Abbott Laboratories v. Sandoz, Inc.
Full Opinion (html_with_citations)
Opinion for the court filed by Circuit Judge NEWMAN, in which Circuit Judge ARCHER concurs in the judgment and joins except as to Parts I and VI. Dissenting opinion filed by Circuit Judge GAJARSA.
This appeal is from the grant of a preliminary injunction, pending final resolution of the several challenges raised by Sandoz, Inc. to the validity, enforceability, and infringement of the Abbott Laboratories patents in suit.
BACKGROUND
This suit concerns two Abbott Laboratories patents on extended release formulations of the antibiotic drug clarithromycin, sold by Abbott with the brand name Biax-inÂŽXL. The patent on clarithromycin itself expired in 2005; only extended release formulations are at issue. The purpose of the extended release formulation is to extend the period of drug effectiveness after ingestion and thereby to reduce the requisite frequency of dosage. Sandoz filed an Abbreviated New Drug Application (ANDA) for its extended release formulation of clarithromycin; the Food and Drug Administration approved the ANDA on August 25, 2005, and on September 16, 2005 Abbott filed suit in the United States District Court for the Northern District of Illinois, charging Sandoz with infringement of United States Patent No. 6,010,718 (the '718 patent) and Patent No. 6,551,616 (the '616 patent). Abbott also charged in
The '718 patent claims an extended release pharmaceutical composition comprising an erythromycin derivative and a phar-maceutically acceptable polymer, whereby after ingestion certain specified parameters of drug bioavailability are met. Claims 1, 4, and 6 of the '718 patent are in suit:
1. 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 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 er-ythromycin derivative.
4. 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 concentrations are substantially equivalent to that of the immediate release pharmaceutical composition.
6. An extended release pharmaceutical composition comprising an erythromy-cin derivative and a pharmaceutically acceptable polymer, the composition having an improved taste profile as compared to the immediate release formulation.
The '616 patent is a continuation-in-part of the '718 patent, with claims directed to the method of reducing gastrointestinal side effects. Claim 2 is in suit, shown with claim 1 from which it depends:
1. A method of reducing gastrointestinal adverse side effects comprising administering an effective amount of extended release pharmaceutical composition comprising an erythromycin derivative and a pharmaceutically acceptable polymer.
2. The method according to claim 1, wherein the erythromycin derivative is clarithromycin.
In response to the charge of infringement Sandoz presented the defenses of invalidity based on anticipation and obviousness, unenforceability based on inequitable conduct, and noninfringement. This appeal is from the district courtâs grant of Abbottâs motion for a preliminary injunction, preserving the status quo during the pen-dency of this litigation. Sandoz challenges the district courtâs rulings on all issues.
I
VALIDITY ISSUES
The district court reviewed the factors relevant to the grant or denial of a preliminary injunction, viz., (1) likelihood of success on the merits of the underlying litigation, (2) whether irreparable harm is likely if the injunction is not granted, (3) the balance of hardships as between the litigants, and (4) factors of the public interest. See Oakley, Inc. v. Sunglass Hut Intâl, 316 F.3d 1331, 1338-39 (Fed.Cir.2003); H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387-88 (Fed.Cir.1987). At the stage of the preliminary injunction, before the issues of fact and law have been fully explored and finally resolved, â[t]he
On appellate review of the grant of a preliminary injunction, the question âis simply whether the issuance of the injunction constituted an abuse of discretion.â Doran v. Salem Inn, 422 U.S. 922, 932, 95 S.Ct. 2561, 45 L.Ed.2d 648 (1975). âIt 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.â Deckert v. Independence Shares Corp., 311 U.S. 282, 290, 61 S.Ct. 229, 85 L.Ed. 189 (1940). Abuse of discretion is established âby 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.â Novo Nordisk of North Amer-ica, Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed.Cir.1996). See Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1460 (Fed.Cir.1998) (en banc) (âA district court abuses its discretion when its decision is based on clearly erroneous findings of fact, is based on erroneous interpretations of the law, or is clearly unreasonable, arbitrary or fanciful.â).
Sandoz assigns legal error to the district courtâs rulings that Abbott is likely to prevail on the issues of validity, infringement, and inequitable conduct, and states that the district court abused its discretion in balancing the equities and granting the injunction.
Anticipation
âAnticipationâ in patent usage means that the claimed invention was previously known and described in a printed publication, explicitly or inherently. Anticipation is established by documentary evidence, and requires that every claim element and limitation is set forth in a single prior art reference, in the same form and order as in the claim. See In re Omeprazole Patent Litigation, 483 F.3d 1364, 1373 (Fed.Cir.2007); Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1267 (Fed.Cir.1991). An anticipating reference must enable that which it is asserted to anticipate. Omeprazole, 483 F.3d at 1378 (âTo âanticipate,â the identical subject matter must not only be previously known, but the knowledge must be sufficiently enabling to place the information in the possession of the public.â); Elan Pharmaceuticals, Inc. v. Mayo Found. for Medical Educ. & Research, 346 F.3d 1051, 1054 (Fed.Cir.2003) (same).
Sandoz argued that the '718 patent is anticipated by European Patent Publication No. 0,280,571 B1 (the '571 Publication), which describes âa sustained release matrix formulation in tablet form comprising from 0.1% by weight to 90% by weight of an antimicrobial agent selected from ... erythromycin ... from 5% by weight to 29% by weight of a hydrophilic polymer, and from 0.5% by weight to 25% by weight of an acrylic polymer....â The '571 Publication states that hydrophilic polymers such as hydroxypropylmethyl cellulose (HPMC) can be used to form a hydrophilic matrix which ârespond[s] to increases in pH with a corresponding increase in the permeability of the dosage form.â Sandoz argued in the district court that although the '571 Publication does not mention clar-ithromycin or the specific pharmacokinetic limitations in the '718 patent claims, the '571 Publication anticipates the '718 claims because clarithromycin is an erythromycin derivative and the claimed pharmacokinetic limitations are inherent in the extended release compositions of the '571 Publication. Sandoz also argued that enablement
Abbott responded that the '571 Publication cannot âanticipateâ because it does not show the elements of the claims of issue; it does not mention clarithromycin, it does not disclose the pharmacokinetic criteria stated in the '718 claims, and it does not enable these limitations, either expressly or inherently. Abbott argued that significant experimentation would be required to ascertain the applicability of any release agent from the large number of release agents mentioned in the '571 Publication, particularly as applied to a different biological product having different dissolution and metabolic characteristics. Thus Abbott argued that the legal criteria of âanticipationâ are not met by the '571 Publication.
The district court found that Sandoz did not present evidence sufficient to support its argument that âthe '571 Publicationâs teachings would enable Abbott to create an extended release of an erythromycin derivative drug simply based on the structural limitations.â Abbott, 500 F.Supp.2d at 840. The district court observed that the '571 Publication âdoes not offer any in vivo dissolution dataâ nor state âthe pharma-cokinetic profile of its own formulations.â Id. The court concluded that Sandoz would not be likely to succeed in establishing anticipation by this reference. We discern no clear error in this conclusion, for the '571 Publication neither describes the product of the '718 claims nor enables the pharmacokinetic properties that are set forth in the '718 claims. See Elan Pharmaceuticals, 346 F.3d at 1057 (an anticipating reference must disclose every element of the claims, and place a person of ordinary skill in possession of the claimed invention).
