IP Law Daily, PATENT—Fed. Cir.: Appeal dismissed in medical swab patent infringement case in absence of PREP Act determination by lower court, (May 14, 2024)

By Robert B. Barnett Jr., J.D.

Appellate jurisdiction did not exist because the lower court did not “conclusively determine” the immunity issue upon which the appeal was based.

In a patent infringement case in which the district court has denied the defendant swab manufacturer’s motion to dismiss based on immunity under the federal Pandemic Readiness and Emergency Preparedness Act (PREP Act), the U.S. Court of Appeals for the Federal Circuit has dismissed the appeal of that denial for lack of appellate court jurisdiction, ruling that the district court never conclusively determined that the swab manufacturer lacked immunity from patent infringement under the PREP Act. Thus, the collateral order doctrine did not apply to confer jurisdiction on the appellate court because all that the district court said in rejecting the affirmative defense for now was that the current record was inadequate to allow it to make a finding on the question of immunity (Copan Italia SPA v. Puritan Medical Products Co. LLC , No. 22-1943 (Fed. Cir. May 14, 2024)).

Background. Copan Italia S.p.A. and Copan Diagnostics Inc. own patents for swabs used in collecting biological specimens. Copan sued Puritan Medical Products Company LCC and related companies for patent infringement in Maine federal district court, alleging that Puritan’s manufacture of flocked swabs (a rod with a tip covered with fiber) violated several of Copan’s patents.

While the case was pending, COVID-19 struck. Given the medical need for swabs, particularly as they applied to their use COVID-19 detection tests, the two parties received permission from the Maine court to stay the proceedings and to concentrate on COVID-19 issues.

During the COVID-19 crisis, Puritan entered into a contract with the U.S. Air Force to manufacture flocked swabs in an expanded facility. Pursuant to that Air Force contract, Puritan was granted immunity from all claims arising out of its manufacturer of the flocked swabs, under the PREP Act, which had been enacted during the pandemic.

When the stay was lifted in October 2021, and the case was reopened, Puritan sought to amend its answer to include an affirmative defense, asserting that it had immunity from some of the patent infringement claims because of the PREP Act, and it filed a partial motion to dismiss on that ground.

The district court denied the motion to dismiss, ruling that Puritan had failed to establish that the flocked swabs manufactured in the expanded facility were “covered countermeasures,” as the PREP Act required. The court also concluded that the Air Force contract did not support the conclusion that all flocked swabs manufactured at the expanded facility would be used in COVID-19 tests, which was the identified “covered countermeasure.” At the same time, however, the district court allowed Puritan to amend its answer to assert PREP Act immunity as an affirmative defense.

Puritan appealed the district court’s decision denying the partial motion to dismiss to the Federal Circuit. Puritan asserted on appeal that the Federal Circuit had jurisdiction over the interlocutory decision via the collateral order doctrine.

Collateral order doctrine. For the collateral order doctrine to apply, three conditions must exist: (1) the district court’s decision must conclusively determine the disputed question, (2) the decision must resolve in important issue completely separate from the merits, and (3) the decision must be effectively unreviewable on appeal from a final judgment. In reaching its decision on this appeal, the Federal Circuit never addressed the second or third conditions because it ruled that Puritan failed to satisfy the first condition.

To satisfy the first condition, Puritan was required to establish that the district court conclusively determined that Puritan lacked immunity from patent infringement under the PREP Act. An examination of the record revealed no such conclusive determination, the Federal Circuit said.

In fact, the record revealed that the district ruled that the record before it was inadequate to allow it to make a finding on PREP Act immunity. More specifically, the district court concluded that it could not make findings on either the issue of which flocked swabs qualified as “covered countermeasure” or the distribution requirements under the Air Force contract, including whether all of the flocked swabs manufactured at the expanded facility were related to the government contract. “In light of the evidentiary gaps I have noted,” the district court had said, “the dismissal of the amended complaint is not supported because the limited record before me does not show that the PREP Act affirmative defense had been proven.”

The Federal Circuit went on to note that “[c]learly, the district court is contemplating further litigation will be necessary before a conclusive determination can be reached as to whether immunity is available to Puritan in this case.” Thus, the Federal Circuit concluded that the district court had made no findings that Puritan’s flocked swabs were not immune. Rather, the lower court merely concluded that it was in no position to make that ruling at this time. As a result, the Federal Circuit ruled, the lower court never reached a “conclusive determination” on immunity, and thus the first condition for the collateral order doctrine was not satisfied.

The Federal Circuit, therefore, dismissed the appeal for lack of appellate court jurisdiction.

The Case is No. 22-1943.

Judge: Stark, L.

Attorneys: James M. Wodarski (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC) for Copan Italia SPA. James H. Hulme (Arentfox Schiff LLP) for Puritan Medical Products Co. LLC.

Companies: Copan Italia SPA; Puritan Medical Products Co. LLC

Cases: Patent Covid19 FedCirNews MaineNews GCNNews