Federal Circuit withdraws a preliminary injunction

Abbott Laboratories (\'Abbott\') brought a suit against Teva Pharmaceuticals USA (\'Teva\') claiming patent infringement of its extended release clarithromycin (Biaxin XL). Abbott requested a preliminary injunction against Teva whereby preventing Teva from manufacturing and selling a generic form of the extended release clarithromycin. The District Court granted Abbott's motion but on appeal the Federal Circuit set aside the injunction.Both courts applied the traditional four-prong test to determine if a preliminary injunction is equitable. The Federal Circuit cited the Supreme Court's decision in eBay, Inc. v. MercExchange, L.L.C., the recent case dealing with the standard to be applied when a court decides whether to grant a permanent injunction after a patent has been found valid and infringed, and analogized that case to the preliminary injunction context and the factors that should be considered. The party requesting the injunction must show the following: (1) likelihood of winning on the merits of the case, (2) irreparable harm that will result if the injunction is not granted, (3) balance of hardships weighing in their favor, and (4) public interest best served by granting injunction. Teva did not dispute that its generic extended release formulation infringed Abbott's patents. Instead, they claimed the patents were invalid as obvious. Teva was unsuccessful at the District Court in establishing that an injunctive relief was not warranted. On appeal, the Federal Circuit vacated the preliminary injunction as they did not find that Abbott established a sufficient need for the preliminary injunction. The Federal Circuit determined that Abbott did not establish a likelihood of success on the merits of the infringement claim since Teva raised substantial questions relating to the validity of the patent claims, specifically that a substantial argument existed that the claims would be invalid as obvious in light of the prior art. Teva also presented evidence to show that any harm Abbott would suffer could be remedied with monetary compensation. Abbott could not establish that such monetary damages were insufficient and therefore failed to fulfill the second prong of the test requiring irreparable harm if an injunction was not granted.Teva did not appeal the third prong of weighing the hardships between the parties. Therefore, the Court found that the balancing of hardships favored Abbott. Finally, the Court addressed the public interest factor. Generally the public interest is best served by enforcing patents that are likely to be found valid and infringed. Here, however, because the court found substantial questions existed with regard to the validity of the patents, the Court found that the public interest would be best served by denying the preliminary injunction, as it is not in the public interest to enforce invalid patents.The Court ruled in favor of Teva, vacating the preliminary injunction, allowing the generic drug manufacturer to continue making and selling the generic extended release clarithromycin. However, the ultimate question of patent validity has not been resolved. Judge Newman dissented, arguing that the majority should have been more deferential to the district court's decision to grant the preliminary injunction. Typically, the decision to grant or deny a preliminary injunction is only reversed if there has been an abuse of discretion by the lower court. Here, Judge Newman did not believe the majority set forth how the district court had abused its discretion. Further, she did not believe the majority took into account that patents must be proven invalid by clear and convincing evidence when it considered the likelihood of success prong of the injunction test. Thus, based on the deferential standard of review and Teva's burden of proof to show the patent is invalid, Judge Newman would have affirmed the decision to grant a preliminary injunction.The complete opinion can be found at http://fedcir.gov/opinions/05-1433.pdf


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