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United States Court of Appeals for the Federal Circuit
05-1433
ABBOTT LABORATORIES,
Plaintiff-Appellee,
v.
ANDRX PHARMACEUTICALS, INC.,
and ROXANE LABORATORIES, INC.,
Defendants,
and
TEVA PHARMACEUTICALS USA, INC.,
Defendant-Appellant.
Jeffrey I. Weinberger, Munger, Tolles & Olson LLP, of Los Angeles, California,
argued for plaintiff-appellee. With him on the brief were Ted G. Dane and Andrea Weiss
Jeffries. Of counsel on the brief were Jennifer L. Polse and Jason Rantanen, of San
Francisco, California. Of counsel were Todd J. Ehlman and R. Mark McCareins, Winston
& Strawn LLP, of Chicago, Illinois.
James Galbraith, Kenyon & Kenyon, of New York, New York, argued for defendant-
appellant. With him on the brief were Maria Luisa Palmese and Robert V. Cerwinski.
Appealed from: United States District Court for the Northern District of Illinois
Judge David H. Coar
United States Court of Appeals for the Federal Circuit
05-1433
ABBOTT LABORATORIES,
Plaintiff-Appellee,
v.
ANDRX PHARMACEUTICALS, INC.,
and ROXANE LABORATORIES, INC.,
Defendants,
and
TEVA PHARMACEUTICALS USA, INC.,
Defendant-Appellant.
__________________________
DECIDED: June 22, 2006
__________________________
Before NEWMAN, GAJARSA, and PROST, Circuit Judges.
Opinion for the court filed by Circuit Judge PROST. Dissenting opinion filed by Circuit
Judge NEWMAN.
PROST, Circuit Judge.
Abbott Laboratories (“Abbott”) brought suit against Teva Pharmaceuticals USA,
Inc. (“Teva”) alleging infringement of its patents relating to extended release
formulations of clarithromycin. Abbott moved for a preliminary injunction against Teva
on the grounds that Teva was infringing claims 2, 4, and 6 of U.S. Patent No. 6,010,718
(“’718 patent”) and claim 2 of U.S. Patent No. 6,551,616 (“’616 patent”). Teva resisted
the motion primarily by arguing that substantial questions existed as to the validity of
Abbott’s asserted claims under 35 U.S.C. § 103. The district court agreed that Teva
had raised a substantial question as to the validity of claim 2 of the ’616 patent but it
rejected Teva’s invalidity arguments as to the asserted claims of the ’718 patent.
Accordingly, the district court granted Abbott’s motion for a preliminary injunction. Teva
appealed. We have jurisdiction to review the district court’s order under 28 U.S.C.
§ 1292(c)(1).
On appeal, Teva has raised substantial issues as to the validity of each of the
asserted claims relied upon for the preliminary injunction. We vacate the preliminary
injunction.
I.
Clarithromycin is a broad spectrum antibiotic from the macrolide family of
antibiotics, all of which are derived from erythromycin A. Taisho Pharmaceuticals Ltd.
received U.S. Patent No. 4,331,803 (“’803 patent”) for clarithromycin in 1982. In 1991,
Abbott, the exclusive licensee of the ’803 patent, introduced Biaxin, an immediate
release dosage form of clarithromycin. The ’803 patent expired on May 23, 2005.
In 1997, Abbott filed for a patent claiming an extended release formulation of
clarithromycin. The patent describes and claims extended release (“ER”) formulations
comprising erythromycin derivatives combined with a pharmaceutically acceptable
polymer. The resulting drug-polymer matrix leads to the extended release properties of
the formulation. The ER formulation enabled patients to take one pill per day rather
than twice, as had been required with the immediate release (“IR”) formulation. That
patent issued on January 4, 2000 as the ’718 patent. Further, based on the ’718 patent
05-1433 2
application, Abbott filed a continuation-in-part application that claims a method of
reducing adverse gastrointestinal (“GI”) side effects of erythromycin-derived drug
formulations by using extended release formulations. This continuation-in-part issued
as the ’616 patent. In 2000, Abbott introduced its ER clarithromycin formulation, Biaxin
XL. As of May 2005, Abbott estimated that, as between Biaxin and Biaxin XL, Biaxin XL
accounted for 70% of sales in the Biaxin market. As the original patent on
clarithromycin expired on May 23, 2005, generic competitors entered the market for
immediate release clarithromycin on May 24, 2005.
In December 2002, Teva filed an Abbreviated New Drug Application (“ANDA”)
seeking approval to market an extended release form of clarithromycin similar to
Abbott’s ER clarithromycin drug, Biaxin XL. On March 14, 2005, Abbott sued Teva for
infringement of the ’718 and ’616 patents.1 On May 18, 2005, Abbott moved for a
preliminary injunction against Teva.
On May 26 and June 1, 2005, the district court held oral argument on Abbott’s
motion for the preliminary injunction and thereafter, on June 3, issued its memorandum
opinion. It listed the four factor test for the grant of a preliminary injunction, namely that
the party seeking the preliminary injunction must show
(1) the movant has some likelihood of success on the merits of the
underlying litigation; (2) immediate irreparable harm will result if the relief
is not granted; (3) the balance of hardships to the parties weighs in the
movant’s favor; and (4) the public interest is best served by granting the
injunctive relief.
1
Abbott also alleged infringement of U.S. Patent No. 6,872,407 and U.S.
Patent 4,680,386 but as this case is a limited appeal of the district court’s grant of a
preliminary injunction under 28 U.S.C. § 1292(c)(1) and that preliminary injunction did
not extend to the claims of the 6,872,407 or 4,680,386 patent, those two patents are not
before us today and will not be discussed.
05-1433 3
Abbott Labs. v. Andrx Pharms., Inc., No. 05-1433, slip op. at 3 (N.D. Ill. June 3, 2005)
(citing Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 973 (Fed. Cir. 1996)). The district
court began its analysis and evaluated Abbott’s likelihood of success on the merits by
considering Abbott’s infringement contentions and Teva’s invalidity defenses. Teva did
not dispute that its generic ER formulation of clarithromycin infringed Abbott’s ’718 and
’616 patent claims. Rather, Teva alleged that the asserted patent claims were invalid
for obviousness under 35 U.S.C. § 103. The court focused on Teva’s invalidity
arguments and concluded that Teva had raised a substantial question as to the validity
of claim 2 of the ’616 patent but it “ha[d] not established that claims 2, 4, and 6 of the
’718 patent are invalid for obviousness.” Abbott Labs., slip op. at 32. Thus as to the
asserted claims of the ’718 patent, Abbott had established a likelihood of success on
the merits. As to irreparable harm, the district court first noted that because of its
finding that Abbott had proved a likelihood of success on the merits of infringement for
the ’718 patent claims, there was a presumption of irreparable harm that Teva had to
rebut. Furthermore, Abbott contended that it will face “irreversible market share losses
[if] . . . it loses its preferred position on pharmacy and insurance formularies.” Abbott
Labs., slip op. at 25. As a result, the district court concluded that “entry of the generic
extended release formulation competitor will likely crush the market” and therefore
absent the preliminary injunction Abbott would suffer irreparable harm. Abbott Labs.,
slip op. at 27. As to the third factor, the district court stated that Teva was “reluctan[t] or
inab[le] to quantify the hardship, if any, it will face if an injunction is incorrectly entered”
and “there is little choice but to conclude that the balance of hardships favors [Abbott].”
Abbott Labs., slip op. at 30-31. Lastly, the district court determined that “[t]o the extent
05-1433 4
that this court has found that the patents in suit are valid, the public interest is best
served by enforcing them.” Id. Based on these considerations, the court issued its
order entering the preliminary injunction with respect to the asserted claims of the ’718
patent.
II.
On appeal, Teva argues that the district court erred in holding that Abbott had
demonstrated that Teva’s invalidity defense to claims 2, 4 and 6 of the ’718 patent
lacked substantial merit. Teva also argues that the district court erred in finding that
Abbott had established that it would suffer irreparable harm if Teva were not enjoined.
As a result of those two errors, Teva alleges that the district court abused its discretion
in granting Abbott’s motion for preliminary injunction.
In response, Abbott contends that, as to claims 2, 4, and 6 of the ’718 patent, it
made a clear showing of likelihood of success on the merits and it is entitled to the
presumption that it would suffer irreparable harm absent the preliminary injunction.