Obviousness
Sandoz also argued that the claims of the '781 and '616 patents are invalid on the ground of obviousness, in view of the combination of the '571 Publication with PCT Application WO 95/30422 (the PCT or '422 Application) and United States Patent No. 5,705,190 (the '190 patent).
In determining, for preliminary injunction purposes, the likelihood that patent invalidity would be established at trial, the district court evaluates the factual and legal arguments in light of the presumptions and burdens that will inhere at trial, viz., that â[a] patent shall be presumed valid.... The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.â 35 U.S.C. § 282. This burden âexists at every stage of the litigation.â Canon Computer Systems, Inc. v. Nu-Kote Intâl, Inc., 134 F.3d 1085, 1088 (Fed.Cir.1998); see Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1374 (Fed.Cir.2006) (taking into account the applicable presumptions and burdens in reviewing the grant of a preliminary injunction). Sandoz on this appeal relies on the Supreme Courtâs decision in KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007), Sandoz arguing that the law of obviousness has been significantly changed, and that the district court did not give adequate recognition to the changed law. The district court had issued its initial decision granting the preliminary injunction shortly before the Courtâs decision in KSR. The court then requested supplemental briefing and argument, and issued a further opinion discussing the issues in light of KSR and continuing to conclude that Abbott was likely to prevail on the merits of the question of obviousness.
In its initial decision the district court discussed the references in detail. The
Sandoz argued that these teachings should be combined with those of the '571 Publication and the '190 patent entitled âControlled Release Formulation for Poorly Soluble Basic Drugs,â which describes a âcontrolled release solid pharmaceutical composition adapted for oral administration comprising: a therapeutically effective amount of at least one basic drug having a water solubility of less than 1 part per 30 parts water ... wherein the basic drug is a macrolideâ and as the release agent a water-soluble alginate salt. The '190 patent names the macrolides erythromycin, clarithromycin, dirithromycin, azithromy-cin, roxithromycin, and ABT-229 for use with the alginate salt release agent. San-doz argued that the subject matter of the '718 patent would have been obvious in view of the '571 Publication showing extended release formulations of erythromy-cin derivatives, in combination with the controlled release formulations and phar-macokinetic properties of azithromycin in the PCT Application, and the modified release alginate salt formulation of clarithro-mycin in the '190 patent. Sandoz argued that a person of ordinary skill in this field would have desired to improve the administration of clarithromycin by finding an extended release formulation having optimum release and biological properties, and would have selected and tested the HPMC from the '571 Publication, in view of the formulation of azithromycin with HPMC in the PCT Application and the '190 patentâs use of an alginate salt to modify the release of clarithromycin. Sandoz stressed that the PCT Application states the known principle of using controlled release formulations to reduce the dosing frequency for short half-life compounds. Sandoz argued that no more than routine experimentation was needed to find a controlled release formulation that would meet the pharma-cokinetic requirements stated in the '718 claims.
Sandoz applied similar arguments to the claims of the '616 patent, stating that the PCT Application teaches that control of azithromycin release reduces gastrointestinal side effects, and that the '190 patent shows the interchangeability of azithromy-cin and clarithromycin in the formulation using an alginate salt. Sandoz argued that this combination of references renders obvious a clarithromycin formulation with reduced gastrointestinal side effects as claimed in the '616 patent. In its supplemental argument based on KSR, Sandoz argued that Abbott merely âpursue[d] known optionsâ for both the '718 and '616 patents, based on the Courtâs exposition that: âWhen there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.â KSR, 127 S.Ct. at 1742.
In the district court Abbott disputed the premises presented by Sandoz, challenged
Abbott stressed that its choice of extended release components is not shown or suggested by the prior art to produce the pharmacokinetic properties of Abbottâs claims. The Court recognized in Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809, 106 S.Ct. 1578, 89 L.Ed.2d 817 (1986) that the district court is not to rely on hindsight, and that âin addressing the question of obviousness a judge must not pick and choose isolated elements from the prior art and combine them so as to yield the invention in question if such a combination would not have been obvious at the time of the invention.â 475 U.S. at 810, 106 S.Ct. 1578. In Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) the Court recognized that the obviousness inquiry must âguard against slipping into use of hindsight and to resist the temptation to read into the prior art the teachings of the invention in issue.â Id. at 36, 86 S.Ct. 684.
Abbott agreed that the basic principles of pharmacokinetics were known, but argued that the limitations in the '718 claims, whereby the bioavailability of the product was characterized, were not shown as achieved in any reference or any combination of references. Abbott pointed out that the PCT Application is directed specifically to azithromycin and shows âscoresâ of possible formulations, all using in vitro data, and does not contemplate metabolite activity in vivo as is manifested for chlorithromycin. Abbott stated that âthe '422 publication discloses more than a dozen possible classes of delivery devices,â Abbott Brief at 42, that âthe '422 publication merely provides in vitro dissolution data for a subset of its disclosed compositions,â and that the formulation in the PCT Application âdid not even have equivalent bioavailability as IR [immediate release] azithromycin.â Id. at 41, 86 S.Ct. 684.
Abbott described in the '718 and '616 specifications that the '190 patent reference presents âC max values [that] are not statistically significantly different from those of the IR formulation.â '718 patent, col. 2, lines 11-12; '616 patent, col. 2, lines 13-14 (referring to Ser. No. 08/574,877, the '190 patent). Abbott stated that Sandoz concedes that the '190 patent does not describe pharmacokinetic limitations based on clarithromycin plasma concentrations, and that neither the PCT Application nor the '190 patent discloses the pharmacoki-netic limitations and properties set forth in the '718 and '616 claims, and that neither the PCT Application nor any other reference provides guidance as to which formulation would provide the pharmacokinetic characteristics required by the '718 claims.
Thus Abbott argued in the district court that a skilled artisan would not have known the effect of substituting clarithro-
_Azithromycin Clarithromycin
Absolute About 34% About 50% from
Bioavailability from 600 mg 250 mg dose _dose_
Pharmacokinetics Linear_Non-linear_
Active Metabolite None reported 14-hydroxy in the clarithromycin Physicians Desk _Reference_
Metabolism Metabolites Extensively possess little or metabolized to an no activity active _metabolite_
About 70 hours 3-4 hours for 250 mg IR dose (14â OH metabolite, _5-6 hours)_ Elimination Half Life
First Pass Effect Not significant Extensive_
Volume of Large-2200 250 litre
Distribution litre
Supplemental Declaration of Dr. Davis, February 7, 2007. The parties do not dispute that the PCT Application describes only in vitro data, and that in vitro data are not predictably transferable to in vivo conditions. Dr. Davis testified that âit simply isnât the case that in vitro controlled release data will automatically correlate with the pharmacokinetic parameters in vivo, and in fact, for many of the formulations of the '422 application, they affirmatively do not so correlate.â Id.
