Celsis in Vitro, Inc. v. CellzDirect, Inc.

United States Court of Appeals
for the Federal Circuit
__________________________

CELSIS IN VITRO, INC.,
Plaintiff-Appellee,
v.
CELLZDIRECT, INC., AND
INVITROGEN CORPORATION,
Defendants-Appellants.
__________________________

2010-1547
__________________________

Appeal from the United States District Court for the
Northern District of Illinois in Case No. 10-CV-4053,
Judge Milton I. Shadur
___________________________

Decided: January 9, 2012
___________________________

ADAM G. KELLY, Loeb & Loeb, LLP, of Chicago, Illinois
argued for plaintiff-appellee. With him on the brief was
JORDAN A. SIGALE. Of counsel was JULIE L. LANGDON.

FRANCIS M. WIKSTROM, Parsons Behle & Latimer, of
Salt Lake City, Utah, argued for defendants-appellants.
With him on the brief were DAVID G. MANGUM, C. KEVIN
SPEIRS and MICHAEL R. MCCARTHY.
__________________________
CELSIS IN VITRO v. CELLZDIRECT 2

Before RADER, Chief Judge, GAJARSA, and PROST, Circuit
Judges.
Opinion for the court filed by Chief Judge RADER. Dis-
senting opinion filed by Circuit Judge GAJARSA.
RADER, Chief Judge.
The United States District Court for the Northern
District of Illinois granted Celsis In Vitro, Inc.’s (“Celsis”)
motion for a preliminary injunction against CellzDirect,
Inc. and Invitrogen Corporation, now Life Technologies
Corporation (“LTC”). Based on the record, the district
court did not abuse its discretion. This court affirms.
I.
Celsis is the assignee of U.S. Patent No. 7,604,929
(filed Apr. 21, 2005) (“the ’929 patent”), which claims
methods for preparing multi-cryopreserved hepatocytes (a
type of liver cell). Claims 1 and 10 of the ’929 patent are
on appeal:
1. A method of producing a desired preparation
of multi-cryopreserved hepatocytes, said hepa-
tocytes, being capable of being frozen and
thawed at least two times, and in which
greater than 70% of the hepatocytes of said
preparation are viable after the final thaw,
said method comprising:
(A) subjecting hepatocytes that have been
frozen and thawed to density gradient
fractionation to separate viable hepato-
cytes from non-viable hepatocytes,
(B) recovering the separated viable hepato-
cytes, and
(C) cryopreserving the recovered viable hepa-
tocytes to thereby form said desired
3 CELSIS IN VITRO v. CELLZDIRECT

preparation of hepatocytes without requir-
ing a density gradient step after thawing
the hepatocytes for the second time,
wherein the hepatocytes are not plated
between the first and second cryopreser-
vations, and wherein greater than 70% of
the hepatocytes of said preparation are
viable after the final thaw.
10. A method of investigating in vitro drug me-
tabolism comprising incubating hepatocytes of
a multi-cryopreserved hepatocyte preparation
in the presence of a xenobiotic, and determin-
ing the metabolic fate of the xenobiotic, or the
affect of the xenobiotic on the hepatocytes or
on an enzyme or metabolic activity thereof,
wherein the hepatocytes have been frozen and
thawed at least two times, and wherein
greater than 70% of the hepatocytes of said
preparation are viable without requiring a
density gradient step after thawing the hepa-
tocytes for the second time, wherein the hepa-
tocytes are not plated between the first and
second cryopreservations.
’929 patent col.19 l.56 – col.20 l.19, ll.49-59 (emphasis
added to the disputed claim terms).
The specification of the ’929 patent explains that hu-
man hepatocytes are a useful laboratory model for evalu-
ating drug candidates. Two problems, however, have
limited their use. First, hepatocytes have a short lifespan
which causes an inconsistent and limited supply. Specifi-
cally, the only sources of fresh hepatocytes are liver
resections or non-transplantable livers of multi-organ
donors. Due to this reliance on liver donation, fresh
hepatocytes become available at unpredictable times.
CELSIS IN VITRO v. CELLZDIRECT 4

Researchers must wait until a liver donation and must
often resume or begin research with little advance warn-
ing. This unpredictability hinders laboratory studies,
which usually require a consistent source of supplies.
This supply problem also limits research geographically to
the region near the liver donor.
To obtain a more consistent supply, scientists sought
techniques for long-term storage of hepatocytes in the
laboratory. The option of cryopreservation (freezing) did
not work well because freezing extensively damages
hepatocyte cells. Hepatocytes are extremely fragile and,
once damaged, do not recover. Thus, even a single in-
stance of cryopreservation can jeopardize the need for a
sufficient level of viable hepatocytes. For this reason,
experts in this field met initial attempts to freeze hepato-
cytes with skepticism.
The second problem is outlier data. If a researcher
uses hepatocytes from only one or two donors, the results
may not be representative of the larger population. To
avoid this, the researcher needs a pool of hepatocytes from
a larger group of different liver donors to minimize the
effect of outliers. Once again, the unpredictability of liver
donations jeopardizes the effort to accumulate a represen-
tative pool of hepatocytes. Of course, multiple liver
donations are unlikely to occur at the same time. There-
fore, the researcher must rely on preserving hepatocytes
to accumulate a pool. Specifically, the researcher must
combine frozen hepatocytes with fresh hepatocytes to
create a pool. Because the pool must be used immedi-
ately, any unused cells are discarded; otherwise, re-
freezing would freeze the thawed cells a second time.
Thus, preservation methods severely limit, or even pre-
clude, pooled hepatocyte products.
5 CELSIS IN VITRO v. CELLZDIRECT

