Date: 07-16-2001

Case Style: International Nutrition v. Horphag Research, Ltd.

Case Number: 00-1408

Judge: Mayer

Court: United States Court of Appeals for the Federal Circuit

Plaintiff's Attorney: Norman H. Zivin, Cooper & Dunham, LLP, of New York, New York, argued for plaintiff-appellant. With him on the brief was Donna A. Tobin. Of counsel was Robert D. Katz.

Defendant's Attorney: Joseph A. Calvaruso, Morgan & Finnegan. L.L.P., of New York, New York, argued for appellee Arkopharma, Inc. With him on the brief was Richard C. Komson.

Daniel Ebenstein, and Anthony Francis Lo Cicero, Amster, Rothstein, of New York, New York, for defendant-appellee Twin Laboratories, Inc.

Marvin S. Gittes, Cobrin & Gittes, of New York, New York, argued for defendants-appellees Horphag Research, Ltd., et al. With him on the brief was Michael A. Adler.

Edwin D. Schindler, of Coram, New York, for defendant-appellee New Vision International, Inc. with him on the brief were Charles L. Howard, Patrick M. Fahey, and Sheila A. Huddleston, Shipman & Goodwin LLP, of Hartford, Connecticut.

Thomas G. Rowan, Pennie & Edmonds LLP, of New York, New York, argued for defendants-appellees Enzymatic Therapy, Inc. and Indena U.S.A. With him on the brief were Brian M. Poissant and Anthony M. Insogna. Of counsel on the brief was Carl P. Bretscher.

Brent P. Lorimer of Workman, Nydegger & Seeley, of Salt Lake City, Utah, for defendant-appellee USANA, Inc. With him on the brief was David R. Todd.

Mark D. Giarratana, and Eric E. Grondahl of Cummings & Lockwood, of Hartford, Connecticut, for defendant-appellee Jarrow Formulas, Inc.

Michael J. Rye, and Philmore H. Colburn II of Cantor Colburn LLP, of Bloomfield, Connecticut, for defendant-appellee Chemco Industries, Inc. Of counsel was Charles F. O’Brien.

Steven P. Ciardiello, of Hamden, Connecticut, for defendant-appellee Free Life International Ltd.

Mark A. Pals, Jay I. Alexander, and Christina M. Sarris of Kirkland & Ellis, of Chicago, Illinois, for defendant-appellee Nutraceutical Corporation.

Description: International Nutrition Company (“INC”) appeals the summary judgment of the United States District Court for the District of Connecticut holding that (1) Horphag Research Ltd. (“Horphag”) and numerous other defendants are not liable for infringement of United States Patent No. 4,698,360 (“’360 patent”) directed to a “[p]lant extract with a proanthocyanidins content as therapeutic agent having radical scavenger effect and use thereof”, and (2) Horphag, MW International, Inc., and Kaire International, Inc. are not liable for unfair competition in violation of the Lanham Act by representing that INC is not an owner of the ’360 patent. Int’l Nutrition Co. v. Horphag Research Ltd., No. 3:96CV386 (DJS) (D. Conn. March 18, 2000). INC additionally appeals the district court’s denial of its motions for leave to join a party and for leave to file an amended complaint. Int’l Nutrition Co. v. Horphag Research Ltd., No. 3:96CV386 (DJS) (D. Conn. April 14, 2000).

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Background

Jack Masquelier, Elian Barraud, Jean Michaud, and Jean Laparra formed Societe Civile D’Investigations Pharmacologiques D’Aquitane (SCIPA), a company incorporated under French law and with a registered office in Bordeaux, France, in April 1970. In April 1985, Horphag Overseas Limited, a company incorporated under English law and registered in the Channel Islands, executed in France a joint development contract with SCIPA, to develop new products for medical use. Article 5 of the development contract specifies that any patent applications resulting from the collaboration shall be filed jointly by the parties. It further specifies that “[i]n the case of assignment or grant of the industrial property rights arising from the present contract, the proceeds will be shared equally by the parties.” Article 7 requires that any litigation regarding the interpretation or performance of the present contract shall be the exclusive jurisdiction of the courts of Bourdeaux. The development contract was set to expire in April 1990 with the possibility of an automatic renewal period for five additional years.

On April 9, 1985, a United States patent application based on work covered by the ’360 patent was filed listing Masquelier as its sole inventor. The substance of Masquelier’s invention was a method for the extraction from plants of an active ingredient capable of combating the principal free radicals responsible for the aging of cells. On April 1, 1985, Masquelier assigned his rights in the future ’360 patent to SCIPA and Horphag.

In 1994, SCIPA assigned its rights in the ’360 patent to INC, a company organized under the law of Liechtenstein. In 1995, Horphag initiated litigation against SCIPA and INC in the French Court of Primary General Jurisdiction of Bordeaux under Article L 613-29(e)[1] of the French Code of Intellectual Property in an effort to void the 1994 assignment to INC. Horphag v. SCIPA, Certified Translation of the Judgment of the French Court of Primary General Jurisdiction of Bordeaux at 6A (March 25, 1997). In 1996, Masquelier executed a confirmatory assignment of any rights to the ’360 patent that might revert to him to INC.

The French trial court stated that “the law applicable to the contracts involving the patent is not necessarily the law of the country of protection, because it is then the autonomy of the intent of the parties which prevails.” Id. at 15A. It further noted that (1) the development contract had no choice of law provision but did explicitly select the choice of forum as the courts of Bordeaux, (2) the research under the development contract was to be carried out by SCIPA, a French company, in France, (3) the only international reference was to Horphag’s international network of commercial relationships, and (4) no particular reference is made to the United States. Id. at 16A. Thus, the trial court concluded that “[u]nder these circumstances, no criterium exists for linking this contract with American law, no more than with any other foreign law, and it appears that the only law applicable is the law of France, as implemented by the courts of France.” Id. It declared the 1994 assignment void for violating French statutory prohibitions against joint owners unilaterally assigning their ownership stakes in patents. Id. at 17A-18A.

The French court of appeals concluded that INC received no interest in the ’360 patent from Masquelier’s 1996 confirmatory assignment because he “lost his rights as soon as he assigned them on April 1, 1985, [and] is also unable to devote himself to any exploitation whatsoever.” SCIPA v. Horphag, Certified Translation of the Judgment of the Bordeaux Court of Appeals at 48 (May 28, 1998). It affirmed the trial court’s judgment on the ownership issue and held that INC “no longer has any right whatsoever appertaining to the patent 360 [and] is no longer able to exploit the same.” Id.

INC brought the present suit in the United States District Court for the District of Connecticut alleging, inter alia, that the defendants (including Horphag) were infringing the ’360 patent. The district court extended comity to the French court decisions because they determined the ownership interests under the development contract and were not contrary to United States patent law, and granted summary judgment that INC lacked standing to bring its patent infringement claims because it has no ownership interest in the ’360 patent. INC then moved to amend its complaint to join Centre d’Experimentation Pycnogenol (“CEP”) as a party, alleging that CEP had acquired SCIPA and its interest in the ’360 patent in 1998. INC further alleged that it owned a controlling interest in CEP and therefore in SCIPA’s interest in the ’360 patent. The district court denied INC’s motions to amend the complaint and to join CEP as a party because they were futile. This appeal followed.

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Click the case caption above for the full text of the Court's opinion.

Outcome: Affirmed.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: Reported by Kent Morlan