Collateral Estoppel Does Not Extend to Preliminary Injunction Findings

Abbott Labs v. ANDRX (Fed. Cir. 2007).

The district court granted a preliminary injunction to stop Andrx from selling extended release clarithomycin as a generic version of Biaxin XL. Andrx appealed.

Four factors for preliminary relief: (1) Likelihood of success on the merits; (2) irreparable harm from failing to issue a PI; (3) balance hardships of the parties; and (4) public interest.

Collateral Estoppel: Oddly, the same district court granted Abbott’s PI motion against two other defendants because the patents looked invalid. On appeal Andrx argued that, as in Blonder-Tongue, “Abbott cannot assert patents against one party which have been found to be invalid or unenforceable against another party.”

The CAFC found that collateral estoppel does not apply here because the earlier discussion of validity and enforceability had not been fully and finally litigated in the other cases. (Applying Seventh Circuit law).

Vitiation: Andrx also argued that the PI should not issue because its generic does not infringe — either literally or under the doctrine of equivalents. Under DOE analysis, the Andrx product included a pharmaceutically acceptable glyceryl monostearate rather than the claimed “pharmaceutically acceptable polymer." Andrx argued that a GST equivalent would vitiate the polymer requirement. The CAFC, however, found that the two could be equivalent — falling in-line with the common notion that adjectives are subject to vitiation more often than nouns.

Notes: One thing that is unclear is why the court did not discuss the merits of the invalidity factor of the PI decision rather than focusing solely on the collateral estoppel issue.

Comments

[Paul F. Morgan]

How could a CAFC decision on injuctions not even mention the now controlling eBay Sup. Ct. decision? That decision should apply even more strongly to PRELIMINARY injunctions.

[Mike Seyhorn]

Paul, why do you think eBay should apply more strongly to preliminary injunctions?

[Malcolm Mooney]

The CAFC, however, found that the two could be equivalent — falling in-line with the common notion that adjectives are subject to vitiation more often than nouns.

Is this just a "common notion" or has it been established empirically?

[Kevin E, Noonan]

I think a reasonable distinction with eBay is that a preliminary injunction carries with it a bond that should make whole the enjoined party should it be determined that the injunction was improvidently granted. Not so a permanent injunction and so in the absence of a remedy permanent injunctions should be more parsimoniously granted.

[Paul F. Morgan]

The suggestion that preliminary injunctions should be granted more easily than permanent injunctions is not supported by other CAFC case law, or the statute. Furthermore, even if there is an appeal bond that will actually be paid after a reversal by a sufficently solvent patent owner, will that be truely compensatory, and good public policy, for putting a defendant entirely out of business before any trial on either infringement or patent invalidity? Do you really think the unanimous eBay Sup. Ct. Justices ever intended that to be done without the lower courts applying any of the factor tests they have now required for permanent injunctions under the same statute?

[Thomason]

The CAFC focused on the collateral estoppel question, instead of the merits, because as the more-recent Transclean decision indicates, collateral estoppel is the flavor of the season around Madison Place.