The ’929 patent intends to solve these problems while
retaining substantial hepatocyte cell viability through a
method of multi-cryopreserving hepatocyte cells. Celsis
developed its LiverPool™ pooled multi-cryopreserved
hepatocyte products, which it asserts are covered by the
’929 patent. LTC also sells pooled multi-cryopreserved
hepatocyte products, which Celsis alleges involve perform-
ing a process infringing the ’929 patent (“the accused
process”). For confidentiality reasons, this decision does
not give the details of the accused process.
In June 2010, Celsis sued LTC for infringement of the
’929 patent. Celsis moved for a preliminary injunction.
After a month of discovery, the district court conducted a
five-day evidentiary hearing. The district court, upon
consideration of the testimony and written submissions,
ruled from the bench and granted Celsis a preliminary
injunction. LTC moved for a stay pending appeal, which
the district court denied.
LTC appealed the district court’s grant of a prelimi-
nary injunction. It moved for a stay pending appeal,
which this court denied in Celsis In Vitro, Inc. v. CellzDi-
rect, Inc., No. 2010-1547, 2010 WL 5080944 (Fed. Cir.
Dec. 8, 2010). This court has jurisdiction under 28 U.S.C.
§ 1292(c)(1).
II.
This court reviews a district court’s decision to grant a
motion for preliminary injunction for an abuse of discre-
tion. Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1345
(Fed. Cir. 2008). To constitute an abuse of discretion, a
district court decision must either make a clear error of
judgment in weighing relevant factors or exercise discre-
tion based upon an error of law. Id.
CELSIS IN VITRO v. CELLZDIRECT 6

The district court analyzes four factors when consider-
ing a preliminary injunction: (1) likelihood of success on
the merits, (2) irreparable harm, (3) balance of hardships,
and (4) public interest. Id. at 1344.
III.
The district court found that Celsis had shown a like-
lihood of success on the merits. The district court also
considered LTC’s defenses: non-infringement, obvious-
ness, written description, and inequitable conduct. LTC
has chosen to appeal only the first two.
As to infringement, the district court weighed the tes-
timony of Celsis’ expert Dr. Steven C. Strom against the
testimony of LTC’s marketing director Markus J.
Hunkeler. The district court found Dr. Strom’s testimony
to be helpful in carefully explaining how LTC’s accused
process meets all the limitations of the asserted claims.
In contrast, the district court found that Mr. Hunkeler
“really didn’t offer anything in the way of opinions to
address the proper interpretation of the patent’s claims.”
Preliminary Injunction Hr’g Tr. 4:10-12, Sept. 7, 2010.
Thus, the district court found that Celsis is likely to
succeed in proving that LTC’s accused process performs
all the steps in the asserted claims. First, Dr. Strom gave
testimony on the proper reading of the term “density
gradient fractionation” in step (A) of claim 1. Then, he
applied that term to the accused process. He testified
that the accused process performs a density separation
that satisfies the “density gradient fractionation” in step
(A), because it separates viable from nonviable hepato-
cytes by density. Though Mr. Hunkeler testified that the
accused process performs an “isodensity” separation that
does not create a gradient, the district court found Celsis’
expert Dr. Strom’s testimony more persuasive.
7 CELSIS IN VITRO v. CELLZDIRECT

Second, with that claim construction in place, LTC as-
serted an alternative non-infringement defense based on
step (C). LTC presented documents showing that the
accused process performs the same density separation
after the first thaw (step A) and the second thaw (step C)
only in a different medium. In contrast to step (A), step
(C) includes the language “without requiring a density
gradient step.” ’929 patent col.20 l.15, ll.57-58 (emphasis
added). LTC reads “without requiring” to mean “prohibit-
ing,” such that the accused process performs an action
“prohibited” by step (C) and therefore does not infringe.
LTC made the same argument about claim 10.
The district court found this argument to be “hokum”
and an improper attempt to insert a limitation not in the
claims. Hr’g Tr. 5:13. In finding for Celsis, the district
court adopted Dr. Strom’s expert testimony by reference
to Celsis’ post-hearing briefing. The district court con-
cluded: “In sum, it is an understatement to say that Celsis
has shown substantially more than a reasonable likeli-
hood of success on the subject of infringement.” Hr’g Tr.
7:3-5.
This record shows that the district court did not abuse
its discretion in finding a likelihood of success on in-
fringement. LTC errs in reading “without requiring” to
mean “prohibiting.” The claim language is not susceptible
to this unnatural reading. Instead, “without requiring”
means simply that the claim does not require the density
gradient step. Thus, performance of that step does not
preclude a finding of infringement. For that reason, this
court need not reach LTC’s subsequent argument concern-
ing performance of the “density gradient step” in step (C).
This court also declines to reach the joint infringement
issue that LTC raised for the first time at oral argument.
See Henry v. DOJ, 157 F.3d 863, 865 (Fed. Cir. 1998) (not
considering an argument raised for the first time at oral
CELSIS IN VITRO v. CELLZDIRECT 8