Furthermore, Abbott argues that the preliminary injunction ruling could be affirmed on
the alternate grounds that Teva failed to raise a substantial challenge to the validity of
claim 2 of the ’616 patent.
The grant or denial of a preliminary injunction under 35 U.S.C. § 283 is within the
sound discretion of the district court. Amazon.com, Inc. v. Barnesandnoble.com, 239
F.3d 1343, 1350 (Fed. Cir. 2001). As the Supreme Court recently held on the closely
related topic of permanent injunctions, “[t]he decision to grant or deny permanent
injunctive relief is an act of equitable discretion by the district court, reviewable on
appeal for abuse of discretion.” eBay, Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837,
05-1433 5
1839 (2006). “These familiar principles apply with equal force to disputes arising under
the Patent Act. . . . . [T]he Patent Act expressly provides that injunctions ‘may’ issue ‘in
accordance with the principles of equity.’” Id. (quoting 35 U.S.C. § 283). As the moving
party, Abbott had to establish its right to a preliminary injunction in light of four factors:
(1) the movant has some likelihood of success on the merits of the
underlying litigation; (2) immediate irreparable harm will result if the relief
is not granted; (3) the balance of hardships to the parties weighs in the
movant’s favor; and (4) the public interest is best served by granting the
injunctive relief.
Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 973 (Fed. Cir. 1996).
An abuse of discretion in granting or denying a preliminary injunction may be
found “by showing that the court made a clear error of judgment in weighing relevant
factors or exercised its discretion based upon an error of law or clearly erroneous
factual findings.” Id. (quoting Novo Nordisk of N. Am., Inc. v. Genentech, Inc., 77 F.3d
1364, 1367 (Fed.Cir.1996)). We now turn to the factors relevant to a motion for a
preliminary injunction.
III.
As to Abbott’s likelihood of success on the merits, “Teva does not dispute that its
generic clarithromycin extended release formulation infringes Abbott’s ’718 and ’616
patents. Teva asserts that those patents . . . are invalid for obviousness under 35
U.S.C. § 103 (2004).” Abbott Labs., slip op. at 3. As a result, “if [the defendant] raises
a substantial question concerning . . . validity, i.e. . . . [an] invalidity defense that the
patentee cannot prove ‘lacks substantial merit’” then the patentee has not established a
05-1433 6
likelihood of success on the merits.2 Amazon.com, 239 F.3d at 1350-51 (citing
Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997)).
Furthermore, as this case involves multiple patent claims, “the patentee must
demonstrate that . . . at least one of [the] allegedly infringed claims will . . . likely
withstand the validity challenges presented by the accused infringer.” Id. As to the
burden regarding invalidity allegations, “[v]alidity challenges during preliminary
injunction proceedings can be successful, that is, they may raise substantial questions
of invalidity, on evidence that would not suffice to support a judgment of invalidity at
trial.” Id. at 1358 (citing Helifix, 208 F.3d at 1352). As this court has stated
In resisting a preliminary injunction, however, one need not make out a
case of actual invalidity. Vulnerability is the issue at the preliminary
injunction stage, while validity is the issue at trial. The showing of a
substantial question as to invalidity thus requires less proof than the clear
and convincing showing necessary to establish invalidity itself.
2
The dissent appears to take issue with the conclusion that a likelihood of
success on the merits is not found where there exists a substantial question of validity.
The majority opinion, however, is duty bound by our precedent which states exactly this
proposition. In Genentech, Inc. v. Novo Nordisk, A/S, this court stated that
In order to demonstrate that it has a likelihood of success, Genentech
must show that, in light of the presumptions and burdens that will inhere at
trial on the merits, (1) it will likely prove that Novo infringes the ’199 patent
and (2) its infringement claim will likely withstand Novo’s challenges to the
validity and enforceability of the ’199 patent. In other words, if Novo raises
a ‘substantial question’ concerning validity, enforceability, or infringement
(i.e., asserts a defense that Genentech cannot show ‘lacks substantial
merit’) the preliminary injunction should not issue. More specifically, with
regard to Novo’s validity defenses, the question on appeal is whether the
[defenses have] substantial merit . . . .
108 F.3d 1361, 1364 (Fed. Cir. 1997); see also Tate Access Floors, Inc. v. Interface
Architectural Res., Inc., 279 F.3d 1357, 1365 (Fed. Cir. 2002), Purdue Pharma L.P. v.
Boehringer Ingelheim GMBH, 237 F.3d 1359, 1363 (Fed. Cir. 2001), Helifix Ltd. v. Blok-
Lok, Ltd., 208 F.3d 1339, 1351 (Fed. Cir. 2000).
05-1433 7
Id. at 1359. “When moving for the extraordinary relief of a preliminary injunction, a
patentee need not establish the validity of a patent beyond question. The patentee
must, however, present a clear case supporting the validity of the patent in suit.” Id.
(citations omitted).
Turning to Teva’s invalidity contentions based on obviousness, “‘the first step is
to determine the meaning and scope of each claim in suit.’” Id. (quoting Lemelson v.
Gen. Mills, Inc., 968 F.2d 1202, 1206 (Fed. Cir. 1992)). “Only when a claim is properly
understood can a determination be made . . . whether the prior art . . . renders obvious
the claimed invention.” Id. We have stated that “[q]uite apart from the written
description and the prosecution history, the claims themselves provide substantial
guidance as to the meaning of particular claim terms.” Phillips v. AWH Corp., 415 F.3d
1303, 1314 (Fed. Cir. 2005). “First, we look to the words of the claims themselves, both
asserted and nonasserted, to define the scope of the patented invention.” Vitronics
Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996). Where claim terms
are ambiguous or disputed, then we turn to the specification as “the specification ‘is
always highly relevant to the claim construction analysis. Usually, it is dispositive; it is
the single best guide to the meaning of a disputed term.’’’ Phillips, 415 F.3d at 1315
(quoting Vitronics, 90 F.3d at 1582).
Once the scope of the claims are determined, the actual obviousness
determination under 35 U.S.C. § 103 begins. Recently this court re-iterated the proper
standards for making determinations under § 103. In re Kahn, 441 F.3d 977 (Fed. Cir.
2006). First, the court
determines the scope and content of the prior art, and ascertains the
differences between the prior art and the claims at issue, and resolves the
05-1433 8
level of ordinary skill in the pertinent art. Against this background, the
[court] determines whether the subject matter would have been obvious to
a person of ordinary skill in the art at the time of the asserted invention.
Id. at 985 (citing Dann v. Johnston, 425 U.S. 219, 226 (1976) and Graham v. John
Deere Co., 383 U.S. 1, 13-14 (1966)). In making this determination, we noted in Kahn
that “[m]ost inventions arise from a combination of old elements and each element may
often be found in the prior art.” Id. at 986. The prior art that is considered is drawn from
references “either in the field of the applicant’s endeavor or is reasonably pertinent to
the problem with which the inventor was concerned.” Id. at 987.
However, mere identification in the prior art of each element is insufficient
to defeat the patentability of the combined subject matter as a whole.
Rather, a party alleging invalidity due to obviousness must articulate the
reasons one of ordinary skill in the art would have been motivated to
select the references and to combine them to render the claimed invention
obvious.
Id. at 986.
This ‘motivation-suggestion-teaching’ test asks not merely what the
references disclose, but whether a person of ordinary skill in the art,
possessed with the understandings and knowledge reflected in the prior
art, and motivated by the general problem facing the inventor, would have
been led to make the combination recited in the claims.
Id. at 988.
In analyzing Teva’s obviousness contentions as to claims 2, 4, and 6 of the ’718
patent and Abbott’s alternative grounds for affirming the preliminary injunction under
claim 2 of ’616 patent, we separate the analysis into two parts. Claim 2 and 4 of the
’718 patent are closely related and are addressed first. Claim 6 of the ’718 patent and
claim 2 of the ’616 patent are dealt with next. For each pair of claims, we construe the
claims and we determine if the allegations raise substantial questions of obviousness.
05-1433 9
A.
