In its first post-eBay injunction decision, CAFC vacated Abbott's preliminary injunction

Abbott Labs v. Andrx Pharma (Fed. Cir. 2006, 05–1433).

Abbot was awarded a preliminary injunction (PI) against Teva to stop alleged infringement of its patents relating to extended release clarithromycin. The CAFC reviewed that holding for abuse of discretion or clear error. 

Looking at the prior art, the lower court found no motivation to combine several prior art references that discussed azithromycin rather than clarithromycin.  On appeal, the CAFC found the motivation in the form of an implicit admission made by Abbott in one of its prior patents.  In that prior patent, the specification discussed only clarithromycin, but the claims were directed at both azithromycin and clarithromycin. 

Because the [earlier Abbott] 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.

Based on the earlier Abbott patent, the CAFC found a substantial argument that a jury could find a motivation to combine the references with a reasonable expectation of success.

Regarding potential irreparable harm, the CAFC held that direct competition “alone does not establish that Abbott’s harm will be irreparable.” 

And, on the question of public interest, the appellate panel “agree[d] with the district court that the public is best served by enforcing patents that are likely valid and infringed.”  But, because of the chance that Abbott’s patents are invalid, the panel concluded “that the public interest is best served by denying the preliminary injunction.”

In dissent, Judge Newman argued that the majority opinion constituted de novo rule and did not give significant deference to the lower court — as is required by law.

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.

Newman argues that the criteria used by the majority for determining likelihood of success on the merits were not correct:

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.

Comments

[Fredric Goldstein]

Hurray once again for Judge Newman, increasingly the sole voice of reason on the CAFC and its vigilent guardian of precedent, even if in dissent less successful than needed. Her dissents, probably totaling more than all her colleagues combined, are always good reading with an impeccable attention to logic and respect for precedent. If only there were more judges of her caliber on that court, we would most likely have a more stable (and logical) patent system.

As a aside on this recent issue of a permanent injunction, whatever happened to the statutory "right to exclude others from making, using, offering for sale, or selling, the [invention]"? Should the US Government add the qualifier to the patent "but only if we turn out not to have issued (or look like we might have issued) an invalid patent"? Where in the statute does it discuss the burden of proof on the patent holder to enforce this exclusionary right, e.g. he makes his own products, he is a direct competitor, he will be harmed, etc.?

[Patrick]

I would be inclined to agree that Judge Newman's argument is much more persuasive. In particular, her argument that the majority finds motivation to combine from "what [the reference] does not disclose" is right on point.

Is the majority essentially saying that if one skilled in the art could successfully combine reference "A" and reference "B" without undue experimentation, the invention is obvious?

I would argue that this violates section 103's statement that "Patentability shall not be negatived by the manner in which the invention was made."

"Sorry, Mr. Inventor, but since no undue experimentation was needed to disclover your claimed invention, your device fails 'to reveal the flash of creative genius.'"

[Lachlan]

Judge Newman's reasonsing is (interestingly) more in line with other common law jurisprudence (eg English, Australian and Canadian).
The preliminary injunction is not designed to be a mini-trial, so why should all other factors be influenced so strongly by a moveants ultimate likelihood of success on the merits?
The preliminary injunction is, in effect, a procedural tool designed to prevent injustice where damages could not remedy the damage caused in the period before a final determination of the merits of the case: ie it issues to make up for the failure of damages to adequately compensate a successful plaintiff. It is for these reasons that the Supreme Court in Ebay v MercExchange reminded the Ditrict and Appellate courts that the remedy is discretionary; This discretion to be exercised in accordance with principles of Equity so that injustice can be prevented. The flexible, not rule-like nature of the remedy, enables it to fulfill its role of preventing injustice before a final determination of rights.
Generally, in order to best prevent injustice in cases where a generic competitor seeks to enter a patentee's market, it will be necessary, as Judge Newman emplores, to preserve the status quo. Judge Newman is correct in reprimanding her collegeagues for so easily disturbing the status quo where Judge Coar did not see fit to.