Court Opinion

ID: 9893406
Source: CourtListenerOpinion
Date Created: 2023-10-26 21:00:41.637694+00
Date Added: 2024-06-11T09:03:04.122969
License: Public Domain

PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                 ___________

                     No. 22-2426
                     ___________

  JANSSEN PRODUCTS, L.P.; PHARMA MAR, S.A.,
                             Appellants

                           v.

EVENUS PHARMACEUTICALS LABORATORIES INC.;
 JIANGSU HENGRUI PHARMACEUTICALS CO., LTD.
                ___________

     On Appeal from the United States District Court
              for the District of New Jersey
             (D.C. Civil No. 1-22-cv-02499)
      District Judge: Honorable Georgette Castner
                      ___________
                 Argued June 14, 2023

Before: PORTER, FREEMAN, and FISHER, Circuit Judges.

            (Opinion filed: October 17, 2023)
                     ___________
Roy T. Englert, Jr. [ARGUED]
Shikha Garg
Kramer Levin Naftalis & Frankel
2000 K Street NW
4th Floor
Washington, DC 20006

Peter C. Harvey
Patterson Belknap Webb & Tyler
1133 Avenue of the Americas
New York, NY 10036

Lisa Kobialka
Kramer Levin Naftalis & Frankel
333 Twin Dolphin Drive
Suite 700
Redwood Shores, CA 94065

Irena Royzman
Daniel I. Sugarman
Christine Willgoos
Kramer Levin Naftalis & Frankel
1177 Avenue of the Americas
New York, NY 10036
       Counsel for Appellants

Arnold B. Calmann
Katherine A. Escanlar
Saiber
18 Columbia Turnpike
Suite 200
Florham Park, NJ 07932

                            2
Clifton S. Elgarten
Ali H. K. Tehrani
Crowell & Moring
1001 Pennsylvania Avenue NW
Washington, DC 20004

James K. Stronski [ARGUED]
Crowell & Moring
590 Madison Avenue
20th Floor
New York, NY 10022
       Counsel for Appellees
                       ___________

                OPINION OF THE COURT
                      ___________

FREEMAN, Circuit Judge.

       Plaintiff pharmaceutical companies sued two
competitors for misappropriation of trade secrets. While
discovery was underway, plaintiffs moved ex parte for an order
seizing some of defendants’ property. The District Court
declined to order a seizure, concluding that plaintiffs did not
satisfy the requirements for that extraordinary form of relief
available under the Defend Trade Secrets Act, 18 U.S.C.
§ 1836. Plaintiffs appealed. Because the District Court’s order
does not qualify for immediate appellate review, we will
dismiss the appeal for lack of jurisdiction.

                              3
                               I

       Appellants Janssen Products, L.P. and Pharma Mar,
S.A. (together, “Janssen”) spent ten years and over half a
billion dollars developing a stable, injectable version of the
cancer drug trabectedin.1 They documented how to produce
the drug for treatment on a commercial scale and patented
some of the processes. They kept their data, specifications, and
methods for manufacturing the drug confidential, and they
consider that information trade secrets. The final drug product
they developed is trademarked and sold as Yondelis.

       In 2015, the U.S. Food and Drug Administration
(“FDA”) approved Yondelis for use in certain cancer patients.
Two years later, two competitors—Jiangsu Hengrui
Pharmaceuticals Co. Ltd. (“Hengrui”), a Chinese corporation,
and its U.S. subsidiary, eVenus Pharmaceuticals Laboratories,
Inc. (“eVenus”)—sought FDA approval to sell a generic
version of Yondelis. Janssen sued Hengrui and eVenus for
patent infringement.

       During discovery in the patent case, Janssen obtained
documents that led them to believe Hengrui and eVenus
misappropriated their trade secrets. In April 2022, they filed a
separate lawsuit seeking relief under the Defend Trade Secrets
Act, 18 U.S.C. § 1836 (“DTSA”), and state law.