argument); Darwin Constr. Co. v. United States, 811 F.2d
593, 596 n.1 (Fed. Cir. 1987) (same).
As to non-obviousness, the district court reviewed the
testimony and submissions of Celsis and LTC’s fact and
expert witnesses. It noted the “vast proliferation of
authors and articles dealing with hepatocytes and use of
cryopreservation.” Hr’g Tr. 7:15-17. But, the district
court found: “[N]ot a single one of that astonishingly large
body of literature was devoted to the subject of multi-
cryopreservation of hepatocytes.” Hr’g Tr. 7:19-22 (“I
have properly laid stress on ‘multi.’”).
The district court rejected LTC’s attempt to fill that
gap. LTC’s expert Dr. Sanjeev Gupta opined that the only
reference to multi-cryopreservation in the prior art is an
article in 2002 that he co-authored (“the Malhi article”).
See Harmeet Malhi et al., Isolation of human progenitor
liver epithelial cells with extensive replication capacity
and differentiation into mature hepatocytes, 115 (13)
Journal of Cell Science 2679 (2002). The Malhi article
discusses fetal hepatocytes as experiment models because
they can replicate in laboratory conditions (unlike mature
or adult hepatocytes). The essence of the article was not
to introduce a new method or advance in cryopreservation
but instead to focus on the advantages of using fetal
hepatocytes due to their replication abilities. The Malhi
article does report on the “poor viability of hepatocytes
after cryopreservation.”
The district court found Dr. Gupta’s testimony unper-
suasive and, as to the Malhi article, found that “nothing
in that skeletal reference suggests or even hints at the
advance conceived of by the inventor here.” Hr’g Tr. 8:14-
15. The district court instead credited Celsis’ expert Dr.
Strom who testified that due to the independent replica-
tion of the fetal hepatocytes, it could not be definitively
9 CELSIS IN VITRO v. CELLZDIRECT

determined whether the same cells were cryopreserved
more than once. Dr. Gupta also conceded this same point.
The district court found that LTC was attempting to
make much of “a wisp of a term that is buried in the
Malhi article.” Hr’g Tr. 8:2-3. It deemed LTC’s argu-
ments to be nothing more than “second guessing and
hindsight.” Hr’g Tr. 8:17-18. The district court concluded
that “again Celsis has demonstrated more than a sub-
stantial likelihood of success on the issue.” Hr’g Tr. 10:8-
9.
The issue on appeal is whether the district court erred
in finding Celsis likely to succeed on non-obviousness in
view of G. de Sousa et al., Increase of cytochrome P-450 1A
and glutathione transferase transcripts in cultured hepa-
tocytes from dogs, monkeys, and humans after cryopreser-
vation, 12 Cell Biology and Toxicology 351 (1996) (“the de
Sousa article”). On appeal, LTC does not assert its obvi-
ousness argument based on the Malhi article, despite
LTC’s own expert Dr. Gupta opining that Malhi was the
only reference in the prior art that allegedly disclosed
multi-cryopreservation. Instead of disclosing multi-
cryopreservation, the de Sousa article analyzes whether
single-cryopreserved hepatocytes can replace fresh hepa-
tocytes as laboratory models, by comparing fresh versus
(single) cryopreserved human, monkey, and dog hepato-
cytes. Specifically, while previous studies determined the
effect of single cryopreservation on fresh hepatocytes by
evaluating differences in cell viability, cell attachment,
and protein synthesis, the aim of this article was to
evaluate whether three different chemicals could induce
(i.e. increase activity of) two different enzymes.
Under 35 U.S.C. § 103, a patent claim is invalid “if the
differences between the subject matter sought to be
patented and the prior art are such that the subject
matter as a whole would have been obvious at the time
CELSIS IN VITRO v. CELLZDIRECT 10