We begin by examining claim 2 and 4 of the ’718 patent and the district court’s
analysis regarding these claims. Claim 2 of the ’718 patent claims3
a pharmaceutical composition for extended release of an erythromycin
derivative in the gastrointestinal environment, comprising
an erythromycin derivative and
from about 5 to about 50% by weight of a pharmaceutically acceptable
polymer, wherein the polymer is a hydrophilic water-soluble polymer,
so that when ingested orally, the composition induces statistically
significantly lower mean fluctuation index in the plasma than an immediate
release composition of the erythromycin derivative while maintaining
bioavailability substantially equivalent to that of the immediate release
composition of the erythromycin derivative.
’718 patent, col. 11, ll. 28-40. In short, claim 2 has three basic elements. First, the
extended release composition includes an erythromycin derivative. Second, it includes
a polymer. Third, the claim includes specific pharmacokinetic parameters that the
erythromycin derivative and polymer composition must meet.
Similarly, claim 4 claims
a pharmaceutical composition for extended release of an erythromycin
derivative in the gastrointestinal environment, comprising
an erythromycin derivative and
from about 5 to about 50% by weight of a pharmaceutically acceptable
polymer,
so that upon oral ingestion, maximum peak concentrations of the
erythromycin derivative are lower than those produced by an immediate
release pharmaceutical composition, and area under the concentration-
time curve and the minimum plasma concentration are substantially
equivalent to that of the immediate release pharmaceutical composition.
3
Claim 2 of the ’718 patent depends from independent claim 1. The
language recited for claim 2 includes the combined limitations of claim 1 and claim 2.
05-1433 10
’718 patent, col. 11, ll. 48-58. As can be seen, claim 4 also has three basic elements:
the erythromycin derivative, the polymer, and specific (but different from claim 2)
pharmacokinetic parameters.
From the specification, the district court defined erythromycin derivative in both
claims as meaning “‘erythromycin having no substituent groups, or having conventional
substituent groups, in organic synthesis, in place of a hydrogen atom of the hydroxy
groups and/or a methyl group of the 3’-dimethylamino group, which is prepared
according to the conventional manner.’” Abbott Labs., slip op. at 10 (quoting ’718
patent, col. 3, ll. 34-39). Notably, this definition of erythromycin derivative includes
clarithromycin but excludes azithromycin, a related macrolide antibiotic sold by Pfizer as
the drug Zithromax.
Then, construing “pharmaceutically acceptable polymer,” the district court again
properly turned to the ’718 patent specification. The specification describes this as “a
water-soluble hydrophilic polymer selected from the group consisting of
polyvinylpyrrolidine, hydroxypropyl cellulose, hydroxypropylmethyl cellulose, methyl
cellulose, vinyl acetate/crotonic acid copolymers, methacrylic acids copolymers, maleic
anhydride/methyl vinyl ether copolymers and derivatives and mixtures thereof.” Id.
(quoting ’718 patent, col. 3, l. 65 – col. 4, l. 4). Furthermore, the specification describes
the “‘more preferabl[e]’” polymer as hydroxypropylmethyl cellulose (“HPMC”). Id.
(quoting ’718 patent, col. 4, l. 7).
The district court also construed the more technical limitations in the claims. In
claim 4 the pharmacokinetic limitations require that
upon oral ingestion, maximum peak concentrations of the erythromycin
derivative are lower than those produced by an immediate release
05-1433 11
pharmaceutical composition, and area under the concentration-time curve
and the minimum plasma concentration are substantially equivalent to that
of the immediate release pharmaceutical composition.
The district court elaborated on this language by stating that
[t]his means that the concentration-time curve representing the
concentration of drug in blood plasma will be flatter and lower for the
extended release formulation than for the immediate release formulation,
but will have an area under the curve (“AUC”) that is substantially
equivalent to that of its immediate release corollary. At the same time, the
minimum plasma concentration for the extended release formulation will
be substantially the same as that of the immediate release formulation,
meaning that the drug will be present in the blood at the same minimum
level at all times for both the immediate release and extended release
formulations.
Id.
The district court did not address the pharmacokinetic limitations of claim 2
explicitly. Below, in our analysis, we turn to the specification to aid in defining the
pharmacokinetic parameters of claim 2.
In making its invalidity contentions, Teva pointed to a number of prior art
references. These included published Patent Cooperation Treaty application WO
95/30422 (“the ’422 publication”). It pertained to controlled-release dosage forms of
azithromycin with HPMC that, among other things, was meant to address the GI side
effects of azithromycin.
Teva also pointed to Abbott’s own U.S. Patent No. 5,705,190 (“’190 patent”)
which disclosed a controlled release pharmaceutical formulation of clarithromycin
combined with a water soluble alginate salt. Furthermore, Teva also cited a number of
other prior art references including textbooks and government and trade publications
that discussed controlled release pharmaceuticals. The district court characterized
these more general sources as “sources in the prior art discussing extended release
05-1433 12
formulations and seeking ways to develop formulations that achieved desirable
pharmacokinetic goals.” Id.
Considering its tentative claim construction and after reviewing these prior art
references, the district court determined that
Teva has failed to raise a substantial question as to the validity of Abbott’s
claim 2 and 4. The prior art cited by Teva discloses discrete portions of
the asserted claims, but Teva fails to demonstrate that this would be
sufficient to give a person of ordinary skill in the art a reasonable
expectation of success. Teva’s prior art references reveal that using
HPMC was a logical line of inquiry but the dissimilarities between the
drugs with which HPMC had been successfully combined and
clarithromycin defeat Teva’s claim of obviousness. . . . Abbott has
provided ample evidence that its invention was not obvious and that there
were many other extended release formulations known in the prior art.
Abbott Labs., slip op. at 17-18.
1.
On appeal, we begin, as did the district court, with the claims. We agree with the
district court’s preliminary claim construction as to “erythromycin derivative” and
“pharmaceutically acceptable polymer” in both claims 2 and 4. Furthermore, we agree
with the district court’s elaboration on the pharmacokinetic parameters of claim 4. In
short, the parameters of claim 4 require three things:
[1] maximum peak concentrations of the erythromycin derivative are lower
than those produced by an immediate release pharmaceutical
composition, [2] area under the concentration-time curve are substantially
equivalent to that of the immediate release pharmaceutical composition
and, [3] the minimum plasma concentration are substantially equivalent to
that of the immediate release pharmaceutical composition.
’718 patent, col. 11, ll. 48-58. In order to more fully understand these specific
parameters, we turn to the specification. It defines a number of the relevant
pharmacokinetic parameters used in these claims. The specification defines the
“maximum plasma concentration of the erythromycin derivative, produced by the
05-1433 13
ingestion of the composition of the invention or the IR comparator” as CMax. ’718 patent,
col. 3, ll. 13-15. Likewise, the minimum plasma concentration is defined as CMin. ’718
patent, col. 3, ll. 15-19. The specification defines the area under the curve, AUC, “as
the area under the plasma concentration-time curve, as calculated by the trapezoidal
rule over the complete 24-hour interval for all the formulations.” ’718 patent, col. 3, ll.
26-29. From these definitions given in the specification, we can describe the three
pharmacokinetic limitations of claim 4 as CMax_ER< CMax_IR , AUCER = AUCIR , and CMin_ER
= CMin_IR.4
As to claim 2, the district court did not explicitly discuss that claim’s
pharmacokinetic parameters. Nonetheless, just as with claim 4, the parameters in claim
2 are defined in the specification. Claim 2 requires that
the composition [1] induces statistically significantly lower mean fluctuation
index in the plasma than an immediate release composition of the
erythromycin derivative while [2] maintaining bioavailability substantially
equivalent to that of the immediate release composition of the
erythromycin derivative.
C − C Min
DFL = Max
The specification defines the “degree of fluctuation” or DFL as C Av , ’718
patent, col. 3, l. 33. CAv is the average concentration of the drug over a twenty-four hour
interval, ’718 patent, col. 3, ll. 19-22, and generally is defined as CAv = AUC/τ where τ is
twenty-four hours. See Shargel & Yu, Applied Biopharmaceutics and Pharmacokinetics
252 (3d ed. 1993). The ’718 patent specification defines “bioavailability” as the log-
transformed AUC. ’718 patent, col. 7, l. 17. Based on this logarithm-based definition, it
4
There is little in the patent itself that establishes the differences (if any)
between parameters that are simply “lower” rather than “statistically significantly lower”
and the specification does not explicitly define when two parameters are “substantially
equivalent.” For purposes of this preliminary injunction, we do not reach these more
nuanced issues in claim construction.
