We don’t get to write much about the Federal Circuit.  It is unique in our federal court system in that it has nationwide jurisdiction over specialized subjects, most notably patent and trademark.  We are guessing the Federal Circuit sees a lot of drug and medical device cases as companies dispute intellectual property rights of one kind or another, and we picture the judges and clerks reading densely packed briefs written by engineers-turned-lawyers who are able to explain how one thing “teaches from” another, or how this thing “reads onto” that.  Patent lawyers and the judges they practice before have their own language, which makes us admire them all the more.

We are also guessing that the Federal Circuit does not see a lot of the FDCA.  A quick search of published Federal Circuit opinions found that the Federal Circuit cited the FDCA just once in all of 2013.  Did you think that we at the Drug and Device Law Blog would miss such a momentous event?  Certainly not, and we are doubly excited to report that the case at hand involved federal preemption of a state unfair competition statute, even though the opinion came out the wrong way.

The case is Allergan, Inc. v. Athena Cosmetics, Inc., No. 2013-1286, 2013 U.S. App. LEXIS 25746 (Fed. Cir. Dec. 30, 2013), which started unsurprisingly as a patent dispute.  The plaintiff Allergan sells a product called Latisse, a prostaglandin derivative and FDA-approved prescription drug indicated for eyelash growth.  Readers might recall the commercials for Latisse that ran a few years ago featuring Brooke Shields, the forty-something actress whose accomplishment-to-notoriety ratio is shockingly low.  But we digress.  The defendant Athena Cosmetics also sells a prostaglandin derivative for eyelash growth, but it does so without the FDA’s approval.  It seems the cosmetic manufacturer defendant considered the product to be the same as mascara and fingernail polish, which do not require approval through new drug applications (“NDAs”) if they affect only a person’s appearance.

The prescription drug manufacturer took issue with that and sued the cosmetic manufacturer for patent infringement (which is how the case wound up in the Federal Circuit) and also for violating California’s Unfair Competition Law (“UCL”) by marketing its eyelash product without an NDA.  2013 U.S. App. LEXIS 25746, at **2-3.  In a not-so-common use of federal preemption, the defendant cosmetic manufacturer moved for judgment on the pleadings on the basis that FDCA preempted the plaintiff prescription drug manufacturer’s UCL claim.  Id. at *3.

We think the cosmetic manufacturer had a point.  The FDCA requires FDA approval before any new drug can be sold in interstate commerce, and the definition of a drug includes “articles (other than food) intended to affect the structure or any function of the body.”  21 U.S.C. §§ 201(g)(1), 355(a).  Let’s see.  You apply the product; it makes your eyelashes grow.  Seems, like an article affecting a “structure of the body” to us—ergo, it’s a drug.  The more important point, however, is that Section 337(a) gives the FDA exclusive power and discretion to enforce the FDCA.  The defendant cosmetic manufacturer therefore urged that the prescription drug manufacturer’s UCL claim interfered with the FDA’s discretionary authority to determine whether to regulate the product as a drug, and thus was impliedly preempted, citing Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).  Id. at *8.

The Federal Circuit saw the law differently, and not only did it hold that the district court properly retained jurisdiction over the UCL claim, but also that the district court properly granted summary judgment for the plaintiff prescription drug manufacturer and permanently enjoined the cosmetic manufacturer from selling its product.  Id. at **7-17.  According to the Federal Circuit, because the California Health Code parallels certain FDCA provisions—including a requirement that no person shall sell any new drug without NDA approval—the prescription drug manufacturer was enforcing a state law “implicat[ing] an historic state power that may be vindicated under state law tort principles.”  Id. at *10.  The court further reasoned that Congress did not intend to preempt such state law claims because it did not expressly so provide in the FDCA.  Id. at *11.  In the end, the Court concluded that the California Health Code is “not an obstacle to realizing federal objectives” because “it contains provisions that parallel the FDCA, such that the statutes have consistent goals.”  Id. at *11.

We suspect that the district court and the Federal Circuit had the same reaction to the dispute as we did:  If it walks like a drug and quacks like a drug, it’s a drug; and you can’t sell a drug without an NDA.  So they retained jurisdiction and put a stop to it.

The problem is that the law does not permit that result.  For one thing, the cosmetic manufacturer argued that the FDCA impliedly preempted the prescription drug manufacturer’s UCL claim.  The court nonetheless searched the FDCA for an express provision preempting claims involving prescription drugs and labored to identify the UCL claim as “parallel” to federal requirements.  By invoking principles of express preemption, including the much-misunderstood “parallel claim” doctrine, the court accomplished nothing more than to muddy the water.

Moreover, the sidetrack into parallel claims appears to have led to the Court to conclude that there was no implied preemption because the state and federal laws are the same anyway.  That is the wrong analysis.  Under implied preemption, the question is whether compliance with state law poses an obstacle to accomplishment and execution of the full purposes and objectives of Congress or whether it is impossible to comply with both state and federal law.  Here, Congress gave the FDA exclusive authority to determine whether a product should be regulated as a drug, and that prerogative cannot co-exist with 50 state health departments (or thousands of courts applying state law) undertaking the same task.  Imagine if state officials or courts of law came to different results for the same product, a scenario that we view as likely.  That seems to us to be an obstacle to the federal purpose of uniform federal regulation of the marketing of drugs.

The Federal Circuit did reverse one aspect of the district court’s injunction—namely, its geographic scope.  Under the authority of one state’s unfair competition statute, the district court enjoined the cosmetic company from selling its eyelash product nationwide.  The Federal Circuit held that the injunction could not extend beyond California because “[n]either the California courts nor the California legislature are permitted to regulate commerce entirely outside the state’s borders.”  Id. at *20.  We very much like this part of the opinion.  Ironically, in limiting the geographic reach of the district court’s order, the court relied heavily on the FDA’s exclusive authority to enforce the FDCA, stating that “[t]he FDA—and the FDA alone—has the power and the discretion to enforce the FDCA” and that “California does not have the authority to stand in the shoes of the FDA to determine whether [the cosmetic manufacturer’s] sale of the products at issue amounts to the sale of an unapproved drug under the FDCA.”  Id. at **21-22.

This closing stanza only reinforces our larger reservations about this opinion.  The Federal Circuit concluded that “imposing [California’s] UCL on other states would violate their sovereignty, and usurp the discretionary enforcement authority of the FDA.”  Id. at *22.  The Federal Circuit therefore recognized that allowing the case to proceed under state law would interfere with others states’ sovereignty and would even “usurp” the FDA’s regulatory authority.  That usurpation, however, was somehow not an obstacle to FDA regulation sufficient to support implied preemption.  Perhaps California residents are better off with one fewer option for growing thicker eyelashes, or maybe they are not.  Either way, we have a difficult time understanding the Federal Circuit’s ruling on federal preemption.