the invention was made to a person having ordinary skill
in the art.” The obviousness analysis is based on underly-
ing factual inquiries including: (1) the scope and content
of the prior art; (2) the level of ordinary skill in the art; (3)
the differences between the claimed invention and the
prior art; and (4) objective evidence of nonobviousness.
Eli Lilly & Co. v. Teva Pharm. USA, Inc., 619 F.3d 1329,
1336 (Fed. Cir. 2010).
This preliminary record shows that the district court
did not abuse its discretion in finding that Celsis has
shown a likelihood of success on nonobviousness. LTC
will have an opportunity at the merits stage to expand
upon the arguments it made at the preliminary injunction
stage. The record as it now stands, however, reveals no
clear error by the district court. And this court does not
opine on the final determination, which lays in the realm
of the district court in the first instance.
As an initial matter, this court acknowledges that the
present invention is in an art well-known for its unpre-
dictability. As to the scope and content of the prior art,
the district court correctly emphasized and found based
on the preliminary record that the art was a crowded field
for many years and yet there was not one reference to
multi-cryopreservation. Moreover, the record shows that
the prior art taught away from multiple freezings. A
single round of freezing severely damages hepatocyte cells
and results in lower cell viability. Celsis provided a
sufficient showing at this preliminary injunction stage
that, at the time of the invention, a person of ordinary
skill would expect a second freezing on those damaged
cells to kill even more cells than the first freezing. Celsis
provides a helpful analogy. Imagine a runner who fin-
ishes one marathon and then immediately begins a sec-
ond marathon. One would not expect the runner to
perform the second in the same time as the first. More
11 CELSIS IN VITRO v. CELLZDIRECT

likely, the runner would not even finish the second mara-
thon. Similarly, as Celsis’ expert Dr. Strom testified, one
would expect lower cell viability and a greater loss of cells
after the second cryopreservation than after the first, thus
teaching away from multi-cryopreservation.
With respect to the de Sousa article, this court sees no
error in the district court’s reliance on Dr. Strom’s testi-
mony that de Sousa does not describe or suggest more
than one round of freezing, nor does it describe or suggest
pooling. Instead, de Sousa only discloses a single cryopre-
servation. Even LTC’s expert Dr. Gupta did not testify
that de Sousa discloses multi-cryopreservation. This
court has not seen LTC identify any teaching, suggestion,
or motivation in the de Sousa article that multiple rounds
of freezing would somehow increase rather than decrease
cell viability. Instead, to make this leap, LTC makes
vague references to “market need” and testimony from its
witnesses Dr. Gupta and Dr. Albert Li. Without more,
this reference to “market need,” properly linked to the
claimed invention, is actually probative of long felt need
under objective criteria analysis and supportive of non-
obviousness.
Dr. Gupta opined on a “more resistance” theory, and
Dr. Li opined on a “mathematical calculation” theory.
Specifically, Dr. Gupta (opining specifically on the de
Sousa article) claimed that cells that survived the first
freeze would be “more resistant” and therefore more likely
to survive a second freeze. Dr. Li (opining generally, not
specifically on the de Sousa article) claimed that the same
number of cells that survived the first freeze would sur-
vive the second freeze. The de Sousa article does not
disclose either of these hindsight theories.
The district court did not find the testimony of LTC’s
experts Dr. Gupta and Dr. Li credible. The district court
CELSIS IN VITRO v. CELLZDIRECT 12

has wide discretion to weigh expert credibility. Conoco,
Inc. v. Energy & Envtl. Int’l, L.C., 460 F.3d 1349, 1362-63
(Fed. Cir. 2006) (“As for the relative weight given to the
testimony of both sides’ expert witnesses, we accord the
trial court broad discretion in determining credibility
because the court saw the witnesses and heard their
testimony.”) (quoting Energy Capital Corp. v. United
States, 302 F.3d 1314, 1329 (Fed. Cir. 2002)); Bristol-
Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d
1226, 1236 (Fed. Cir. 2003) (“Moreover, the district court
did not find convincing or credible the opinion of RPR’s
expert . . . . [T]he district court is best suited to make
credibility determinations, and we accord such determina-
tions deference.”) (citing Refac Int’l, Ltd. v. Lotus Dev.
Corp., 81 F.3d 1576, 1582 (Fed. Cir. 1996)). This court
defers to such credibility determinations. Nilssen v.
Osram Sylvania, Inc., 504 F.3d 1223, 1231-32 (Fed. Cir.
2007) (“While an opposite conclusion could have been
reached, it is not the function of a court of appeals to
override district court judgments on close issues, where
credibility findings have been made.”); Agfa Corp. v. Creo
Prods. Inc., 451 F.3d 1366, 1379 (Fed. Cir. 2006) (“This
court must defer heavily to the trial court’s credibility
determinations. . . . Credibility determinations by the
trial judge can virtually never be clear error.”) (quoting
JVW Enters., Inc. v. Interact Accessories, Inc., 424 F.3d
1324, 1334 (Fed. Cir. 2005)). Thus, these determinations
of credibility also buttress the record for nonobviousness.
Here, the district court found that the LTC expert’s
“revisionist history is unpersuasive.” Hr’g Tr. 10:7-8; see
also Hr’g Tr. 7:11-13 (“Instead of a more candid ‘Why
didn’t I think of that,’ we get [LTC arguing] ‘Anybody
reasonably skilled in the art would have thought of
that.’”). Not one of LTC’s experts testified to actually
performing the claimed process or documenting their
13 CELSIS IN VITRO v. CELLZDIRECT

