ITC Asked to Ban Imports of Covid Testing Swabs
On July 9, Copan Industries—an Italian company with a factory in Puerto Rico—filed a Section 337 complaint asking the ITC to issue a general exclusion order against Flocked Swabs, Products Containing Flocked Swabs, and Methods of Using Same. Copan owns a series of patents describing flocked swabs manufactured in a particular way.
What makes this case especially interesting is that the accused articles—fancy q-tips with plastic bristles on the end instead of cotton—are imported almost exclusively to use in Covid tests, presenting an obvious public interest problem.
Section 337 requires the ITC to consider the effect of an exclusion order on the public interest before issuing an import ban. Despite clear legislative intent that public interest concerns be an “overriding consideration in the administration of this statute,” the agency has been extremely reluctant to deny any remedy on public interest grounds—the third and last time it ever did so was over 35 years ago. It’s possible, though, that even the ITC would balk at issuing a remedy that causes a shortage of Covid tests.
Before the pandemic, there were two companies supplying flocked swabs to the U.S. market: Copan and Maine-based Puritan Medical Products. Because Puritan manufactures its swabs in the United States, it is not a respondent in the ITC complaint, but Copan did sue Puritan for patent infringement in federal district court in 2018. That litigation has been on hold since May 2020, when the U.S. government started actively working to increase the supply of flocked swabs under the Defense Production Act, including through contracts with Puritan. Despite these efforts to increase domestic production, much of the astronomically-increased demand for flocked swabs could only be met by imports.
One of the named respondents in the complaint, Thomas Scientific, described its experience with swab shortages in a public interest comment to the agency:
In the early stages of the COVID-19 pandemic, Thomas asked Copan directly about purchasing flocked swabs but was denied access to Copan’s product line and told that all available swabs were “on allocation,” that is, promised to existing customers. Thomas also attempted to purchase flocked swabs from Puritan, another supplier mentioned in Copan’s Statement, but was again told that all but a small number were promised to other customers and therefore unavailable.
As Thomas and others quickly realized, the rapid spread of COVID-19 and extraordinary demand for viral testing resulted in significant shortages of flocked swaps across the United States and worldwide. In early 2020, Thomas was awarded a contract with the federal government, specifically FEMA, to sell swabs for the National Stockpile, as well as providing flocked swaps directly to individual State governments for their use in patient testing. Despite the immediate public health emergency and well-defined demand, Thomas was unable to purchase the necessary quantities from either Copan or Puritan, and shortages were so acute that they limited COVID-19 testing.
Eventually, management of the FEMA contract was taken over by the Department of Health and Human Services (HHS) and then by the Defense Logistics Agency (DLA). Because of continuing shortages of flocked swabs and the dire public health circumstances, FEMA and HHS ultimately approved suppliers other than Puritan and Copan for fulfillment of this contract.
The timing of this complaint, however, seems intentionally designed to mitigate concerns about supply disruption. In its own public interest statement, Copan notes that there is no longer an emergency need for test kits due to “the proliferation of effective vaccines that prevent transmission of COVID-19.” They argue that “the demand for flocked swabs has already plateaued at sustainable levels” that can be adequately met by Copan and its licensees. That may even be more true 18 months from now when the ITC’s investigation would conclude and, if Copan succeeds on the merits, an exclusion order would actually go into effect.