The district court concluded that a person of ordinary skill in this field would not have predicted which formulation, that might be selected from the prior art, would provide the required pharmacokinetics. The district court referred to the dissimilarities in the pharmacokinetic properties for azithromycin as shown in the PCT Application, considered the content of the '190 patent, and concluded that the bioa-vailability of the formulations claimed in the '718 patent were not predictable from these references. The court referred to the testimony of another Abbott expert, Dr. Daniel Weiner, that âthe '190 patent does not disclose any clarithromycin-spe-cific PK [pharmacokinetic] dataâ or âany DFL [degree of fluctuation]
The district court observed that the in vivo azithromycin controlled release formulations in the PCT Application have less total bioavailability than their immediate release counterparts, supporting Abbottâs argument that the behavior of differing biological systems, even when structurally similar, is not predictable. See Alza Corp. v. Mylan Laboratories, 464 F.3d 1286, 1297 (Fed.Cir.2006) (âAlzaâs evidence of in vitro dissolution
In reaching these conclusions, the district court relied on the Federal Circuitâs decision on the same patents in Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 473 F.3d 1196 (Fed.Cir.2007) (herein âAndrxâ). This court, sustaining the district courtâs grant of a preliminary injunction, had concluded that obviousness was not likely to be established, reversing this courtâs prior ruling reversing the grant of a preliminary injunction in Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 452 F.3d 1331 (Fed.Cir.2006) (herein âTevaâ). Sandoz argued to the district court that the Federal Circuitâs ruling in Andrx is incorrect, and on this appeal Sandoz urges us to reject Andrx and reinstate Teva.
In Teva a panel of this court held that the claims of the '718 patent were likely to be held not infringed. This court also stated that there was a substantial likelihood that claim 4 of the '718 patent would be held invalid for obviousness based on the PCT Application together with the '190 patent. This court held that the preliminary injunction should be denied, although the panel cautioned that its ruling âin no way resolves the ultimate question of invalidity.â Teva, 452 F.3d at 1347. In Andrx a later panel of this court, on an enlarged record, rejected the invalidity ruling in Teva and held that the '718 claims were likely to withstand the attack on validity. Andrx, 473 F.3d at 1203-07.
Reviewing this history as applied to San-dozâ arguments herein, the district court explained that this court in Teva had not been made aware of the differences between the pharmacokinetic criteria described in the '190 patent and those of the '718 patent. The district court explained that the pharmacokinetic data in the '190 patent were based on measurements of total antibiotic activity in the body, which includes both clarithromycin and its active metabolite formed after ingestion, whereas the data in the '718 patent are specific to clarithromycin alone. The court found that âAbbott has shown ... that the PK profile of the clarithromycin-metabolite data of the '190 patent formulation was not the same as the PK profile of the clarithro-mycin-only data utilized by the '718 patent,â Abbott, 500 F.Supp.2d at 841.
Sandoz argued, in its supplemental briefing in the district court after the KSR decision, that this courtâs decision in Andrx does not survive scrutiny under the principles set forth in KSR, and stressed that application of KSR renders it âobvious to tryâ the various release agents in the PCT Application, such that any successful composition would be unpatentable, whether or not the results were predictable. Sandoz argued that the '190 patent shows that clarithromycin and azithromycin have similarities as well as differences, and that it would be obvious to experiment to determine which formulations were effective in view of these differences and similarities. Sandoz stressed that the Abbott scientists had knowledge of the prior art including the PCT Application, and that they developed the Abbott formulation in only one month of research effort. Sandoz quoted the Courtâs admonition in KSR that a
The district court, applying KSR, reconsidered its prior determination and framed the question as âwhether an ordinary person skilled in the art would have seen a benefit to combining an erythromycin derivative with a polymer with the same PK [pharmacokinetic] limitations as embodied in claims 1 and 4 of the '718 patent given the state of the pharmaceutical industry at the time.â Abbott, 500 F.Supp.2d at 851. The court concluded: âBased upon what evidence and argument Sandoz offered, the answer was and remains no.â Id. The district court explained that âthis Courtâs preliminary factual findings ... found that Sandoz had not produced evidence indicating that the PK limitations were disclosed in the prior art or were inherent to the structural limitations of the prior art compositions.â Id. at 852. The district court observed that â[t]he KSR opinion only focused on the Federal Circuitâs strict use of the TSM [teaching, suggestion, motivation] test in performing the obviousness analysis; it did not mention or affect the requirement that each and every claim limitation be found present in the combination of the prior art references before the analysis proceeds.â Id. at 852.
We agree that the obviousness of selection of components, when there is no prediction in the prior art as to the results obtainable from a selected component, differs from the issue in KSR, where the Court provided guidance that âa court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.â 127 S.Ct. at 1740. The Court explained the conditions in which âobvious to tryâ may negate patentability, depending on the relation of the prior art teaching to the later-developed technology. The Court explained that when the problem is known, the possible approaches to solving the problem are known and finite, and the solution is predictable through use of a known option, then the pursuit of the known option may be obvious even absent a âteaching, suggestion, or motivationâ concerning that option. Then, âif this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.â 127 S.Ct. at 1742.
Abbott argued that the âknown optionsâ in the prior art were not âfinite, identified, and predictable,â the words of KSR, and are identified only with hindsight knowledge of Abbottâs new formulation and its pharmacokinetic properties. Abbott pointed to the discussion in the PCT Application of over a dozen possible drug delivery modes, including matrix systems, membrane-moderated or reservoir systems, osmotic pumps, coated hydrogel tablets and multi particulates, sustained release compositions with delayed-release layers, pH-dependent coated tablets, bursting osmotic core devices, bursting coated swelling core devices, pH-triggered bursting osmotic core devices, pH-triggered bursting coated swelling core devices, enzyme-triggered supported liquid membrane devices, bac-terially degradable coating devices, and swelling plug devices, all classes of controlled release for drug delivery systems, each containing sub-classes and variations. PCT App. at 8-38. The expert witnesses pointed out the difficulties in predicting the behavior of any composition in any specific biological system.
The evaluation of the choices made by a skilled scientist, when such choices lead to the desired result, is a challenge to judicial
Slight reflection suggests, we think, that there is usually an element of âobviousness to tryâ in any research endeavor, that is not undertaken with complete blindness but rather with some semblance of a chance of success, and that patentability determinations based on that as the test would not only be contrary to statute but result in a marked deterioration of the entire patent system as an incentive to invest in those efforts and attempts which go by the name of âresearch.â
Id. at 931. The Court in KSR did not create a presumption that all experimentation in fields where there is already a background of useful knowledge is âobvious to try,â without considering the nature of the science or technology. The methodology of science and the advance of technology are founded on the investigatorâs educated application of what is known, to intelligent exploration of what is not known. Each case must be decided in its particular context, including the characteristics of the science or technology, its state of advance, the nature of the known choices, the specificity or generality of the prior art, and the predictability of results in the area of interest.
The district court discussed the differences between the pharmacokinetic properties shown in the '190 patent reference and the properties in the '718 patent claims, the differences in the chemical and biological properties of azithromycin and clarithromycin, the differences between in vitro and in vivo data, and the differences between azithromycin and clarithromycin. For example, Abbottâs expert Dr. Davis stated that âthe absorption of clarithromy-cin is affected by a phenomenon know as the âfirst pass effectâ which does not occur for azithromycin,â and that azithromycinâs âmetabolism occurs only post-absorption.â Dr. Davis also stated that âthe half-life for azithromycin is about 70 hours, whereas that for clarithromycin is about 3-^4 hours at low IR doses.â First-pass metabolism was explained as meaning that a significant amount of the drug is metabolized and converted into another compound before it enters the circulation; Dr. Davis stated that a person of skill in this field, having this knowledge, would not have assumed that the two drugs would exhibit similar behavior if placed in the same formulation. The district court concluded that it was not predictable, from the in vitro behavior of azithromycin, how any specific clarithromycin extended release formulation would perform in vivo.