alleged understanding before the time of the invention,
despite having the financial, scientific, and professional
incentive to do so. The district court found that LTC’s
experts did not predict the results of the claimed methods
at the time of the invention, nor could they find any
reference in the prior art suggesting that any other scien-
tist had. Hr’g Tr. 7:23-8:1 (“That was not the subject of
numerous articles authored or assembled by Dr. Li or Dr.
Gupta or by any of the other scientists who participated
in the consortium about which Dr. Li testified, or for that
matter by anybody else.”). Accordingly, in this prelimi-
nary injunction context, this court determines that the
district court did not clearly err in finding a person of
ordinary skill in the art likely would not have found the
invention obvious either.
In sum, the record supports the district court’s conclu-
sion that Celsis has shown a likelihood of success that a
person of ordinary skill in the art would not have consid-
ered the claimed methods obvious at the time of the
invention.
IV.
The district court found that Celsis would suffer ir-
reparable harm absent a preliminary injunction. As the
district court recognized, the simple fact that one could, if
pressed, compute a money damages award does not
always preclude a finding of irreparable harm. As its
name implies, the irreparable harm inquiry seeks to
measure harms that no damages payment, however great,
could address. See Altana Pharma AG v. Teva Pharm.
USA, Inc., 566 F.3d 999, 1010 (Fed. Cir. 2009); see also
Sampson v. Murray, 415 U.S. 61, 90 (1974) (“The key
word in this consideration is irreparable. Mere injuries,
however substantial, in terms of money, time and energy
necessarily expended in the absence of a stay, are not
CELSIS IN VITRO v. CELLZDIRECT 14

enough.”) (quoting Va. Petroleum Jobbers Ass’n v. Fed.
Power Comm’n, 259 F.2d 921, 925 (D.C. Cir. 1958)). The
district court found that the permanent, irreparable harm
to Celsis would include price erosion, damage to ongoing
customer relationships, loss of customer goodwill (e.g.,
when an effort is later made to restore the original price),
and loss of business opportunities. As the district court
explained: “There is no effective way to measure the loss
of sales or potential growth – to ascertain the people who
do not knock on the door or to identify the specific persons
who do not reorder because of the existence of the in-
fringer.” Hr’g Tr. 16:25-17:4.
Based on the record before the district court, this
court sees no error in the district court’s finding that
Celsis would suffer irreparable harm absent a prelimi-
nary injunction. Price erosion, loss of goodwill, damage to
reputation, and loss of business opportunities are all valid
grounds for finding irreparable harm. Abbott Labs. v.
Sandoz, Inc., 544 F.3d 1341, 1362 (Fed. Cir. 2008); Sanofi-
Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1382-83 (Fed.
Cir. 2006). Thus, contrary to LTC’s assertions, the dis-
trict court did not err as a matter of law in relying on such
evidence. Further, the mere possibility of future mone-
tary damages does not defeat a motion for preliminary
injunction. See Abbott Labs., 544 F.3d at 1361-62; Sanofi-
Synthelabo, 470 F.3d at 1382.
Celsis offered testimony from its expert Mark Peter-
son on irreparable harm. In contrast, LTC did not offer
expert testimony in rebuttal. This court sees no error in
the district court’s reliance on Celsis’ unrebutted expert
testimony. To substantiate its claims, Celsis presented
fact and expert testimony as well as specific financial
records. Celsis presented evidence of LTC’s significantly
discounted prices as well as specific instances when
customers purchased from LTC instead of Celsis. The
15 CELSIS IN VITRO v. CELLZDIRECT

record also shows that Celsis had a general no-discount
policy to maintain its premium product pricing that it was
forced to break in order to compete with LTC. The record
included evidence that the LiverPool™ products are
Celsis’ flagship products and that the products are in
their growth phase and will soon be entering the mature
phase with the highest revenues and strongest market
position. The record also included testimony that this
market was particularly sensitive because customers buy
in bulk and at irregular times, such that the loss of a
single sale in this market may be more harmful than for
products purchased daily.
Then, Celsis proffered expert testimony on the dam-
age to Celsis’ price, reputation, and business opportuni-
ties. Mr. Peterson testified to the irreversible price
erosion. He also testified to the difficulty in quantifying
the effect on reputation and business due to Celsis being
precluded from marketing to potential and existing cus-
tomers that it is the exclusive market leader. During the
growth stage of a product, it is particularly crucial to be
able to distinguish oneself from competitors. This in-
cludes building the brand, expanding the customer base,
and establishing one’s reputation and leadership in the
market.
This court declines to reach LTC’s new argument that
these effects can be quantifiable in this case because this
is supposedly a two-competitor market and such harms
are allegedly not irreparable in such a market. LTC chose
not to properly raise this before the district court. The
general rule is that this court does not consider argu-
ments not raised below. See Singleton v. Wulff, 428 U.S.
106, 120 (1976). This court finds no reason to disregard
that rule here.
CELSIS IN VITRO v. CELLZDIRECT 16