05-1433 14
follows that, at a minimum, where AUCER = AUCIR then the two compositions would
have substantially equivalent bioavailability. Thus, sufficient conditions for satisfying
claim 2’s pharmacokinetic parameters are that: DFLER < DFLIR and AUCER = AUCIR.
2.
We now turn to the relevant prior art and begin by focusing on the invalidty
allegations surrounding claim 4. As described above, the prior art includes the ’190
patent owned by Abbott. The patent, inter alia, describes and claims compositions of
clarithromycin in an alginate matrix. Abbott itself describes that “the formulations are
administered once a day and are directed towards increasing the bioavailability of the
active ingredient so that it is bioequivalent with the current immediate release, twice a-
day compositions.” ’190 patent, col. 1, ll. 43-47. Several disclosures in this patent merit
attention. Claim 4 of the ’190 patent claims “a controlled release, solid pharmaceutical
composition . . . comprising: a therapeutically effective amount of a macrolide . . . [and]
a water-soluble alginate salt . . . .” Furthermore, claim 5 of the ’190 patent claims “[t]he
composition of claim 4 wherein the macrolide is clarithromycin.” Thus, the ’190 patent
discloses an extended release formulation of clarithromycin wherein the polymer used is
alginate as opposed to the polymers like HPMC claimed in the ’718 patent.
The ’190 patent also discloses particular pharmacokinetic parameters for its
controlled release clarithromycin and alginate compositions. For example, as pointed
out by Teva, a side-by-side comparison of Formula C of the ’190 patent with an IR
formulation shows that Formula C exhibited a lower CMax (2.00 µg/mL) than the
immediate release formulation (2.28 µg/mL) and substantially equivalent AUC (28.69
05-1433 15
ranging from 24.61 to 32.74 µg h/mL vs. 32.16 ranging from 25.66 to 42.70 µ gh/mL )
and substantially equivalent CMin (0.66 ranging from 0.37 to 0.91 µg/mL vs. 0.72 ranging
from .54 to 1.05 µg/mL). ’190 patent, col. 7, table 2. Thus, Teva makes substantial
arguments that the ’190 patent discloses a clarithromycin composition with alginate (as
opposed to a polymer like HPMC) that arguably has the pharmacokinetic parameters
required in claim 4 of the ’718 patent.
Of the claim limitations in claim 4 of the ’718 patent, the ’190 patent does not
disclose the claimed polymers of the ’718 patent. The ’190 patent only discloses the
use of alginate in making controlled release formulations. Other prior art, though, does
disclose extended release formulations with pharmaceutically acceptable polymers like
HPMC. For example, the ’422 publication filed by Pfizer Inc., discloses controlled-
release dosage forms of azithromycin. In particular, the application disclosed controlled
release formulations created from combining azithromycin with HPMC. Abbott Labs.,
slip op. at 14.
On appeal, Teva argues that, based on the ’422 publication, a person of ordinary
skill in the art would replace the alginate of the ’190 patent with HPMC because the ’422
publication disclosed using HPMC with azithromycin, a compound related to
clarithromycin. In response, Abbott points out that most inventions arise from a
combination of old elements and that “identification in the prior art of each individual part
claimed is insufficient to defeat patentability of the whole claimed invention.” Abbott
Labs., slip op. at 15 (quoting In re Kotzab, 217 F.3d 1365, 1370 (Fed. Cir. 2000)).
As mentioned above, there must be some motivation, suggestion, or teaching of
the desirability of making the specific compound. Abbott argues that such a motivation
05-1433 16
is lacking here because the compounds azithromycin and clarithromycin are so different
that the ’422 publication would not reasonably motivate a person of skill in the art to
interchange the components of the formulations in the ’422 publication with those of the
’190 patent with a reasonable expectation of success. The district court agreed with
Abbott and found that because of the chemical and metabolic differences between
azithromycin and clarithromycin, “a person of ordinary skill in the art would not have had
a reasonable expectation that the azithromycin formulation in the ’422 publication . . .
would lead to the features claimed in the ’718 patent.” Id. at 16. It is in this conclusion
that the district court erred.
The district court concluded that Teva had not raised a substantial question that
a person of ordinary skill in the art would have had a reasonable expectation of success
in making the claimed invention. The prior art, however, especially Abbott’s own ’190
patent, contradicts that conclusion. As argued by Teva, another claim from the ’190
patent merits close attention. Not only does the ’190 patent claim compositions with
clarithromycin, but claim 14 of the ’190 patent claims “[t]he composition of claim 4,
wherein the macrolide is selected from the group consisting of erythromycin,
dirithromycin, azithromycin, roxithromycin, and ABT-229.” This claim is relevant
because it describes Abbott’s own view of the ordinary skill in the art at the time it filed
the application that led to the ’190 patent and it does so not by what the ’190 patent
discloses but by what it does not disclose. Claim 4 and 14 of the ’190 patent cover
compositions that include azithromycin or clarithromycin. Despite these claims to varied
compositions, the specification only explicitly describes compositions made from
clarithromycin. We presume that Abbott filed and prosecuted the ’190 patent
05-1433 17
representing that claim 14 of the ’190 patent satisfies the written description and
enablement requirements of 35 U.S.C. § 112. See Amgen Inc. v. Hoechst Marion
Roussel, Inc., 314 F.3d 1313 (Fed. Cir. 2003) (“[W]e hold a presumption arises that both
the claimed and unclaimed disclosures in a prior art patent are enabled.”). Because the
’190 patent explicitly discloses only clarithromycin controlled release compositions, yet
claims azithromycin compositions, we conclude that Abbott has represented to the U.S.
Patent and Trademark Office (“PTO”) that the differences between clarithromycin and
azithromycin were such that azithromycin could be substituted into a controlled release
clarithromycin composition by a person of ordinary skill in the art without undue
experimentation. See Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052, 1070-71
(Fed. Cir. 2005) (“Section 112 requires that the patent specification enable those skilled
in the art to make and use the full scope of the claimed invention without undue
experimentation . . . . The scope of enablement, in turn, is that which is disclosed in the
specification plus the scope of what would be known to one of ordinary skill in the art
without undue experimentation.”). As a result, based on Abbott’s own ’190 patent, there
exists a substantial argument that a person of ordinary skill in the art would be
motivated to combine the ’422 publication, namely the use of HPMC in extended
release macrolide compositions, with the ’190 patent with a reasonable expectation of
success.
Furthermore, the district court also erred by focusing on the drugs’ chemical
dissimilarities, while not properly accounting for their similarities. It appears to have
focused on the presence of differences per se, rather than on those differences that
would be relevant vel non to one of ordinary skill in the art. For example, the court
05-1433 18
appears to have been influenced by Abbott’s expert, Dr. Banker, who pointed out that
the half-life of azithromycin is longer than that of clarithromycin. Dr. Banker also noted
that clarithromycin exhibits an extensive “first-pass” metabolism to an active metabolite,
whereas azithromycin does not. However, the court appears to have inexplicably
discounted the testimony of Dr. Lee. As Dr. Lee noted, because the drug is transformed
into an active metabolite, “a person skilled in the art would have expected that
clarithromycin would work even better than azithromycin in an extended release
formulation.” Addressing the drugs’ differences in half-life and metabolism, Dr. Lee
concluded that “these characteristics further support the expectation that a person of
ordinary skill in the art would have motivation and a reasonable expectation of success
in making a successful ER formulation of clarithromycin . . . .” (emphasis added).
In light of the record, Teva has raised a substantial question that claim 4 is
vulnerable to allegations of invalidity. The ’190 patent itself demonstrates that Abbott
has represented to the PTO and the public in general that a person of ordinary skill in
the art can expect to successfully substitute azithromycin into a clarithromycin controlled
release composition without undue experimentation.