       The parties had a series of contentious discovery
disputes in the patent case and the trade secrets case, and
Janssen became convinced that Hengrui and eVenus had
spoliated evidence. They filed an ex parte seizure application

       1
        We summarize the facts as alleged in Janssen’s
complaint.

                               4
under the DTSA, which provides that “the court may, upon ex
parte application but only in extraordinary circumstances, issue
an order providing for the seizure of property necessary to
prevent the propagation or dissemination of the trade secret
that is the subject of the action.” 18 U.S.C. § 1836(b)(2)(A)(i).

        In their ex parte application, Janssen asked the District
Court to seize eVenus’s network servers and stored data, the
laptops and cell phones of three current employees, and the
laptop of one former employee. They argued that they satisfied
all eight requirements for a DTSA ex parte seizure order. See
18 U.S.C. § 1836(b)(2)(A)(ii) (stating that the court cannot
grant an application unless it “finds that it clearly appears from
specific facts” that all enumerated requirements are satisfied).
Per the DTSA’s requirement that a federal law enforcement
officer carry out any seizure, Janssen proposed that the United
States Marshals seize the property. 18 U.S.C. § 1836(b)(2)(E).

       The District Court denied the ex parte seizure
application after concluding that Janssen failed to make an
adequate showing for five of the eight DTSA factors. It found
that Janssen had not shown that eVenus was in actual
possession of the property at issue, § 1836(b)(2)(A)(ii)(V), or
that eVenus’s property was present at the location of the
proposed seizure given questions about whether eVenus
occupied the space, § 1836(b)(2)(A)(ii)(VI). It also found an
insufficient showing of immediate and irreparable harm,
§ 1836(b)(2)(A)(ii)(II), or an immediate concern for spoliation,
§ 1836(b)(2)(A)(ii)(VII). Given that Janssen sought seizure of
property that would sweep in “all [eVenus’s] company
information,” “not limited in any way to the matters at issue in
this case,” the Court found that the balance of harm weighed
against granting the seizure. § 1836(b)(2)(A)(ii)(III).

                                5
       Janssen timely appealed.

                                II

       The District Court had jurisdiction under 28 U.S.C.
§§ 1331 & 1332(a) and 18 U.S.C. § 1836(c). The parties
dispute this Court’s jurisdiction. We always have jurisdiction
to determine our own jurisdiction, United States v. Kwasnik,
55 F.4th 212, 215 (3d Cir. 2022), and our review is plenary,
Ramara, Inc. v. Westfield Ins. Co., 814 F.3d 660, 665 (3d Cir.
2016).

                               III

       Janssen contends that we have jurisdiction under 28
U.S.C. § 1292(a)(1) to review the order denying their DTSA
ex parte seizure application. They argue that the District
Court’s order is immediately appealable because the denial of
a DTSA ex parte seizure is the denial of a functional injunction.
They also assert that we have jurisdiction over DTSA ex parte
seizure rulings for the same reasons that we have jurisdiction
over Trademark Counterfeiting Act of 1984, 15 U.S.C. § 1116,
(“Lanham Act”) ex parte seizure rulings. We are not persuaded
and conclude that we lack jurisdiction under § 1292(a)(1). And
because no other statute provides us jurisdiction, we will
dismiss this appeal.

                                A

       As a general rule, federal courts of appeals only have
jurisdiction to review final decisions of the district courts. See
Zurn Indus., LLC v. Allstate Ins. Co., 75 F.4th 321, 327 (3d Cir.
2023). Congress has created limited exceptions to this rule. Id.
One such exception is 28 U.S.C. § 1292(a)(1), which grants

                                6
courts of appeals jurisdiction to review non-final orders
“granting, continuing, modifying, refusing or dissolving
injunctions, or refusing to dissolve or modify injunctions.” We
construe § 1292(a)(1) narrowly so the exception does not
“swallow the final-judgment rule.” In re Pressman-Gutman
Co., 459 F.3d 383, 392 (3d Cir. 2006) (quoting Hershey Foods
Corp. v. Hershey Creamery Co., 945 F.2d 1272, 1276 (3d Cir.
1991)).