In light of the unrebutted expert testimony, this court
finds no reason to reverse the district court’s weighing of
evidence and fact finding that Celsis would suffer irrepa-
rable harm absent a preliminary injunction.
V.
The district court concluded that “plainly the balanc-
ing of harms tilts heavily in Celsis’s favor.” Hr’g Tr.
17:11-12. This preliminary injunction factor is also af-
fected by LTC’s decision not to present expert testimony
to rebut Celsis’ expert testimony. The district court found
that any asserted harm to LTC was “of lesser scope” than
the harm to Celsis and also “protectable by a bond.” Hr’g
Tr. 17:9-11 (citing PPG Indus., Inc. v. Guardian Indus.
Corp., 75 F.3d 1558 (Fed. Cir. 1996)).
The district court did not clearly err in finding the
balancing of harms favors Celsis. Absent a preliminary
injunction, Celsis would lose the value of its patent as
well as suffer the irreparable harms opined on by its
expert. The losses alleged by LTC upon a preliminary
injunction (loss of goodwill and reputation) would also be
incurred by Celsis absent a preliminary injunction.
Moreover, the record shows that the district court prop-
erly considered LTC’s interest in fulfilling its current
contract obligations. See PPG Indus., Inc., 75 F.3d at
1567. In fact, the district court allowed LTC to complete
some sales. This court sees no clear error in the district
court rejecting the LTC witness Mr. Hunkeler’s claims
that it would have to shut down operations upon a pre-
liminary injunction. Further, the preliminary record
suggests that LTC’s losses were the result of its own
calculated risk in selling a product with knowledge of
Celsis’ patent. See Sanofi-Synthelabo v. Apotex, Inc., 470
F.3d 1368, 1383 (Fed. Cir. 2006).
17 CELSIS IN VITRO v. CELLZDIRECT

As to the bond, this court sees no abuse of discretion
in the district court’s bond amount. See Sanofi-
Synthelabo, 470 F.3d at 1386 (“The amount of a bond is a
determination that rests within the sound discretion of a
trial court.”). LTC argues that the bond is inadequate.
But, the district court invited LTC to present additional
evidence to substantiate a higher bond. LTC presented no
such evidence.
VI.
The district court found that Celsis had carried its
burden to prove that the public interest would favor a
preliminary injunction. This court sees no error in the
district court’s conclusion. The public interest favors the
enforcement of Celsis’ patent rights here. See Sanofi-
Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1383 (Fed. Cir.
2006) (“We have long acknowledged the importance of the
patent system in encouraging innovation.”). Such in-
vestment in drug research and development must be
encouraged and protected by the exclusionary rights
conveyed in valid patents. See Abbott Labs. v. Sandoz,
Inc., 544 F.3d 1341, 1362-63 (Fed. Cir. 2008). That incen-
tive would be adversely affected by taking market benefits
away from the patentee and giving them to the accused
infringer in this case. See id. Though LTC argues that it
sells products for drug research and development such
that the public interest would disfavor enjoining LTC,
both LTC and Celsis sell the same products and are in
direct competition. In other words, the public can obtain
the products from Celsis. The record shows that the
district court has considered and properly addressed the
public’s interest in obtaining an adequate supply of pooled
multi-cryopreserved hepatocyte products. See PPG In-
dus., Inc., 75 F.3d at 1567.
VII.
CELSIS IN VITRO v. CELLZDIRECT 18

The district court found that all four preliminary in-
junction factors favor Celsis. This court sees no reversible
error in the district court’s findings. Based on this record,
the district court did not abuse its discretion in granting
the motion for preliminary injunction. This court there-
fore affirms.
VIII.
This court declines to review LTC’s new argument
that the scope of the preliminary injunction is overbroad,
in terms of geography and time. See Singleton v. Wulff,
428 U.S. 106, 120 (1976). LTC did not raise this objection
before the district court. Nor did it offer alternative forms
to the injunction before the district court.
AFFIRMED.
 United States Court of Appeals
for the Federal Circuit
__________________________

CELSIS IN VITRO, INC.,
Plaintiff-Appellee,
v.
CELLZDIRECT, INC., AND
INVITROGEN CORPORATION
Defendants-Appellants.
__________________________

2010-1547
__________________________

Appeal from the United States District Court for the
Northern District of Illinois in Case No. 10-CV-4053,
Judge Milton I. Shadur.
__________________________

GAJARSA, Circuit Judge, dissenting.
I respectfully dissent from the majority’s decision to
uphold the “extraordinary and drastic remedy” of a pre-
liminary injunction because, in my judgment, Cellzdirect,
Inc. and Invitrogen Corporation (collectively, “LTC”)
raised a substantial question as to the validity of U.S.
Patent No. 7,604,929 (the “’929 patent”). The grant or
denial of a preliminary injunction is within the broad
discretion of the district court. In this case, however, the
district court committed legal error in granting the pre-
liminary injunction. The district court’s obviousness
analysis was legally deficient, and it erroneously held
CELSIS IN VITRO v. CELLZDIRECT 2