Claim 2 presents a slightly different analysis. The prior art and the obviousness
discussion from claim 4 could be applied directly to claim 2 but for the differences in
pharmacokinetic limitations. Upon inspection, the ’422 publication and the ’190 patent
disclose compositions satisfying the pharmacokinetic limitations of claim 2 and therefore
the obviousness arguments from above do apply and provide a substantial argument as
to the invalidity of claim 2. As discussed above, where two compositions have similar
AUCs, these compositions have similar bioavailability. The ’190 patent discloses
05-1433 19
compositions with similar AUC’s and therefore there exists a substantial argument that it
discloses compositions with substantially equivalent bioavailability. ’190 patent, col. 7,
table 2. Thus, the ’190 patent discloses compositions that satisfy the second of the
pharmacokinetic limitations of claim 2. Furthermore, although the ’190 patent does not
explicitly disclose compositions with a lower fluctuation index, the ’190 patent,
nonetheless, does so implicitly. By comparing the disclosed pharmacokinetic
parameters from the ’190 patent, a substantial argument exists that the ’190 patent also
discloses compositions satisfying DFLER < DFLIR. As discussed above, the ’190 patent
discloses pharmacokinetic parameters that satisfy claim 4. In other words, the ’190
patent discloses a composition that satisfies: CMax_ER< CMax_IR , AUCER = AUCIR , and
CMin_ER = CMin_IR. By examining the definitions given in the specification, we conclude
that the disclosed composition from the ’190 patent also implicitly satisfies the condition
from claim 2 that DFLER < DFLIR. By subtracting claim 4’s third condition from the first,
one can infer that the composition from the ’190 patent also satisfies
CMaxER − CMinER < CMaxIR − CMinIR . This inequality, with the definition of the fluctuation index,
and with the second limitation from claim 4, establishes that:
C MaxER − C MinER C MaxER − C MinER C MaxIR − C MinIR C MaxIR − C MinIR
DFL ER = = < = = DFLIR
C AvER AUC ER / τ AUC IR / τ C AvIR .
In other words, because the ’190 patent disclosed a composition satisfying the
pharmacokinetic limitations of claim 4, the ’190 patent also disclosed compositions that
satisfy DFLER < DFLIR and are substantially bioequivalent.5 Thus, the obviousness
5
As mentioned above, though the inequality follows strictly from satisfying
the conditions of claim 4, this does not necessarily lead to the conclusion that the
fluctuation index of the extended release formulation is “statistically significantly lower”
05-1433 20
arguments relating to the ’190 patent and the ’422 publication made above for claim 4
can be applied in similar fashion to claim 2. As a result, Teva has also raised
substantial questions as to the validity of claim 2.
B.
We now turn to claim 6 of the ’718 patent and claim 2 of ’616 patent.6 In its
analysis, the district began by looking to the claims. Claim 2 of the ’616 patent sets
forth
a method of reducing gastrointestinal adverse side effects comprising
administering an effective amount of an extended release pharmaceutical
composition comprising an erythromycin derivative and a pharmaceutically
acceptable polymer, wherein the erythromycin derivative is clarithromycin.
’616 patent, col. 12, ll. 39-46. For these claims, “erythromycin derivative” and
“pharmaceutically acceptable polymer” are construed as they are construed in claims 2
and 4 of the ’718 patent discussed above. As to claim 2, the district court relied on the
plain meaning of “reducing gastrointestinal adverse side effects.”
At the district court, Teva argued that
[w]ell before the invention of the patent, adverse gastrointestinal effects
were widely known as side effects of both erythromycin and clarithromycin
and, to a lesser degree, azithromycin. In addition, persons skilled in the art
knew that one way to reduce these gastrointestinal effects was to
than the immediate release. But nonetheless, the result derived here is enough to show
that Teva has produced substantial argument as to the invalidity of claim 2. This is true
despite the example given in the ’718 patent analyzing Formula A from the ’190 patent
for its pharmacokinetic parameters, ’718 patent, col. 10, ll. 62-67, most notably,
because Formula C not Formula A from the ’190 patent appears to satisfy the
pharmacokinetic limitations of claims 2 and 4 of the ’718 patent.
6
The district court concluded that Teva had made a substantial argument
as to the invalidity of claim 2 of the ’616 patent. In this appeal, Abbott argues that claim
2 of the ’616 could form an alternative basis for upholding the preliminary injunction and
therefore we also review the parties’ arguments as to the validity of claim 2.
05-1433 21
formulate the drug in a polymer matrix, e.g., an extended release
formulation. The GI side effects of clarithromycin were known to be
dependent on the drug concentration in the blood. Moreover, the ’422
[publication] for extended release azithromycin disclosed that extended
release compositions of that closely-related compound reduced
gastrointestinal side effects.
Abbott Labs., slip op. at 21. In contrast, Abbott argued, inter alia, that “the
gastrointestinal side effects of different active pharmaceutical agents are so distinct that
the pharmacokinetic properties of a formulation with one drug are not predictive of a
similar formulation with another drug.” Id.
After reviewing the prior art, the district court concluded that
Abbott has failed to meet its burden of demonstrating that Teva’s
opposition lacks substantial merit. This court finds that the prior art,
specifically the discussions in industry treatises and medical journals of
formulations that reduced GI irritation, the teachings of the ’422
[publication], and the reference material in the Physicians’ Desk
Reference regarding side effects, would lead a person of ordinary skill in
the art to expect that an extended release formulation of clarithromycin
would reduce adverse GI side effects.
Id. at 22.
Claim 6 of the ’718 patent claims
an extended release pharmaceutical composition comprising an
erythromycin derivative and a pharmaceutically acceptable polymer, the
composition having an improved taste profile as compared to the
immediate release formulation.
’718 patent, col. 12, ll. 23-27. As to claim 6, the district court specifically construed the
term “taste profile” noting that the specification of the ’718 patent describes “taste
profile” in parentheses immediately following the words “taste perversion.” ’718 patent,
col. 9, ll. 23-24. The specification defines “taste perversion” as “the perception of a
bitter metallic taste normally associated with the erythromycin derivatives, particularly,
with clarithromycin.” ’718 patent, col. 3, ll. 53-55. Based on this usage in the
05-1433 22
specification, the district court concluded that “taste perversion” and “taste profile” are
“used synonymously.” Abbott Labs., slip op. at 19.
At the district court, Teva argued that “[i]t was known that clarithromycin caused
taste perversion and this created a motivation for formulators to try to create an
extended release formulation that would have a[n] improved taste profile. As support,
Teva cited a 1993 article written by Abbott researchers, discussing the
pharmacokinetics of single- and multiple-dose clarithromycin.” Id. at 19 (citations
omitted). Furthermore, Teva also relied on Pfizer’s ’422 publication which, as discussed
above, disclosed extended release formulations for amelioration of other macrolide
related side effects. Abbott argued that only its own study by its researchers mentioned
taste perversion. The other references, like the ’422 publication, either describe other
non-taste related side effects or they describe “taste masking” rather than “taste
perversion.” Id. Furthermore, as to its one study, Abbott argued that the mere fact that
taste perversion is mentioned does not make claim 6 obvious and, additionally, that
Teva had not even shown evidence that taste perversion is dose dependent.
After weighing the prior art, the district court
agree[d] with Abbott that Teva has not met its burden of raising a
substantial question as to the validity of claim 6. Teva relies primarily on
only one study, cited apparently in only one article, that mentions taste
perversion as a known side effect of clarithromycin, and even then, in only
one of thirty-eight research subjects. This court finds that Teva has failed
to provide sufficient evidence to demonstrate that improved taste profile as
a result of an extended release formulation of clarithromycin would have
been obvious to an ordinary person skilled in the art.
Id. at 20.
05-1433 23
The district court concluded that Teva failed to raise a substantial question as to
claim 6 of the ’718 patent but the district court found Teva had raised a substantial
question as to the validity of claim 2 of the ’616 patent.
1.
The district court properly construed the claims for the purposes of the
preliminary injunction. “Erythromycin derivative” and “pharmaceutically acceptable
polymer” are construed as above. Furthermore, for claim 2 of the ’616 patent, reducing
gastrointestinal side effects is given its plain meaning while for claim 6 of the ’718
patent, “taste profile” is read as synonymous with “taste perversion.”
2.
We now turn to the obviousness contentions based on the above construction of
claim 2 and 6. Even though claim 2 is a method claim and claim 6 is a composition,
they both deal with ER compositions of erythromycin derivatives combined with
pharmaceutically acceptable polymers that can improve adverse side effects compared
to the IR compositions. As a result, the obviousness analysis is quite similar for both
claims. Claim 2 addresses reducing adverse GI side effects while claim 6 addresses
improving the taste profile.