Sandoz presented other arguments, for example, that the FDA regulations state the requirements for approval of extended release formulations, thereby rendering obvious a formulation that meets these requirements. However, knowledge of the goal does not render its achievement obvious. The district court appropriately applied the KSR standard of whether the patents in suit represented an âidentified, predictable solutionâ and âanticipated success,â the words of KSR, to the problem of producing extended release formulations having the pharmacokinetic properties in the claims.
On the record of the preliminary injunction proceedings, and considering this courtâs ruling in Andrx and the guidance of the Court in KSR, we do not discern reversible error in the district courtâs ruling that Abbott is likely to prevail on the
II
INEQUITABLE CONDUCT
Sandoz also argued that the '718 and '616 patents are unenforceable due to Abbottâs âinequitable conductâ in the Patent and Trademark Office. Sandoz stated that Abbott submitted a false declaration to the PTO, and also that Abbott withheld from the examiner the results of certain tests after the patent applications were filed and that were inconsistent with information in the patent applications. The district court found that there was no intent to deceive the examiner, and that the criticized activity did not constitute inequitable conduct.
The evidentiary standard for determining whether there was inequitable conduct in obtaining a patent that is otherwise valid was set forth by this court, sitting en banc for the purpose, in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed.Cir.1988). The court explained that â[t]o be guilty of inequitable conduct, one must have intended to act inequitably,â and held: âInequitable conduct resides in failure to disclose material information, or submission of false material information, with an intent to deceive, and those two elements, materiality and intent, must be proven by clear and convincing evidence.â Id. at 872. Mistake or negligence, even gross negligence, does not support a ruling of inequitable conduct. The court held:
We adopt the view that a finding that particular conduct amounts to âgross negligenceâ does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.
Id. at 876. When both materiality and deceptive intent have been established the district court determines, in the courtâs discretion, whether inequitable conduct has occurred; appellate review is on this basis. See id. at 876 (âAs an equitable issue, inequitable conduct is committed to the discretion of the trial court and is reviewed by this court under an abuse of discretion standard. We, accordingly, will not simply substitute our judgment for that of the trial court in relation to inequitable conduct.â).
The '718 patent
Sandoz first challenges the district courtâs findings with respect to a declaration by an inventor, Dr. Linda Gustavson, comparing the products of the pending '718 application with the products in a prior art Abbott patent, U.S. Patent No. 4,808,411, directed to a pediatric clarithromycin suspension that is administered twice daily. Dr. Gustavson submitted data to the PTO comparing the '718 and the '411 formulations, and stated that âthe ER [extended release] formulation as claimed, is supported by the above results, namely, Cmax of clarithromycin in plasma is statistically significantly lower than that for IR [immediate release] formulation given twice daily.â The declaration also stated that âAUC is maintained over 24 hours; and Cmin is substantially equivalent to that of the IR suspensionâ.
Abbott did not dispute that Dr. Gustav-son did not analyze statistical significance, but argued that it was not material to patentability and that a reasonable examiner would not have found otherwise. Abbott pointed out that the actual data were before the PTO, and that the results did show a numerically lower Cmax value. San-doz pointed out to the district court that Abbottâs patent attorney argued nonobvi-ousness to the PTO based on the Gustav-son declaration, and Abbott responded that the declaration correctly stated that the pharmacokinetic properties of the product in the '411 patent are markedly different from those of the product of the '718 patent. We have been directed to no evidence of deceptive intent, or âbad faith or intentional misconductâ, in the words of PTO Rule 56; on this appeal Sandoz repeats that deceptive intent should be inferred from the misstatement.
The district court cited Impax Labs., Inc. v. Aventis Pharm., Inc., 468 F.3d 1366, 1374 (Fed.Cir.2006) for its summary that a ruling of inequitable conduct requires clear and convincing evidence that the applicant while prosecuting the patent â(1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [PTO].â In determining materiality, the district court applied the standard that â[undisclosed information is material if it satisfies 37 C.F.R. § 1.56 and if there is a substantial likelihood that a reasonable examiner would have considered the undisclosed information important in deciding whether to allow the patent to issue.â Although the Federal Circuit has not always been consistent in defining âmaterialityâ in accordance with the PTO Rules, the principles are consistently directed to deceptive actions by patent applicants. In Digital Control, Inc. v. Charles Machine Works, 437 F.3d 1309 (Fed.Cir.2006) the court observed that four separate tests have been applied for materiality.
The district court, applying the tests of materiality to the Gustavson statement about statistical significance, stated that it was âobviously troublesome that Gustav-son made her assertion without having actually performed the statistical test.â The district court concluded that the Gustavson statement was not material to patentability, âdespite the fact that it satisfies the definition of âmaterialâ provided by 37 C.F.R. § 1.56(b).â The court stated that:
Since 1) no claim of the '718 patent requires the extended release formulation to have a statistically significant lower Cmax than the immediate release formulation; 2) the data in fact shows the Cmax of the extended release formulation to be lower (albeit not statistically significantly lower) than the Cmax of the immediate release formulation; and 3) the extended release formulation was in fact pharmacokinetically different from the immediate release suspension formulation, it is more likely than not that the PTO would not have found the âstatistically significantly lowerâ statement to be important.
500 F.Supp.2d at 822. Relevant is the ruling in Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1570 (Fed.Cir.1997) (that âInformation is material if a reasonable examiner would have considered it important to the patentability of a claimâ).
The district court also found that there was no evidence of intent to deceive the examiner. The court rejected Sandozâs argument that deceptive intent is inferred
Sandoz next challenged the fact that Abbott did not provide to the patent examiner the results of some clinical tests conducted after the '718 patent application was filed, that were reported to the FDA and included on the BiaxinÂŽ XL product label. The test results relate to taste perversion
The district court concluded that the taste results met the materiality criteria of Rule 56 but that a reasonable examiner would not consider the information important in deciding whether to grant the patent. The court explained that a reasonable examiner would compare data at comparable dosages, and that the data were not comparable. Although Abbott and Sandoz argued about whether the inventors knew or should have known of this discrepancy between this taste data from the Phase III clinical trial, and the taste data in the patent application, the district court observed that there was no evidence of deliberate withholding of this information in order to deceive the patent examiner. âIntent to deceive can not be inferred solely from the fact that information was not disclosed; there must be a factual basis for a finding of deceptive intent.â Hebert v. Lisle Corp., 99 F.3d 1109, 1115, 1116 (Fed.Cir.1996) (âTo establish inequitable conduct the information that is known to the applicant and not provided to the PTO must be both material to patentability, and withheld in order to deceive or mislead the examiner.â); Molins PLC v. Textron, Inc., 48 F.3d 1172, 1181 (Fed.Cir.1995) (âWhile intent to deceive the PTO may be found as a matter of inference from circumstantial evidence, circumstantial evidence cannot indicate merely gross negligence.â).