       Some orders are immediately appealable under
§ 1292(a)(1) even if they do not explicitly grant or deny
injunctions—that is, if they effectively do so. Carson v. Am.
Brands, Inc., 450 U.S. 79, 83–84 (1981). To determine
whether an order is effectively injunctive, we use a three-part
“functional test.” Ramara, 814 F.3d at 669–70. We ask
whether the order (1) is “directed to a party,” (2) may be
enforced by contempt, and (3) is “designed to accord or protect
some or all of the substantive relief sought by a complaint in
more than a [temporary] fashion.” Zurn, 75 F.4th at 326–27
(quoting Cohen v. Bd. of Trs. of Univ. of Med. & Dentistry of
N.J., 867 F.2d 1455, 1465 n.9 (3d Cir. 1989) (quotation marks
omitted)). Not every order that passes this three-part test is
immediately appealable. In some circumstances, the party
seeking to appeal the order must make two additional showings
(the “Carson factors”).2 But we do not reach the Carson

      2
         The additional showings are that the denial (1) works
a “serious, perhaps irreparable, consequence,” and (2) “can be
effectually challenged only by immediate appeal.” Saudi
Basic Indus. Corp. v. Exxon Corp., 364 F.3d 106, 111 (3d Cir.
2004) (quoting Carson, 450 U.S. at 84 (quotation marks
omitted)).

                              7
factors here because the District Court’s order fails the
functional test.

        An order (or, as here, a requested order) must satisfy all
three prongs of the functional test to be effectively injunctive.
But no DTSA seizure order can satisfy the first or the second
prong. Recall that the DTSA requires “law enforcement
officials” to “execut[e]” any ex parte seizure order. 18 U.S.C.
§ 1836(b)(2)(B)(iv). So any seizure order is necessarily
directed to law enforcement—not a party. See NutraSweet Co.
v. Vit-Mar Enters., Inc., 176 F.3d 151, 154 (3d Cir. 1999)
(holding that a writ of replevin is not a functional injunction
because it “was directed to the U.S. Marshals, not to a party to
the suit against whom the order could be enforced by threat of
contempt.”). And a party cannot be held in contempt for failing
to comply with an order that does not direct it to do or refrain
from doing anything. Santana Prods., Inc. v. Compression
Polymers, Inc., 8 F.3d 152, 155 (3d Cir. 1993). So the District
Court’s order did not effectively deny an injunction.

                                B

       Janssen also argues that we have jurisdiction over
DTSA ex parte seizure denials because in Vuitton v. White, 945
F.2d 569 (3d Cir. 1991), we held that we have jurisdiction over
Lanham Act ex parte seizure denials. We disagree. Our
decision in Vuitton was grounded in the text of the Lanham
Act, where Congress made plain that any ex parte seizure
orders granted under that statute are injunctions. Id. at 572.
But that ruling does not extend to the DTSA. The DTSA
contains no evidence that Congress considered its ex parte
seizure orders to be injunctions.

                                8
       In Vuitton, we reviewed 15 U.S.C. § 1116—the section
of the Lanham Act titled “Injunctive relief.” Vuitton, 945 F.2d
at 572. Subsection 1116(d) permits courts “upon ex parte
application, [to] grant an order under subsection (a) of this
section.” 15 U.S.C. § 1116(d)(1)(A). In turn, subsection
1116(a) grants courts “power to grant injunctions.” § 1116(a).
When we construed the text of § 1116(d) and 28 U.S.C.
§ 1292(a)(1) together, we concluded that Congress “viewed
§ 1116(d) seizure orders as a form of injunctive relief.”
Vuitton, 945 F.2d at 572; see also id. at 572–73 (concluding
that the Lanham Act’s legislative history supports our
interpretation of the text).

        Second, we asked whether an order resolving a Lanham
Act ex parte seizure application is more like an order resolving
an application for a temporary restraining order (i.e., not
immediately appealable) or more like an order resolving an
application for a preliminary injunction (i.e., immediately
appealable). We concluded that a grant of an ex parte seizure
application under the Lanham Act functions like a temporary
restraining order because Section 1116(d) requires a hearing
within 15 days. Id. at 573. But we held that the denial of such
an application functions like an order denying a preliminary
injunction because the order is a final resolution of the
application. Id. at 573–74.

        Third, we concluded that the district court’s denial of
the § 1116(d) seizure application in Vuitton satisfied both
Carson factors. Id. at 574. As a result, we held that the denial
of the seizure application was immediately appealable. Id.