LTC to a clear and convincing standard of proof regarding
the ’929 patent’s invalidity. By affirming the injunction,
the majority perpetuates these errors and reinvigorates
the pre-KSR standard for obviousness, rigidly requiring
an explicit teaching, suggestion, or motivation for multi-
cryopreserving hepatocytes. Majority Op. at 11.
I.
Claim 1 of the ‘929 patent reads as follows:
A method of producing a desired preparation of
multi-cryopreserved hepatocytes, said hepato-
cytes, being capable of being frozen and thawed at
least two times, and in which greater than 70% of
the hepatocytes of said preparation are viable af-
ter the final thaw, said method comprising: (A)
subjecting hepatocytes that have been frozen and
thawed to density gradient fractionation to sepa-
rate viable hepatocytes from non-viable hepato-
cytes, (B) recovering the separated viable
hepatocytes, and (C) cryopreserving the recovered
viable hepatocytes to thereby form said desired
preparation of hepatocytes without requiring a
density gradient step after thawing the hepato-
cytes for the second time, wherein the hepatocytes
are not plated between the first and second cryo-
preservations, and wherein greater than 70% of
the hepatocytes of said preparation are viable af-
ter the final thaw.
’929 patent col.19 l.56-col.20 l.20. The district court held
that LTC had not proven that its obviousness defense had
substantial merit because two limitations of the claimed
invention were not present in the prior art: freezing and
thawing hepatocytes a second time and making the den-
sity gradient fractionation optional after the second thaw.
3 CELSIS IN VITRO v. CELLZDIRECT

Celsis In Vitro, Inc. v. Cellzdirect, Inc., Case No. 10-cv-
4053, Dkt. No. 94 (Sept. 7, 2010).
Yet obviousness does not require that each element of
the claimed invention must be present in the prior art.
Indeed, the Patent Act precludes such a requirement by
stating that obviousness depends on whether the “differ-
ences between the subject matter sought to be patented and
the prior art are such that the subject matter as a whole
would have been obvious at the time the invention was
made to a person having ordinary skill in the art . . . .” 35
U.S.C. § 103(a) (2006) (emphasis added). Furthermore,
this court has recognized that proof of obviousness does
not require that every element be present in the prior art.
See Tegal Corp. v. Tokyo Electron Am., Inc., 257 F.3d
1331, 1349 (Fed. Cir. 2001) (acknowledging that the
claimed invention could be obvious even if prior art did
not teach one of its elements).
Moreover, all of the claimed elements were present in
the prior art. Properly interpreted, the claimed invention
requires three steps: (1) thawing cryopreserved hepato-
cytes; (2) using density gradient fractionation to separate
viable and non-viable cells; and (3) refreezing and rethaw-
ing the hepatocytes. Both cryopreservation and density
gradient fractionation were well known in the art at the
time of the invention. See ’929 patent col.2 ll.41-54 (list-
ing prior art references relating to cryopreservation); J.A.
2981 (Celsis Invitro, Inc.’s (“Celsis”) expert Dr. Strom
testified that use of density gradient fractionation to
“enhance viability” of cells is “well-established to everyone
in th[e] field.”). The last “step” of the claimed invention
requires nothing more than measuring the viability of
cells thawed for a second time. If the cells have more
than 70% viability, they meet this limitation; if they do
not have 70% viability, they do not meet this limitation.
CELSIS IN VITRO v. CELLZDIRECT 4

In other words, Celsis’ invention uses two known
techniques, repeats them, and happens to obtain 70
percent viability of hepatocytes. This “invention” is a
“patent for a combination which only unites old elements
with no change in their respective functions [and] obvi-
ously withdraws what already is known into the field of
its monopoly,” Great Atl. & Pac. Tea Co. v. Supermarket
Equip. Corp., 340 U.S. 147, 152-153 (1950), which is a
“principal reason” for finding a patent obvious. KSR Int’l.
Co. v. Teleflex Inc., 550 U.S. 398, 416 (2007). Repeating
known steps to obtain a desired result is not inventive.
Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324,
1330-31 (Fed. Cir. 2009) (finding obvious a claimed inven-
tion that required performance of three steps known in
the prior art, followed by repetition of those steps until a
desired result was obtained).
The majority attempts to complicate the simplicity of
the claimed invention by asserting that the art was un-
predictable while simultaneously asserting that a person
of ordinary skill in the art would have predicted low
viability of hepatocytes that had been frozen and thawed
twice. See Majority Op. at 10-11. The majority cannot
have it both ways. To the extent the art was unpredict-
able—an issue on which the district court was silent—this
alone does not require a holding that the invention is not
obvious. See Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348,
1364 (Fed. Cir. 2007) (“[O]bviousness cannot be avoided
simply by a showing of some degree of unpredictability in
the art so long as there was a reasonable probability of
success.”).
The majority also faults LTC for failing to point out
an explicit teaching, suggestion, or motivation to multi-
5 CELSIS IN VITRO v. CELLZDIRECT