Finally, Sandoz criticized Abbottâs failure to provide the PTO with a study designated W98-268, done after the patent application was filed, which compared the pharmacokinetic values of clarithromycin upon administration under various conditions. The district court described the issue as: âAbbott claimed that the mean DFL values for a modified release version of clarithromycin claimed by a prior patent, the '190 patent, were substantially equal to the mean DFL values for the immediate release version of clarithromy-cinâ but â[t]he final report of Study W98-268 states that the modified release formulation exhibited a statistically significantly lower mean DFL than that for the immediate release formulation.â 500 F.Supp.2d at 823. Sandoz stated that Abbott committed inequitable conduct by failing to disclose these results to the PTO.
Dr. Weiner stated in his January 9 Declaration that âthe '190 patent does not disclose any clarithromycin-specific PK data,â and âthe '190 patent does not disclose any DFL values at all,â and explained that âsubsequent studies conducted by Abbott indicate that the commercial embodiment of the invention of the '190 patent does not have a statistically significantly lower DFL than the IR formulation .... Before the present litigation, Abbott had conducted five crossover studies in which the pharmacokinetic parameters for clarithromycin (i.e., clarithromycin specifically, not clarithromycin combined with its metabolite) were measured for both the MR [modified release] and IR formulations: W95-914, W95-195, W95-197, W98-268 [the study that Sandoz accuses Abbott of withholding], and TAI-99-001.â The mean DFL values in Table VII in the '718 patent are based on Study W95-195. See Supplemental Declaration of Dr. Ronald Sawchuk, February 7, 2007 (âTable VII reflects data from a multiple dose study involving MR formulation and an IR formulation that was conducted in Germany in 1995. See Ex. 12, Study W95-195.â). The studies conducted before the '718 patent application was filed showed the data reported in the specification.
Many details were explained to the district court, as to all the studies, their context, and their relationship. The district court found that âcontrary to Sandozâs assertion, Study W98-268 does not demonstrate that the prior art MR formulation has the same PK properties as that claimed for the ER formulation. Therefore, Study W98-268 is not material to the patentability of the '718 patent.â Abbott, 500 F.Supp.2d at 824. The district court found that the '718 patent âspeaks of the PK relationship of extended release and immediate release formulations, not of modified release and immediate release formulations .... [and] there is no evidence showing the DFL of the ER formulation to be anything but consistently statistically significantly lower than the DFL of the IR formulation.â Id. The district court found that the W98-268 study was not material under either Rule 56 or the reasonable examiner standard. Clear error has not been shown in this finding.
On the preliminary injunction record, the district court did not abuse its discretion in ruling that Sandoz was not likely to succeed in establishing inequitable conduct in Abbottâs prosecution of the '718 patent application. We agree with the district
The '616patent
Sandoz argued that inequitable conduct as to the taste perversion claim in the '718 patent taints the '616 patent because a taste perversion claim was included in the '616 application when it was filed, although that claim was cancelled before any PTO examination on the merits. The district court declined to hold the '616 patent unenforceable based on a withdrawn claim, citing 37 C.F.R. § 1.56(a):
Rule 56(a). The duty to disclose information exists with respect to each pending claim until the claim is cancelled or withdrawn from consideration, or the application becomes abandoned. Information material to the patentability of a claim that is cancelled or withdrawn from consideration need not be submitted if the information is not material to the patentability of any claim remaining under consideration in the application.
The district court deemed it âwholly inequitable to hold a patent to be invalid for fraudulent conduct in the prosecution of a claim that was withdrawn before actual prosecution had even begun.â Abbott, 500 F.Supp.2d at 829. This court held in Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed.Cir.1991) that â[a] reference that is material only to withdrawn claims can not be the basis of a holding of inequitable conduct.â Rule 56 is in accord.
Sandoz also argued as to the '616 patent that Abbott did not report to the PTO the results of clinical trials conducted before the continuation in-part '616 application was filed. Sandozâ expert Dr. Marcello Pagano, in his Declaration dated January 25, 2007, stated: âI have reviewed the bronchitis and sinusitis studies [and] the claims of the '616 patent for a method of reducing gastrointestinal adverse side effects are not supported by the data from those two clinical studies.â The results of these studies were provided to the FDA, but not to the PTO. Dr. Pagano stated: âSince neither the sinusitis nor the bronchitis studies produced favorable results to support a claimed reduction in gastrointestinal adverse side effects, Abbott had to manipulate its data and report the number of discontinuations due to gastrointestinal adverse side effects to the PTO ...â The district court found that the information from these clinical trials was not material to patentability, stating that: âit is clear from both Table VI and Table VIII [of the '616 patent] that some data demonstrating no change in the subcategories of GI adverse side effects of abdominal pain, constipation, diarrhea, dyspepsia, flatulence and nausea were in fact disclosed to the PTO.â Abbott, 500 F.Supp.2d at 828. These findings have not been shown to be clearly erroneous.
There was no evidence of intent to deceive with respect to the results of these clinical trials. Materiality, even if found, does not establish intent. This is not a case of new information that affects the fundamental invention; this is a case of challenging every action or inaction of the âconductâ of patent solicitation, although patentability is unaffected. The purpose of Kingsdown was to bring patent practice into the mainstream of the law and administrative practice. The law severely punishes fraudulent practices, and the patent practice includes recognition that the inventor usually knows more about the field than does the âexpertâ patent examiner. However, routine actions that do not affect patentability and that are devoid of fraudulent intent are not subject to a different standard than other inquiries into fraudulent procurement. The Administrative Procedure Act governs patent examination, See Dickinson v. Zurko, 527 U.S. 150, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999),
We conclude that the district court did not abuse its discretion in holding that the '718 and '616 patents were not likely to be held unenforceable based on inequitable conduct in obtaining the patents.
Ill
INFRINGEMENT
The first step in most infringement suits is the procedure called âclaim construction,â where the scope of the claim is defined by the court. At the preliminary injunction stage the district courtâs claim construction is reviewed, as for other legal issues, for the likelihood of correctness of the ruling. This likelihood is based on the underlying facts as found at this stage of the proceedings, recognizing that âthe burdens at the preliminary injunction stage track the burdens at trial.â Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006).
For the patents here in suit, the issue of infringement was resolved, at this preliminary injunction stage, as a matter of claim construction. The dispositive question was whether the term âpharmaceutically acceptable polymerâ is limited to the polymers named in the specification, or can include other pharmaceutically acceptable polymers. If so limited, it is likely that there would not be literal infringement; if not so limited, then literal infringement would be possible. (Infringement under the doctrine of equivalents was not addressed by the district court, although Sandoz argues the issue âin an abundance of caution.â).
The meaning and scope of âpharmaceuti-cally acceptable polymerâ as used in these patents has been litigated in other cases, none of which had been finally decided, but some of which had been appealed to the Federal Circuit based on the grant of a preliminary injunction. The district court now construed âpharmaceutically acceptable polymerâ in accordance with the construction by the Federal Circuit in Andrx, supra. Sandoz argues on this appeal that the correct construction is that of the Federal Circuitâs earlier decision in Teva, supra. Sandoz argues that because Teva was the earlier ruling, it could not be overturned by the later Andrx panel, citing Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.2d 757, 765 (Fed.Cir.1988) (âWhere there is a direct conflict [between Federal Circuit panels], the precedential decision is the first.â).
