In Preliminary Injunction Decision, CAFC Forecasts Post-eBay Jurisprudence

Sanofi v. Apotex (Fed. Cir. 2006)

Generic manufacturer Apotex wants to make something similar to Sanofi’s Plavix (clopidogrel bisulfate) and filed an ANDA alleging that Sanofi’s patents were invalid.

The two parties worked together to negotiate a settlement.  The agreement, however, was not accepted by state attorneys general even after new terms were presented. Under provisions of the agreement, the regulatory denial killed the settlement and the parties resumed litigation.

Sanofi then filed a motion for preliminary injunction to stop Apotex from selling its product. Within 21 days, the district court issued a PI. (During that time, Apotex shipped six-months of product). Apotex then appealed the PI.  Preliminary injunction jurisprudence has its own four-factor test that is similar to that of permanent injunctions. The plaintiff must show:

• Reasonable likelihood of success on the merits of the case;
• Irreparable harm if an injunction is not issued;
• Balance of hardships tipped in favor of the plaintiff; and
• Public interest that is not negatively impacted.

The major difference between the factors for consideration in preliminary injunctive relief and those for permanent relief is that preliminary relief requires a showing of a likelihood of success while permanent relief requires success on the merits as a precondition. Thus, the final three factors will give some indication of how the court will rule in post-eBay injunction cases.

Likelihood of success on the merits: Apotex took the odd position of arguing anticipation based on a broadly worded claim of a prior art patent that was examined during prosecution.  The CAFC confirmed that this made the burden of proving invalidity at trial “especially difficult.”  On obviousness, the CAFC confirmed that the unpredictability of enantiomer activity made the claimed dextrorotatory formation nonobvious even if the molecule as a whole was known.

On Irreparable Harm: The settlement agreement between the parties included a provision that capped any damages for infringement by Apotex — seemingly an admission that Sanofi would settle for money damages. The court did not buy-into this argument, but only because of the technicality that the agreement also contemplated an injunction.

Balance of hardships tip entirely in Sanofi’s favor because Apotex chose to launch its product under threat of injunctive relief.  It could have avoided the situation altogether and thus should not benefit from this factor.

Public Interest: The CAFC continued its line of the “importance of the patent system in encouraging innovation.” Interestingly, the court focuses on how the expense of pharmaceutical inventions necessitates strong patent protection. . . . begging the question of whether less expensive innovations (such as software) have less of a public interest in strong patent protection.

Comments

[Len Storch]

Thinking about eBay, does anyone have any thoughts on Merc’s: “MOTION for Permanent Injunction by Mercexchange, L.L.C.. (jcow,) (Entered: 08/29/2006)” (Merc v eBay, U.S. District Court Eastern District of Virginia (Norfolk), Document #615, case 01cv00736)?

[anonymous]

On the "public interest" point, whenever the question of why we have patents comes up, pharmaceuticals is the first thing that comes to mind as an example of the response. Pharmaceuticals require a large up-front investment, and there's a strong argument to be made that fewer would be invented and produced without patent protection. I wonder to what extent this is true in other fields (not just software and business methods). I've heard the same argument made with some force in the electronics field, and people I know say that without patents, smaller companies would be unable to compete with established, larger companies....

Also, give Judge Lourie's background, he may have a particular appreciation for chemical patents.

[Carlos]

"On obviousness, the CAFC confirmed that the unpredictability of enantiomer activity made the claimed dextrorotatory formation nonobvious even if the molecule as a whole was known. " - EVERY CHEMIST KNOWS THAT DUE TO THE QUIRAL NATURE OF MOLECULES IN THE HUMAN BODY, ONE ENANTIOMER HAS MUCH MORE (OR MUCH LESS) ACTIVITY/TOXICITY...THAN THE OTHER. IT'S A CLEAR CASE OF LACK OF NOVELTY. IT'S LIKE IGNORING LEFT HAND WHEN REFERRING THE TERM "HANDS".

Carlos Caixado

[Honor]

This certainly makes a good point. I'd like to see the response of others on this topic. Makes interesting reading.
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