                               9
       Janssen argues that our holding in Vuitton applies
equally to their case.3 But that argument falters at the first step
of the Vuitton analysis: a review of the statutory text. As
discussed above, the Lanham Act’s ex parte seizure provisions
are part of the “Injunctive relief” section of the Act, and the
statute permits district courts to grant ex parte seizure
applications under their “power to grant injunctions.” 15
U.S.C. §§ 1116, 1116(a). In contrast, the portion of the DTSA
governing ex parte seizure orders is separate from and does not
reference the portion of the DTSA governing injunctions.
Compare 18 U.S.C. § 1836(b)(2) (outlining procedures for
civil seizures) with § 1836(b)(3)(A) (describing the district
court’s ability to “grant an injunction” as a remedy for the
misappropriation of a trade secret). Unlike in the Lanham Act,
Congress did not provide a link between the DTSA’s civil
seizure provisions and its injunction provisions.

       And the DTSA’s text further distinguishes ex parte
seizure orders from injunctions. The statute permits district
courts to issue ex parte seizure orders only when “an order

       3
          In a subsequent Lanham Act case, we recounted that,
“[i]n Vuitton, we held that we have statutory appellate
jurisdiction under 28 U.S.C. § 1292(a)(1) over interlocutory
appeals from orders denying ex parte seizure.” Lorillard
Tobacco Co. v. Bisan Food Corp., 377 F.3d 313, 318 (3d Cir.
2004). To the extent that Janssen argues that this sentence in
Lorillard Tobacco applies to statutes other than the Lanham
Act, we reject that argument. Cf. Gross v. FBL Fin. Servs.,
Inc., 557 U.S. 167, 174 (2009) (“When conducting statutory
interpretation, we must be careful not to apply rules applicable
under one statute to a different statute without careful and
critical examination.”) (quotation and citation omitted).

                                10
issued pursuant to Rule 65 of the Federal Rules of Civil
Procedure or another form of equitable relief would be
inadequate . . . .” 18 U.S.C. § 1836(b)(2)(A)(ii)(I). Rule 65
regulates district courts’ authority to issue injunctions and
restraining orders. So the language of the DTSA shows that
Congress intended ex parte seizure orders to be distinct from
injunctions. Congress made no such distinction in the Lanham
Act. See 15 U.S.C. § 1116(d)(4)(B)(i) (requiring a district
court to find that “an order other than an ex parte seizure order
is not adequate to achieve the purposes of section 1114 of this
title”).

        The DTSA’s statutory context further demonstrates that
Congress did not intend courts of appeals to have jurisdiction
over DTSA ex parte seizure rulings. Congress enacted the
DTSA in 2016 as an amendment to the Economic Espionage
Act of 1996 (“EEA”), 18 U.S.C. § 1831 et seq. Statement by
the Press Secretary on S. 1890, 2016 WL 2731989, at *1 (“On
Wednesday, May 11, 2016, the President signed into law: S.
1890, the ‘Defend Trade Secrets Act of 2016,’ which amends
the Economic Espionage Act to allow private parties to seek
civil remedies in Federal court for trade secret
misappropriation.”). In the section of the EEA immediately
preceding the DTSA, Congress expressly provided the federal
courts of appeals with jurisdiction over “[a]n interlocutory
appeal by the United States . . . from a decision or order of a
district court authorizing or directing the disclosure of any
trade secret.” 18 U.S.C. § 1835(a). Congress’s express grant
of appellate jurisdiction over certain interlocutory appeals in
the same statutory scheme supports our conclusion that
Congress did not intend to confer jurisdiction over DTSA ex
parte seizure rulings. Cf. Russello v. United States, 464 U.S.
16, 23 (1983) (“Where Congress includes particular language

                               11
in one section of a statute but omits it in another section of the
same Act, it is generally presumed that Congress acts
intentionally and purposely in the disparate inclusion or
exclusion.”) (cleaned up).

       Lacking clear indication that Congress intended DTSA
ex parte seizure rulings to be immediately appealable, we hold
that we lack jurisdiction.

                              ***

       For the foregoing reasons, we will dismiss this appeal
for lack of jurisdiction.

                               12