Abbott responds that the decision in Andrx was properly followed by this district court, for in Teva the âconstructionâ of âpharmaceutically acceptable polymerâ was not at issue, and this courtâs comment thereon was dictum. The court in Andrx recognized the non-binding nature of that comment in Teva. Indeed, the district court in Teva had stated that â[a]t this early stage of the proceedings, the parties have raised no issue as to claim constructionâ. Abbott Laboratories v. Andrx Pharmaceuticals, Inc., No. 05 C 1490, 2005 WL 1323435, at *3, *4 (N.D.Ill. June 03, 2005) (Teva conceding literal infringement but challenging validity).
The panel in Andrx decided the questions now raised by Sandoz concerning the âconstructionâ of âpharmaceutically acceptable polymerâ and the pharmacokinetic requirements in the claims. The Andrx panel also explained its departure from the
âPharmaceutically acceptableâ as used herein, means those compounds, which are, within the scope of sound medical judgment, suitable for use in contact with the tissues of humans and lower animals without undue toxicity, irritation, allergic response, and the like, in keeping with a reasonable benefit/risk ratio, and effective for their intended use in the chemotherapy and prophylaxis of antimicrobial infections.
'718 patent, col. 3 lines 40-47. The district court referred to the '718 specificationâs listing of pharmaceutically acceptable polymers, but applied the Andrx ruling that the polymers are not limited to those that are named in the following paragraph:
The pharmaceutically acceptable polymer is a water-soluble hydrophilic polymer selected from the group consisting of polyvinylpyrrolidine, hydroxypropyl cellulose, hydroxypropyl methyl cellulose, methyl cellulose, vinyl acetate/cro-tonic acid copolymers, methacrylic acid copolymers, maleic anhydride/methyl vinyl ether copolymers and derivatives and mixtures thereof.
â718 patent, col. 3 line 65 to col. 4 line 4. The district court construed âpharmaceuti-cally acceptable polymerâ as:
[A]ny polymer, which within the scope of sound medical judgment is suitable for use in pharmaceutical compositions for use in contact with the tissues of humans and lower animals without undue toxicity, irritation, allergic response, and the like, in keeping with a reasonable benefit/risk ratio, and effective for their intended use in the chemotherapy and prophylaxis of antimicrobial infections, and is capable of forming a matrix to extend drug release into the bloodstream. Such a âpharmaceutically acceptable polymerâ must constitute 5 to 50% by weight of the product.
Abbott, 500 F.Supp.2d at 834. The district court, following Andrx, held that the usage âfrom the group consisting ofâ in the specification is not exclusive, as it would be in a Markush-form claim, and did not negate the broader description that is also contained in the specification, as quoted above.
This aspect was debated in the district court, and again on this appeal. Sandoz argues that since âpharmaceutically acceptable polymerâ is limited by the specification to water-soluble hydrophilic polymers, and that since the listed methacrylic acid copolymers are known to include water-insoluble as well as water-soluble polymers, the term âpharmaceutically acceptable polymerâ must be construed to mean that the formulation cannot include any water-insoluble methacrylic acid or other polymer. The district court, receiving this argument, reasoned that âthe existence of water-insoluble polymers from the specifically-mentioned methacrylic acid co-polymer subset actually militates towards a broader construction urged by Abbott that would encompass water-insoluble metha-crylic acid co-polymers.â Abbott, 500 F.Supp.2d at 834. Sandoz argues that this reasoning is flawed, and that this court in Andrx erred in rejecting this argument. However, we are not persuaded that the Andrx panelâs ruling warrants rejection on this argument, for we agree with the district court that the fact that some metha-crylic acid copolymers are water-insoluble does not require limiting âpharmaceutically acceptable polymerâ to the named polymers.
We conclude that the district courtâs claim construction, which is that of Andrx, is correct, and that the district court prop
Sandoz further argues that the district court erred by using the word âmatrixâ in its definition of âpharmaceutically acceptable polymer,â quoted above, pointing out that this word does not appear in the claims or specification. However, claim construction often calls upon words other than those of the patent, lest the claim simply define itself. âClaim constructionâ is for the purpose of explaining and defining terms in the claims, and usually requires use of words other than the words that are being defined. See Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1477 (Fed.Cir.1998) (claims are construed as an aid to the decision-maker, by restating the claims in non-technical terms).
Abbottâs expert Dr. Davis had used the word âmatrixâ in his explanation of the technology of extended release. He explained that a âpharmaceutically acceptable polymer ... alone or in combination with other polymers, is capable of forming a matrix when mixed with the drug to control and extend drug release into the GI tract and thence to the bloodstream.â Declaration of Professor Davis, January 10, 2007. Sandoz does not dispute that this explanation comports with the description in the specification. Also, Abbott cites several scientific publications that use the word âmatrixâ in this context, and Sandoz does not argue that the word has a different meaning from that with which it was used by the district court. There is no ground for discarding the district courtâs claim construction based on the word âmatrix.â
Sandoz also argued that the claims must be construed so that the âpharmaceutically acceptable polymerâ is the only release agent in the composition, argued that the presence of any other agent that affects release of the drug removes the composition from the scope of the '718 claims. Abbott pointed out that the claims use the conventional signal âcomprising,â which means that other ingredients may be present in the composition, in addition to those explicitly set forth. See CIAS, Inc. v. Alliance Gaming Corp., 504 F.3d 1356, 1360 (Fed.Cir.2007) (âIn the patent claim context the term âcomprisingâ is well understood to mean âincluding but not limited toâ.â); Georgia-Pacific Corp. v. United States Gypsum Co., 195 F.3d 1322, 1327-28 (Fed.Cir.1999) (â âcomprisingâ ... is inclusive or open-ended and does not exclude additional unrecited elements or method stepsâ).
Sandoz argues that the district courtâs claim construction is incorrect because it ignores the distinction between âpharma-ceutically acceptable polymersâ and âphar-maceutically acceptable excipients.â We discern no support for this challenge. Abbott points out that the distinction between âpolymerâ and âexcipientâ lies in its role in the composition, as the patent states: âThe compositions of the invention further comprise pharmaceutically acceptable excipi-ents and/or fillers and extenders, such as lactose ...â. '718 patent, col. 4, lines 21-23. We discern no flawed judicial understanding of the term âexcipient.â
Sandoz also argued that the components of its accused formulation are merely âex-cipientsâ in that they do not extend the release of the clarithromycin, while Abbott pointed out that Sandoz described its product to the FDA as âextended release.â
Sandoz argues that the district court erred in its evaluation of the evidence, stating that Abbott did not show by direct testing that any of the polymers in the Sandoz product actually extends the release of clarithromycin. Sandoz argues that the district court erred in finding unpersuasive certain laboratory tests conducted by Sandoz to show that malto-dextrin has no significant impact on the dissolution rate of clarithromycin. Abbott responds that the district court did not err, and that Sandoz must be deemed to have admitted that maltodextrin and silicified microcrystalline cellulose are polymers that, alone or in combination with other components, are capable of extending drug release. Abbott pointed out to the district court that the developer of the Sandoz formulation, Dr. Nirmal Mu-lye, in his patent application (U.S. 2004/0224017 Al) entitled âProcess for Preparing Sustained Release Tablets,â stated that âthe present inventor has found that the addition of maltodextrin in effective amounts provides the desired release profile,â that âmaltodextrin also tends to slow down the release of a medicament in a controlled release formulation[,]â and that âthe maltodextrin used in the present invention is to counteract the accelerated rate of release of the drug ...â We have not been directed to clear error in the district courtâs findings on this question.