cryopreserve hepatocytes. 1 Majority Op. at 11. This is
directly contrary to the Supreme Court’s opinion in KSR,
which the majority fails to recognize. KSR explicitly
rejected the rigid application of the teaching-suggestion-
motivation test, explaining that “the analysis need not
seek out precise teachings directed to the specific subject
matter of the challenged claim, for a court can take ac-
count of the inferences and creative steps that a person of
ordinary skill in the art would employ.” 550 U.S. at 418.
The majority fails to follow KSR’s mandate in deciding
that LTC’s obviousness defense lacked substantial merit.
Under the flexible approach of KSR, there is a sub-
stantial question of obviousness concerning the ’929
patent. The patent spells out clearly—as does Celsis’
brief—that there was a need in the art to multi-
cryopreserve hepatocytes. The basic approach to deter-
mine whether hepatocytes could be frozen multiple times
and remain viable was simply to pursue it. Celsis did and
found that the hepatocytes were viable. This process is
not entitled to be deemed an invention. See KSR, 550
U.S. at 421 (“When there is a design need or market
pressure to solve a problem and there are a finite number
of identified, predictable solutions, a person of ordinary
skill in the art has good reason to pursue the known
options within his or her technical grasp,” the invention is
likely obvious.); see also Wyers v. Master Lock Co., 616
F.3d 1231, 1239 (Fed. Cir. 2010) (“KSR and our later
cases establish that the legal determination of obvious-
ness may include recourse to logic, judgment, and com-

1 The majority also claims that the failure of LTC’s
experts to practice the claimed invention weighs against
obviousness. Of course, had LTC’s experts actually prac-
ticed the claimed invention, it would be anticipated, not
obvious. By failing to appreciate this distinction the
majority continues to compound the error.
CELSIS IN VITRO v. CELLZDIRECT 6

mon sense, in lieu of expert testimony.” (citations omit-
ted)). I would thus vacate the district court’s grant of a
preliminary injunction.
II.
The district court also erred in failing to appreciate
that to avoid a preliminary injunction, LTC needed only
to offer proof that the ’929 patent was vulnerable, as
opposed to clear and convincing evidence of its invalidity.
As the patentee, Celsis bears the burden of proving that
“in light of the presumptions and burdens that will inhere
at trial on the merits,” the ’929 patent will withstand
LTC’s challenges to its validity. See Amazon.com, Inc. v.
Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir.
2001). Thus, if LTC raises a substantial question as to
the ’929 patent’s validity, the preliminary injunction
should not issue. Id. at 1350-51. See also Genentech, Inc.
v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed. Cir.
1997) (“[W]ith regard to [the alleged infringer’s] validity
defenses, the question on appeal is whether there is
substantial merit to [its] assertion that the . . . patent
claim [is invalid].”); Kimberly-Clark Worldwide, Inc. v.
First Quality Baby Products, LLC, 431 Fed.Appx. 884,
886-7 (Fed. Cir. 2011) (Prost, J.) (nonprecedential opinion)
(stating the same and that “[v]ulnerability is the issue at
the preliminary injunction stage, while validity is the
issue at trial”) (citations omitted).
Importantly, it is unnecessary to prove a substantial
question of invalidity by clear and convincing evidence.
Rather, the party challenging the patent’s validity must
show that the patent is vulnerable, which “requires less
proof than the clear and convincing showing necessary to
establish invalidity itself.” Amazon, 239 F.3d at 1359.
Here, the district court found that because LTC had not
shown that every element of the claimed invention was
7 CELSIS IN VITRO v. CELLZDIRECT

present in the prior art, its obviousness defense lacked
substantial merit. But as explained supra, this is not the
standard for obviousness. Moreover, requiring the defen-
dant to prove obviousness improperly shifts the burden to
the defendant. Instead, the district court must simply
decide whether it is more likely than not that the patent
will be proven invalid at trial. See Titan Tire Corp. v.
Case New Holland, Inc., 566 F.3d 1372, 1379-80 (Fed. Cir.
2009) (“The fact that, at trial on the merits, the proof of
invalidity will require clear and convincing evidence is a
consideration for the judge to take into account in assess-
ing the challenger's case at the preliminary injunction
stage; it is not an evidentiary burden to be met prelimi-
narily by the challenger.”)
The majority affirms the district court’s erroneous
analysis, stating that “LTC will have an opportunity at
the merits stage to expand upon the arguments it made at
the preliminary injunction stage.” Majority Op. at 10.
While the present record may not present a clear and
convincing case for obviousness, it certainly raises a
substantial question on that issue, which the majority
implicitly recognizes. By relying on the patent and ad-
missions from Celsis’ expert, LTC demonstrated that all
of the claim elements were present in the prior art. From
there, based on the need for multi-cryopreserved hepato-
cytes, Celsis repeats the well-known steps to obtain its
desired result.
CONCLUSION
In my judgment, the district court abused its discre-
tion in finding that Celsis had demonstrated a likelihood
of success on the merits because the claimed invention is
nothing more than a repetition of steps already known in
the art. Moreover, the majority perpetuates this error,
and in so doing applies the wrong standard for obvious-
CELSIS IN VITRO v. CELLZDIRECT 8

ness and rationalizes the issuance of the preliminary
injunction because it would prevent competition with a
patented process which may be proven to be invalid. For
these reasons, I dissent.