These two claims have three major components. They require an erythromycin
derivative, a polymer, and they each recite improvement of a side effect (taste
perversion for claim 6 of the ’718 patent and GI side effects for claim 2 of the ’616
patent). Following the discussion above of claim 2 and 4 of the ’718 patent, there are
substantial arguments that an extended release formulation with an erythromycin
05-1433 24
derivative and an acceptable polymer would have been obvious in light of the prior art.7
The validity of claim 2 and claim 6 likely hinges on the extra limitations regarding the
claimed improved side-effects. In its brief on appeal, Abbott contends that “[t]he
inventions of the patents in suit decrease the incidence and severity of two primary side
effects of clarithromycin: taste perversion and gastrointestinal distress. . . . [T]hese
discoveries form the basis of claim 6 of the ’718 patent and claim 2 of the ’616 patent
respectively.” As to such claims, this court has stated that “when unexpected results
are used as evidence of nonobviousness, the results must be shown to be unexpected
compared with the closest prior art.” In re Baxter Travenol Labs., 952 F.2d 388, 392
(Fed. Cir. 1991) (citing In re De Blauwe, 736 F.2d 699, 705 (Fed. Cir. 1984)).
The prior art and Abbott’s own statements in its briefs indicate that the reduction
of systemic side effects would not be surprising and would not be unexpected. This,
therefore, raises a substantial question as to the validity of the claims. First, as to the
GI side-effects, the district court found that the “GI side effects of clarithromycin were
known to be dependent on the drug concentration in the blood.” Abbott Labs., slip op.
at 21. Furthermore, the district court found that Abbott contended that “an extended
release formulation would reduce the maximum blood plasma concentration of the
drug.” Id. Thus, the resulting reduction in GI side-effects cannot be said to be
unexpected and the district court correctly found that Teva raised a substantial question
as to the invalidity of claim 2 of the ’616 patent.
7
As opposed to claim 2 and 4 of the ’718 patent, claim 6 of the ’718 and
claim 2 of the ’616 do not limit their claimed extended release formulations with any
specific pharmacokinetic parameters.
05-1433 25
Second, as to taste perversion, Teva points to a number of prior art references
including a study conducted by Abbott described in S.-y. Chu et al., Single- and
Multiple-dose Pharmacokinetics of Clarithromycin, a New Macrolide Antimicrobial, 33 J.
Clin. Pharmacol. 719-26 (1993). The article describes a study of single and multiple
dose trials of clarithromycin and it reported the side effects encountered by participants
including taste perversion. At the district court, Abbott argued “that Teva’s reliance on
[this] Abbott study disclosed in the Journal of Clinical Pharmacology overstates its case.
Only one of thirty eight subjects reported taste perversion as a side effect, and only at
one of four different dosage levels.” Abbott Labs., slip op. at 19. The district court
seemingly agreeing with Abbott’s view of that reference concluded that “this court
agrees with Abbott that Teva has not met its burden of raising a substantial question as
to the validity of claim 6. Teva relies primarily on only one study, cited apparently in only
one article, that mentions taste perversion as a known side effect of clarithromycin, and
even then, in only one of thirty-eight research subjects.” Abbott Labs., slip op. at 20.
Upon examining that reference, we cannot agree with Abbott’s or the district
court’s characterization. In the study, two groups of participants underwent differing
treatment protocols. See Chu, supra, at 721. A group of twenty underwent both a
single 250 mg clarithromycin protocol and a multiple 250 mg clarithromycin protocol. Id.
From among these two 250 mg protocols, no participants reported taste perversion as a
side-effect. Id. Another group of eighteen participants underwent both a single 500 mg
protocol and a multiple 500 mg dose protocol. Id. From among these protocols, one
participant in each of the 500 mg protocols reported taste perversion. Id. Thus, out of
the four trials, neither of 250 mg protocols produced taste perversion as a side-effect
05-1433 26
while each 500 mg trial produced one reported case of taste perversion. Therefore,
Abbott is incorrect in stating that the study only reported taste perversion at one of four
dosage levels. Admittedly, finding 0 out of 20 cases in neither 250 mg dosage protocols
and 1 out of 18 cases in each 500 mg protocol does not establish that taste perversion
is dose dependent but it does support such arguments. Furthermore, as a general
matter, the prior art also suggests that a known advantage of a sustained-release
formulation is “a decrease or elimination of both local and systemic side effects.”
Charles S. L. Chiao & Joseph R. Robinson, Sustained-Released Drug Delivery
Systems, in Remington: The Science and Practice of Pharmacy, 1660, 1662 (A.R.
Gennaro, ed. 1995). Lastly, Abbott states that “taste perversion is different from simply
an ‘unpleasant taste’ of the drug when first ingested. . . . Rather, it refers ‘to the
continuing effect of the drug upon the sense of taste while the drug remains in the
bloodstream . . . .’” In other words, taste perversion is not related to a direct, local taste
sensation from the drug on the tongue but is rather a systemic side effect. In regard to
systemic side effects generally, Abbott states that “side effects can be either systemic -
in which case they correlate to overall drug levels in blood - or local - in which case they
correlate with the levels of drug being released at the site of irritation.” From these
statements, Abbot suggests that systemic side effects like taste perversion correlate
with overall drug blood levels. Thus, Abbott’s own statements from its brief support the
argument that reduction of taste perversion would not be unexpected when an extended
release formulation lowers the concentration of the drug in the blood.8 Based, on these
8
This does not mean to suggest that lowering drug concentration will lead
inexorably to improved side effects; rather, it only suggests that such an improvement
would not be unexpected.
05-1433 27
references and statements, a substantial question exists that the improvement of the
taste perversion side-effect would not be unexpected in an extended release
formulation of clarithromycin.
Teva has raised a substantial question as to the validity of claim 6 of the ’718
patent and claim 2 of the ’616 patent.9 The district court was correct in concluding that
Teva had also raised a substantial question as to invalidity of claim 2 of the ’616 patent
and, therefore, claim 2 cannot provide an alternative grounds for affirming the
preliminary injunction. Furthermore, as discussed above, Teva has raised a substantial
question as to the validity of claims 2 and 4 of the ’718 patent. As a result it has raised
a substantial question of validity with each of the asserted claims but as in
Amazon.com, our decision today in no way resolves the ultimate question of invalidity.
Nonetheless, for the purposes of the preliminary injunction Abbott as the moving party
has not established a likelihood of success on the merits.
IV.
Turning now to the other factors in a motion for preliminary injunction, the district
court concluded that Abbott established irreparable harm. See eBay, Inc., 126 S. Ct. at
1839 (“According to well-established principles of equity, a plaintiff seeking a permanent
injunction must satisfy a four-factor test before a court may grant such relief. . . . These
familiar principles apply with equal force to disputes arising under the Patent Act.”). The
district court presumed Abbott would suffer irreparable harm absent the injunction
9
Other arguments as to obviousness may also have merit such as
arguments relating to inherency. See, e.g., In re Wiseman, 596 F.2d 1019 (CCPA
1979). But as the arguments relating to unexpected results demonstrate the
vulnerability of the claims to invalidity, we do not reach these other, related obviousness
arguments.
05-1433 28
because of its conclusion regarding likelihood of success on the merits. Furthermore,
and in addition to the presumption, the district court considered Abbott’s economic
consequences of denying the injunction and it concluded that “entry of the generic
extended release formulation competitor will likely crush the market.” Abbott Labs., slip
op. at 27. On appeal the parties dispute whether the district court properly concluded
that Abbott would suffer irreparable harm if the injunction were not issued. Teva argues
that any harm that Abbott may suffer could be remedied by monetary compensation.
Abbott responds by contending that the sharp economic consequences of open
competition from generic drugs establish the inadequacy of monetary damages and
irreparable harm.
First, as noted above, we conclude that Abbott has not established a likelihood of
success on the merits. As a result, Abbott is no longer entitled to a presumption of
irreparable harm. See Reebok Int’l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1556 (Fed. Cir.