Sandoz raises additional arguments, some discussed by the district court, and some newly presented on this appeal. Al have been considered. We conclude that the district courtâs findings and rulings at this stage of the proceedings have not been shown to constitute reversible error. The ruling that Abbott had shown a reasonable likelihood of proving infringement is sustained.
IV
THE EQUITABLE FACTORS
Sandoz states that the district court incorrectly resolved and weighed the equitable factors relevant to the grant of a preliminary injunction. Sandoz states that the factors of irreparable harm, the balance of harms, and the public interest, all weigh in its favor, and outweigh any finding that Abbott is likely to prevail on the issues of validity or enforceability and infringement. The district court considered these factors, and explained its reasoning in exercising its discretion to grant the preliminary injunction.
Irreparable Harm.
Sandoz argued that any harm to Abbott is not irreparable, for damages are available for infringement, if the eventual final judgment is adverse to Sandoz. Sandoz pointed out that the generic producers Teva and Ranbaxy are already in this market, by settlement with Abbott, such that any price erosion due to generic competition is already occurring. The district court considered these relationships, and
The Balance of Hardships
The district court discussed and weighed the hardships argued by both parties, and found that the balance of hardships tipped in favor of Abbott. The court found that preserving the status quo preserves the current market structure, recognizing that Abbott has licensed other generic producers. The district court concluded that âAbbott will lose much more if this Court did not enjoin Sandozâs infringing conduct than if the Court enjoins San-doz and it is subsequently found that the '718 patent is invalid or unenforceable.â Abbott, 500 F.Supp.2d at 845.
We agree that the fact that a patentee has licensed others under its patents does not mean that unlicensed infringement must also be permitted while the patents are litigated. Precedent illustrates that when the patentee is simply interested in obtaining licenses, without itself engaging in commerce, equity may add weight to permitting infringing activity to continue during litigation, on the premise that the patentee is readily made whole if infringement is found. In this case the district court received Abbottâs argument that it could not be made whole if it prevails in this litigation, for the added erosion of markets, customers, and prices, is rarely reversible. See Sanofi-Synthelabo, 470 F.3d at 1383 (rejecting hardship claim of generic challenger whose âharms were almost entirely preventableâ and were the result of its own calculated risk to launch its product prejudgmentâ).
Clear error has not been shown in the district courtâs finding that the harm to Sandoz of delay in entering this market while this case is litigated, is outweighed by the harm to Abbott in view of the likelihood that Abbott will succeed in sustaining the validity and enforceability of its patents.
The Public Interest
Sandoz argues that the public interest favors the availability of less expensive forms of successful medicines. The district court considered this argument, and stated:
The Court recognizes the public interest in competition in the pharmaceutical market. It also recognizes, however, the public interest in creating beneficial and useful products and the cost involved in that process. To the extent that this Court has found a substantial likelihood that the '718 patent is valid and enforceable, there can be no serious argument that public interest is not best served by enforcing it.
500 F.Supp.2d at 846. The district court appreciated that the public interest includes consideration of whether, by shifting market benefits to the infringer while litigation is pending for patents that are likely to withstand the attack, the incentive for discovery and development of new products is adversely affected. The statutory period of exclusivity reflects the congressional balance of interests, and warrants weight in considering the public interest. In Sanofi-Synthelabo, 470 F.3d at 1383, this court referred to the signifi
Sandoz states that the Courtâs recent decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) negates any presumption of entitlement to an injunction upon a finding of likelihood that a patent will be sustained and found infringed. The district court did not apply such a presumption, but fully considered all of the legal and equitable factors. At the preliminary injunction stage, the legal and equitable factors may be of different weight when the patentee is itself engaged in commerce, as contrasted with a patentee that is seeking to license its patent to others. We need not resolve this aspect for all possible situations, for as between Abbott and Sandoz the district court objectively weighed the legal probabilities and the equities, and exercised its discretionary judgment as to the entirety of the cause. We have been shown no basis for believing that the district court abused its discretion.
V
THE INJUNCTION BOND
Sandoz also appeals the amount of the injunction bond, which the district court set at $40 million. Sandoz provides no substance for appellate review of the amount of the bond, simply stating in its brief that it âpresented [to the district court] at least colorable evidence that its losses from the injunction and recall would be $200 million,â but not describing the evidence or arguing its merits. Sandoz simply states that its proposed number should have been accepted, in the event that the $40 million is later shown to be inadequate.
This aspect has not been presented in reviewable substance. On this appeal, abuse of discretion has been shown in the district courtâs setting of the terms of the injunction. See Russell v. Farley, 105 U.S. 433, 441, 26 L.Ed. 1060 (1881) (the courtâs discretion in setting the terms of an injunction is rooted in equity).
VI
THE ISSUE OF CONFLICTING PRECEDENT
The district court found the likelihood that the patentee would succeed on the merits and that the equities favored the patentee, and exercised its discretion to enjoin infringement during the litigation. The dissent states that the district court applied the incorrect standard, and that if the infringer âraises a substantial question concerning either infringement or validity,â diss. op. at 1371, it is an abuse of discretion to enjoin infringement pendente lite. The dissent quotes with approval a past panel statement that âIn resisting a preliminary injunction, however, one need not make out a case of actual validity. Vulnerability is the issue at the preliminary injunction stages, while validity is the issue at trial.â Id. Indeed, this courtâs precedent makes this statement, in direct conflict with other, earlier statements that the standard is not vulnerability, but likelihood of success on the merits.
In response to the arguments expounded in the dissenting opinion, I summarize the law governing the grant of a preliminary injunction. The criteria relied on in
Thus the evidence that favors the patent must be considered in deciding a motion for a preliminary injunction, as well as the evidence against the patent. The trial court then decides which side is likely ultimately to prevail. The dissent presents only the case against the patent, apparently on the theory that this is all that is needed to raise a âsubstantial questionâ.
Indeed, a showing of a substantial question concerning validity or infringement can serve to avert judgment on the pleadings, or to avoid the grant of summary judgment, but it is not the same as showing likelihood of eventual success on the merits. The dissent recognizes that it is not the same and that it ârequires less proofâ, but errs in stating that this is sufficient to defeat the grant of a preliminary injunction. Precedent is clear that the standard is the likelihood of success of the plaintiff at trial, with recognition of the presumptions and burdens. See, e.g., Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367, 1370 (Fed.Cir.2005); Ranbaxy Pharmaceuticals., Inc. v. Apotex, Inc., 350 F.3d 1235, 1239 (Fed.Cir.2003); Reebok Intâl Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed.Cir.1994); Smith Intâl, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1579 (Fed.Cir.1983).
Supreme Court precedent, every regional circuit, and controlling Federal Circuit precedent, apply to the preliminary injunction the combination of criteria that includes likelihood of success on the merits and equitable considerations. No other court has held that when the attacker has presented a âsubstantial questionâ on its side of the dispute â that is, more than a scintilla but less than a preponderance of evidence in support of its side â no injunction pendente lite is available. Further, equitable factors are of particular significance at the preliminary stage, where the question is whether to change the position of the parties during the litigation. See Camenisch, 451 U.S. at 395, 101 S.Ct. 1830 (the preliminary injunction preserves the position of the parties during the litigation). The dissent does not mention the equitable factors that were considered by the district court, as required by precedent; the dissent simply states that the injunction must be denied if the attacker has raised a substantial question.
