiality determinations . . . are governed by the definition given in 19 C.F.R. § 201.6(a).” Id. at 4. That definition, according to the ALJ, mandates a “two-part test.” Id. First, the ALJ “asks whether the contested information ‘concerns or relates to the trade secrets, processes, operations, style of works, or apparatus, or to the production, sales, shipments, purchases, transfers, identification of customers, inventories, or amount or source of any income, profits, losses or expenditures of any person, firm, partnership, corporation, or other organization, or other information of commercial value.'” Id. at 3 (citation omitted) (quoting 19 C.F.R. § 201.6(a)). Second, the ALJ determines whether “the disclosure of such information [would] be likely to have the effect of either (1) ‘impairing the Commission's ability to obtain such information as is necessary to perform its statutory functions,' or (2) ‘causing substantial harm to the competitive position of the person, firm, partnership, corporation, or other organization from which the information was obtained.'” Id. at 3-4 (alteration in original) (citation omitted) (quoting 19 C.F.R. § 201.6(a)).

         The ALJ acknowledged JDI's argument that, “by identifying specific claim limitations that are not practiced by [JDI's] revised products, a reader may deduce the operation of those products.” Id. at 4. With respect to Version 3.1, for example, the ALJ noted JDI's argument that the relevant claim element concerned “a binary design decision” and “that language in its brief stating that it does not practice the [specific] limitation necessarily reveals . . . the [RUBY] elements in question . . . and that is competitive information not available to the public.” Id. at 4-5. Applying the two-part test, the ALJ “agree[d] that declassification of those redactions [i.e., those that revealed a “binary design decision”] from the public version of the [JDI] MSD would reveal a confidential design feature of [JDI's] product, ” and, accordingly, rejected the Commission staff's motion with respect to those redactions. Id. at 5. Turning to the Version 4 patents, however, the ALJ determined that “it is not true, as a factual matter, that a reader can deduce the configuration of [JDI's] product from [those specific Bracco claim] statements” because “[m]ultiple possibilities exist . . . that avoid[] the limitation in question.” Id. at 5-6. The ALJ, accordingly, concluded that specific references to Bracco's patents related to RUBY Version 4 “do not constitute [JDI's] confidential business information” and ordered JDI “to file a replacement public version of its motion for summary determination with the improper redactions removed.” Id. at 6.

         JDI appealed to the Commission. Dkt. 4-4 (Confidential Ex. D). Arguing that the ALJ's focus on whether the specific design choices “involve[d] a binary, either-one-or-the-other choice . . . misses the point, ” JDI stressed that “early identification of the emphasized claim limitations will reveal to Bracco the specific limitations that [JDI's] Version 4 products omit, which would allow Bracco to file new applications containing claims that simply omit the designed-around limitations.” Id. at 15. On May 6, 2019, the Commission issued a Notice of Commission Decision to Review in Part an Initial Determination Granting-in-Part a Motion to Declassify (“Notice”). Dkt. 1-1 (Compl. Ex. A). In a single sentence, the Commission affirmed the ALJ's Order No. 31.[1] Id. at 3. The Commission also attached a version of JDI's brief, edited by Commission staff, showing which redactions the Commission approved and which redactions JDI would have to forgo. See Id. at 2; see also Dkt. 4-5 at 11-56 (Ex. 1 to Confidential Ex. E). The Commission stayed its order for 21 days to allow JDI to seek judicial review of its disclosure order. Dkt. 1-1 at 3 (Compl. Ex. A). The Commission later extended that stay until July 12, 2019. June 21, 2019 Hrg. Tr. (Rough at 20:17-19).

         JDI filed the instant suit on May 22, 2019, seeking relief under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq. and a writ of mandamus, 28 U.S.C. § 1361. Among other things, JDI alleges that the Notice is “arbitrary, capricious, and contrary to law, ” Dkt. 1 at 11 (Compl. ¶ 44), and that the Commission “owes a non-discretionary duty not to disclose information properly designated as confidential under Commission rules, ” id. at 12 (Compl. ¶ 56). JDI filed a motion for a preliminary injunction that same day, Dkt. 3, as well as a motion to seal portions of the administrative record, Dkt. 4.[2] After setting a schedule with the parties' consent, the Court held oral argument on June 21, 2019, and those motions are now ripe for decision.

         II. ANALYSIS

         “A preliminary injunction is an extraordinary remedy never awarded as of right, ” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008), but “only when the party seeking the relief, by a clear showing, carries the burden of persuasion, ” Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004). To secure a preliminary injunction, a plaintiff “must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter, 555 U.S. at 20. “The last two factors ‘merge when the Government is the opposing party.'” Guedes v. Bureau of Alcohol, Tobacco, Firearms & Explosives, 920 F.3d 1, 10 (D.C. Cir. 2019) (quoting Nken v. Holder, 556 U.S. 418, 435 (2009)).

         Before the Supreme Court's decision in Winter, courts in this circuit applied a “sliding-scale” approach to the preliminary injunction analysis under which “a strong showing on one factor could make up for a weaker showing on another.” Sherley v. Sebelius, 644 F.3d 388, 392 (D.C. Cir. 2011). Since Winter, the D.C. Circuit has hinted on several occasions that “a likelihood of success is an independent, free-standing requirement for a preliminary injunction, ” id. at 393 (quoting Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1296 (D.C. Cir. 2009) (Kavanaugh, J., concurring)), but it has repeatedly declined to decide that issue, see Am. Meat Inst. v. U.S. Dep't of Agric., 746 F.3d 1065, 1074 (D.C. Cir. 2014), reinstated in relevant part by 760 F.3d 18 (D.C. Cir. 2014) (en banc); see also League of Women Voters of United States v. Newby, 838 F.3d 1, 7 (D.C. Cir. 2016); Sherley, 644 F.3d at 393 (reading “Winter at least to suggest if not to hold ‘that a likelihood of success is an independent, free-standing requirement for a preliminary injunction, '” but declining to decide the issue (quoting Davis, 571 F.3d at 1296)).

         Here, because all four factors weigh in favor of granting a preliminary injunction, JDI is entitled to preliminary relief ...


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