1994). And as to Abbott’s economic arguments, we do not doubt that generic
competition will impact Abbott’s sales of Biaxin XL, but that alone does not establish
that Abbott’s harm will be irreparable. As we stated in Illinois Tool Works, Inc. v. Grip-
Pak, Inc., if this court were to accept a patentee’s “argu[ments] that, ‘apart from the
presumption,’ its ‘potential lost sales’ alone demonstrate ‘manifest irreparable harm’,
acceptance of that position would require a finding of irreparable harm to every
manufacturer/patentee, regardless of circumstances.” 906 F.2d 679 (Fed. Cir. 1990).
On the other hand, we also note that the district court found that “the parties’ models of
how the market will react to generic competition for extended release clarithromycin
remain highly speculative” and Teva has not proven that monetary damages will suffice.
05-1433 29
Abbott Labs., slip op. at 27. Therefore, where a patentee has not shown a likelihood of
success on the merits, and where the patentee has not clearly established that
monetary damages could not suffice but the defendant has not established that
monetary damages do suffice, we cannot say that the irreparable harm prong of the
analysis favors either party.
As to the third prong of the analysis, the district court stated that Teva was
“reluctan[t] or inab[le] to quantify the hardship, if any, it will face if an injunction is
incorrectly entered” and “there is little choice but to conclude that the balance of
hardships favors [Abbott].” Abbott Labs., slip op. at 30-31. As Teva does not appeal
this issue, we also conclude that the district court properly found that the balance of
hardships favors Abbott.
Lastly, as to the public interest factor, the district court determined that “[t]o the
extent that this court has found that the patents in suit are valid, the public interest is
best served by enforcing them.” Id., slip op. at 32. Although the public interest inquiry
is not necessarily or always bound to the likelihood of success of the merits, in this case
absent any other relevant concerns, we agree with the district court that the public is
best served by enforcing patents that are likely valid and infringed. As Abbott did not
establish a likelihood of success on the merits, we conclude that the public interest is
best served by denying the preliminary injunction.
V.
First, in determining Abbott’s likelihood of success on the merits, the district court
clearly erred in assessing the content of the prior art. The prior art supports Teva
arguments and Teva has raised a substantial question regarding the validity of claims 2,
05-1433 30
4, and 6 of the ’718 and claim 2 of the ’616 patent. We conclude that Abbott has not
established a likelihood of success on the merits and this supports denying the
injunction. Second, absent the presumption of irreparable harm and in light of the
arguable sufficiency of monetary damages, Abbott has not established that irreparable
harm supports the grant of the injunction. Third, as the issue was uncontested, the
balance of hardship still supports the grant of the injunction. Fourth and lastly, as a
substantial question of patent validity has been raised by Teva, the public interest
benefits from a denial of the injunction. As result of these considerations, we vacate the
preliminary injunction.
VACATED
05-1433 31
United States Court of Appeals for the Federal Circuit
05-1433
ABBOTT LABORATORIES,
Plaintiff-Appellee,
v.
ANDRX PHARMACEUTICALS, INC.,
and ROXANE LABORATORIES, INC.,
Defendants,
v.
TEVA PHARMACEUTICALS USA, INC.,
Defendant-Appellant.
NEWMAN, Circuit Judge, dissenting.
It has been confirmed that the remedy of injunction in patent cases is subject to the
sound discretion of the district court, upon application of the traditional criteria by which
injunctive relief is evaluated and applied. eBay, Inc. v. MercExchange, L.L.C., 126 S. Ct.
1837, 1841 (2006) ("We hold only that the decision whether to grant or deny injunctive relief
rests within the equitable discretion of the district courts, and that such discretion must be
exercised consistent with traditional principles of equity, in patent disputes no less than in
other cases governed by such standards.")
These traditional principles are no less applicable when a preliminary injunction is at
issue, particularly when the purpose is to preserve -- not to change -- the relationship of the
litigants during the litigation. "The purpose of a preliminary injunction is to preserve the
relative positions of the parties until a trial on the merits can be held." Univ. of Texas v.
Camenisch, 451 U.S. 390, 395 (1981); Smith Int'l, Inc. v. Hughes Tool Co., 718 F.2d 1573,
1578 (Fed. Cir. 1983) ("A preliminary injunction will normally issue only for the purpose of
preserving the status quo and protecting the respective rights of the parties pending final
disposition of the litigation.") Precedent counsels against making an important change in
the relationship of the parties while their dispute is being litigated, while recognizing that
there may be circumstances warranting such change, when all of the legal and equitable
aspects relevant to a particular case are considered. See, e.g., Mikohn Gaming Corp. v.
Acres Gaming, Inc., 165 F.3d 891, 895 (Fed. Cir. 1998) (the preliminary injunction serves to
preserve the status quo "lest one side prevent resolution of the questions or execution of
any judgment by altering the status quo"); Globetrotter Software, Inc. v. Elan Computer
Group, Inc., 236 F.3d 1363, 1367 (Fed. Cir. 2001).
The trial court's decision with respect to the discretionary grant of a preliminary
injunction warrants significant deference, for equitable considerations weigh heavily in
matters of change or stability pendente lite. See Deckert v. Independence Shares Corp.,
311 U.S. 282, 290 (1940) ("'It is well settled that the granting of a temporary injunction,
pending final hearing, is within the sound discretion of the trial court; and that, upon appeal,
an order granting such an injunction will not be disturbed unless contrary to some rule of
equity, or the result of improvident exercise of judicial discretion.'"); Meccano, Ltd. v. John
Wanamaker, New York, 235 U.S. 136, 141 (1920) ("The correct general doctrine is that
whether a preliminary injunction shall be awarded rests in sound discretion of the trial
court."). It is particularly irregular for an appellate court to reverse this discretionary
05-1433 2
decision and thereby to make a significant change in the relationship of the parties, while
presenting no explanation of how the district court abused its discretion.
Reversal of a preliminary injunction that preserves the status quo requires a clear
showing that the district court exceeded its discretionary authority. See We Care, Inc. v.
Ultra-Mark Int'l Corp., 930 F.2d 1567, 1570 (Fed. Cir. 1991) ("The court's determination can
be overturned only on a showing that it abused its discretion, committed an error of law, or
seriously misjudged the evidence.") My colleagues do not discuss the trial judge's careful
explanations, but, upon finding that Teva has raised a "substantial question" about patent
validity, they hold that Teva should be permitted to practice the Abbott invention before
patent validity is decided. With all respect to my colleagues' concerns, they misapply not
only the criteria of the preliminary injunction but also the standard of appellate review:
First, as to patent validity, the panel majority rejects the requirement that in
determining the likelihood that the patent will be proved invalid it is necessary to consider
the burdens of proof that would inhere at trial. See Canon Computer Sys., Inc. v. Nu-Kote
Int'l., Inc., 134 F.3d 1085, 1088 (Fed. Cir. 1998) ("However, a patent is presumed valid, and
this presumption exists at every stage of the litigation. "); Genentech, Inc. v. Novo Nordisk,
A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997) (criterion "substantial questions of validity"
means that "in light of the presumptions and burdens that will inhere at trial on the merits"
the attacker has "a likelihood of success" in invalidating the patent); PPG Indus., Inc. v.
Guardian Indus., Inc., 75 F.3d 1558 (Fed. Cir. 1996) ("The ultimate question, however, is
whether the challenger's evidence of invalidity is sufficiently persuasive that it is likely to
overcome the presumption of patent validity.") In the case now before us the district court
analyzed the evidence, in which technologically complex questions are presented, and
05-1433 3
concluded that Teva was not likely to prove the patent invalid by clear and convincing
evidence. In contrast, the panel majority holds that if the attacker raises no more than a
"substantial question" of invalidity, that suffices to establish the likelihood that the attacker
will succeed on the merits. That is incorrect in law and in procedure.
Next, even as the panel majority states its agreement with the district court's finding
that "the balance of hardships favors Abbott," maj. op. at 30, the majority declines to weigh
this factor in its decision. See Chrysler Motor Corp. v. Auto Body Panels of Ohio, Inc., 908
F.2d 951 (Fed. Cir. 1990) ("Our rule regarding whether a preliminary injunction should be
granted or denied is that the trial court should weigh and measure each of the four factors
against the other factors and against the magnitude of the relief requested."). Abbott points
out that the status quo ante will not easily be recoverable if interim infringement is
authorized; Abbott also points out that there is no patent barrier to Teva's entry into
commerce with its own extended release formulation instead of that of Abbott, for the basic
patent on clarithromycin has expired. Thus the panel majority again applies a flawed
methodology, for "Where it is clear that the moving party will suffer substantially greater
harm by the denial of the preliminary injunction than the non-moving party would by its
grant, it will ordinarily be sufficient that the movant has raised 'serious, substantial, difficult
and doubtful' questions that are the proper subject of litigation." Ugine-Savoie Imphy v.
United States, 121 F. Supp.2d 684, 689 (Ct. Int'l Trade 2000). The district court's
consideration of this aspect was proper, and warrants appellate deference.
Next, the panel majority states that the question of the sufficiency of money
damages is "arguable" -- ignoring the district court's finding that this aspect may also favor
Abbott. Instead, the majority opinion announces that this aspect will not be considered at
05-1433 4
all. On this accumulation of flaws, and with no reference to the district court's well
reasoned opinion, my colleagues reverse the preliminary injunction, change the status quo,
and authorize infringement before validity is decided. I must, respectfully, dissent.
The Considerations Pendente Lite
At issue are claims 2, 4, and 6 of U.S. Patent No. 6,010,718 (the '718 patent) and
claim 2 of U.S. Patent No. 6,551,616 (the '616 patent). The claims are directed to an
extended-release formulation of erythromycin in a polymer matrix, and require that the
minimum plasma concentration for the extended release formulation is substantially
equivalent to that of the immediate release formulation; that is, the drug is released so as to
be present in the plasma at the same minimum level for both the immediate release and
extended release formulations, and with less fluctuation for the extended release product.
In the challenge to validity, Teva and Abbott both presented extensive argument and
briefing, citing various references. The district court, explaining its decision on the question
of Teva's likelihood of success in proving the patents invalid, analyzed the evidence and
concluded:
This court finds that Teva has failed to raise a substantial question as to the
validity of Abbott's claims 2 and 4. The prior art cited by Teva discloses
discrete portions of the asserted claims, but Teva fails to demonstrate that
this would be sufficient to give a person of ordinary skill in the art a
reasonable expectation of success. Teva's prior art references reveal that
using HPMC was a logical line of inquiry but the dissimilarities between the
drugs with which HPMC had been successfully combined and clarithromycin
defeat Teva's claim of obviousness.
The district court included discussion of the issues and arguments presented by the parties,
remarked on the uses of various known release agents, and the unpredictability of
achieving successful extended release as to any particular product. The record shows
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discussion at the district court that the metabolic pathway of the active ingredient must be
determined, as well as the physical and chemical properties and physiologic behavior and
effectiveness of the metabolites and their interaction with the materials in the extended
release formulation. The record shows discussion at the district court of the need for
extended release performance that will produce an effective drug exposure in the
bloodstream over the entire release period, and the unpredictability of this performance.
The record shows discussion of the non-linear pharmacokinetics1 exhibited by
clarithromycin. The district court explained its decision that Teva had not shown that it was
likely to prove invalidity of the claimed formulations:
This court is mindful of the Federal Circuit's warning about the risk of the
"hindsight trap," or the post facto belief that an invention, which seems
obvious once created, would have been obvious to people skilled in the art at
the time. Abbott has provided ample evidence that its invention was not
obvious and that there were many other extended release formulation
methods known in the prior art. In fact, the existence of alternate methods
and the attempted exploitation of some of those methods provide secondary
considerations of nonobviousness. These factors suggest that there was a
long-felt need for the invention, that others, including Abbott, initially failed to
develop the invention, and go a long way to account for the commercial
success that Abbott has unquestionably enjoyed with its BIAXIN XL product.
The panel majority does not discuss, and assigns no flaw, to the district court's refusal to
apply judicial hindsight; nonetheless, the majority applies such hindsight for itself, starting
with the template of the Abbott invention and then selecting portions of references to
1 Abbott explains that "non-linear" here means that the amount of drug in the
blood is not directly proportional to the dosage amount, but increases disproportionately
with higher doses. This is not a characteristic of azithromycin, the product whose
formulation is relied on by the panel majority, as discussed infra.
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reconstruct the invention within that template. To guard against such incorrect analysis,
precedent teaches that references cannot be selected, and selected elements from
selected references cannot be combined, without some suggestion, motivation, or teaching
that would make obvious that selection and that combination. See, e.g., Karsten Mfg.
Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1385, 58 USPQ2d 1286, 1293 (Fed. Cir. 2001)
("In holding an invention obvious in view of a combination of references, there must be
some suggestion, motivation, or teaching in the prior art that would have led a person of
ordinary skill in the art to select the references and combine them in the way that would
produce the claimed invention."); Brown & Williamson Tobacco Corp. v. Philip Morris Inc.,
229 F.3d 1120, 1124-25 (Fed. Cir. 2000) ("a showing of a suggestion, teaching, or
motivation to combine the prior art references is an 'essential component of an obviousness
holding'").
The panel majority acknowledges the law, but finds a motivation to make the claimed
formulation by combining the information in Abbott's prior art Patent No. 5,705,190, which
shows extended release formulations of clarithromycin and azithromycin in "alginate," a
known release agent derived from seaweed, with a Pfizer publication designated WO
95/30422, which shows the HPMC (hydroxypropyl methyl cellulose) of the '718 patent used
with azithromycin. Abbott stated at the preliminary injunction hearing that what works for a
product in an alginate matrix is not predictably applicable to other products; this statement
was not contradicted. The district court analyzed the interchangeability of clarithromycin
and azithromycin, stating:
The questions are: how similar and dissimilar are the two molecules; and
what are the implications of these similarities and dissimilarities to a person
of ordinary skill in the art in light of prior art at the time of the invention.
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Specifically, would a person of ordinary skill in the art have had a reasonable
expectation of success in creating an extended release formulation of
clarithromycin using a hydrophilic water-soluble polymer based on the prior
art, including the '422 patent for an extended release formulation of
azithromycin with such a polymer?
The court concluded that they were not so similar as to be interchangeable in the context of
polymers like HPMC, correctly rejecting the argument that "obvious to try" can establish
obviousness. The court stated:
Teva's prior art references reveal that using HPMC was a logical line of
inquiry but the dissimilarities between the drugs with which HPMC had been
successfully combined and clarithromycin defeat Teva's claim of
obviousness.
My colleagues ignore the district court's analysis, offering neither deference nor
acknowledgment. Instead, the panel majority explains that its finding of likelihood of
success in proving obviousness is supported "not by what the '190 patent discloses but
what it does not disclose" (emphasis in maj. op.), proposing that: "Abbott has represented
to the U.S. Patent and Trademark Office that the differences between clarithromycin and
azithromycin were such that azithromycin could be substituted into a controlled release
clarithromycin composition by a person of ordinary skill in the art without undue
experimentation." Maj. op. at 17-18. Thus my colleagues conclude that claim 4 of the '718
patent is "vulnerable to allegations of invalidity," and find "a substantial argument" as to
other claims. These are not the criteria of likelihood of success.
Reversible error has not been shown in the district court's analysis, and no basis
whatsoever has been shown for overturning the court's discretionary decision to preserve
the status quo while the matter is litigated. Even if Teva had raised a substantial argument,
as my colleagues find, the criteria of abuse of discretion have not been met. To support a
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change in the status quo before the merits are decided, it must be shown to be likely that
the patent will be held invalid under the presumptions and burdens in effect at trial. The
panel majority is incorrect in holding that it "require[s] less proof" to authorize infringement
before the merits are decided; such a rule, whereby a patent is deprived of exclusivity
during litigation, is not readily invoked, for it is excessively disruptive of the processes of
law. As the Court said in eBay v. MercExchange: "As this Court has long recognized, 'a
major departure from the long tradition of equity practice should not be lightly implied.'" 126
S. Ct. at 1839 (quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 320 (1982)).
Conclusion
The district court's conclusion as to the challenger's likelihood of success in
invalidating all of the claims in suit, and the district court's view of the balance of harms, are
well reasoned and fully supported by precedent. The district court's ruling, preserving the
status quo during litigation, warrants, and requires, our deference. From my colleagues de
novo and incorrect contrary ruling, I must, respectfully, dissent.
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Abbott Laboratories v. Andrx Pharmaceuticals, Inc.
Court: Court of Appeals for the Federal Circuit
Date filed: 2006-06-22
Citations: 452 F.3d 1331
Copy CitationsCombined Opinion