Supreme Court precedent is clear in stating that the same burdens and standards of proof apply in deciding the merits for preliminary injunction purposes, as in deciding the same questions upon full litigation. See, e.g., Gonzales, 546 U.S. at 429, 126 S.Ct. 1211 (placing the burdens of proof for showing likelihood of success at the preliminary injunction stage). The Court explained in Amoco Production Co. v. Village of Gambell, AK, 480 U.S. 531, 546 n. 2, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987) that: âThe standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success.â
The sine qua non of this four-part inquiry is likelihood of success on the merits: if the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matter of idle curiosity.
Id. at 46 (citation omitted). The referenced âfour-part inquiryâ is â(1) the likelihood of success on the merits; (2) the potential for irreparable harm [to the mov-ant] if the injunction is denied; (3) the balance of relevant impositions, i.e., the hardship to the nonmovant if enjoined as contrasted with the hardship to the mov-ant if no injunction issues; and (4) the effect (if any) of the courtâs ruling on the public interest.â Id. (alteration in original) (citations omitted).
The Second Circuit also applies the standard four factors. I cite a case that emphasized the equitable considerations; in Laureyssens v. Idea Group, Inc., 964 F.2d 131, 135-36 (2nd Cir.1992) (emphasis in original) the court stated: âA party seeking a preliminary injunction must establish (1) irreparable injury and (2) a likelihood of success on the merits or a sufficiently serious question going to the merits and a balance of hardships tipping decidedly in the moving partyâs favor.â
The Third Circuit also stated that the district court must consider four factors: â[A] the likelihood that the applicant will prevail on the merits at final hearing; [B] the extent to which the plaintiffs are being irreparably harmed by the conduct complained of; [C] the extent to which the defendants will suffer irreparable harm if the preliminary injunction is issued; and [D] the public interest.â Opticians Assân of Am. v. Independent Opticians of Am., 920 F.2d 187, 191-92 (3rd Cir.1990) (alterations in original) (citation omitted). In Eli Lilly & Co. v. Premo Pharmaceutical Laboratories, Inc., 630 F.2d 120 (3rd Cir.1980) the court explained that when analyzing a preliminary injunction:
the moving party must generally show (1) a reasonable probability of eventual success in the litigation and (2) that the movant will be irreparably injured pendente lite if relief is not granted.... Moreover, while the burden rests upon the moving party to make these two requisite showings, the district court âshould take into account, when they are relevant, (3) the possibility of harm to other interested persons from the grant or denial of the injunction, and (4) the public interest.â ... While these factors structure the inquiry, however, no one aspect will necessarily determine its outcome. Rather, proper judgment entails a âdelicate balancingâ of all elements. On the basis of the data before it, the district court must attempt to minimize the probable harm to legally protected interests between the time that the motion for a preliminary injunc*1366 tion is filed and the time of the final hearing.
Id. at 136. Indeed, rulings of the Federal Circuit, along with requiring this âreasonable probability of eventual success,â have recognized the â âdelicate balancingâ of all elements.â See H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387-88 (Fed.Cir.1987).
Similarly in the Fourth Circuit the inquiry is: â1) Has the petitioner made a strong showing that it is likely to prevail upon the merits? 2) Has the petitioner shown that without such relief it will suffer irreparable injury? 3) Would the issuance of the injunction substantially harm other interested parties? 4) Wherein lies the public interest?â Blackwelder Furniture Co. of Statesville, Inc. v. Seilig Mfg. Co., 550 F.2d 189, 193 (4th Cir.1977) (when reviewing the grant of denial of interim injunctive relief âour review of the lower courtâs application of the law is not limited by the same âclearly erroneousâ rule which restricts our review of its findings of fact under Rule 52(a)â); see First-Citizens Bank & Trust Co. v. Camp, 432 F.2d 481, 484 (4th Cir.1970) (applying the four-factors and reversing the district courtâs grant of a preliminary injunction).
In the Fifth Circuit the four factors are recited as â(1) a substantial likelihood that plaintiff will prevail on the merits, (2) a substantial threat that plaintiff will suffer irreparable injury if the injunction is not granted, (3) that the threatened injury to plaintiff outweighs the threatened harm the injunction may do to defendant, and (4) that granting the preliminary injunction will not disserve the public interest.â Canal Authority of State of Florida v. Callaway, 489 F.2d 567, 573 (5th Cir.1974). The âsubstantial likelihood of prevailingâ is not the same as raising a substantial question.
Again for the Sixth Circuit, the âwell-establishedâ factors are: â(1) the likelihood that the party seeking the preliminary injunction will succeed on the merits of the claim; (2) whether the party seeking the injunction will suffer irreparable harm without the grant of the extraordinary relief; (3) the probability that granting the injunction will cause substantial harm to others; and (4) whether the public interest is advanced by the issuance of the injunction,â Six Clinics Holding Corp. II v. Cafcomp Systems, Inc., 119 F.3d 393, 399 (6th Cir.1997). The court recognized that âa finding that the movant has not established a strong probability of success on the merits will not preclude a court from exercising its discretion to issue a preliminary injunction if the movant has, at minimum, âshow[n] serious questions going to the merits and irreparable harm which decidedly outweighs any potential harm to the defendant if the injunction is issued.â â Id. at 400 (alteration in original). This ruling gave weight to the courtâs discretion to preserve the status quo during the litigation, when the equitable factors warrant such discretion.
In the Seventh Circuit:
As a threshold matter, a party seeking a preliminary injunction must demonstrate (1) some likelihood of succeeding on the merits, and (2) that it has âno adequate remedy at lawâ and will suffer âirreparable harmâ if preliminary relief is denied. If the moving party cannot establish either of these prerequisites, a courtâs inquiry is over and the injunction must be denied. If, however, the moving party clears both thresholds, the court must then consider: (3) the irreparable harm the non-moving party will suffer if preliminary relief is granted, balancing that harm against the irreparable harm to the moving party if relief is denied; and (4) the public interest, meaning the consequences of*1367 granting or denying the injunction to nonparties.
Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir.1992). This court has observed that the standard for granting or denying a motion for a preliminary injunction is not unique to patent law, and has ruled that the standard of the regional circuit should apply, here the Seventh Circuit. See Mikohn Gaming Corp. v. Acres Gaming, Inc., 165 F.3d 891, 894 (Fed.Cir.1998) (âThe Federal Circuit has generally viewed the grant of a preliminary injunction as a matter of procedural law not unique to the exclusive jurisdiction of the Federal Circuit, and on appellate review has applied the procedural law of the regional circuit in which the case was brought.â).
In the Eighth Circuit, âThe relevant factors on a motion for a preliminary injunction are: (1) the probability of success on the merits; (2) the threat of irreparable harm to the movant; (3) the balance between this harm and the injury that granting the injunction will inflict on other interested parties; and (4) whether the issuance of an injunction is in the public interest.â Entergy, Arkansas, Inc. v. Nebraska, 210 F.3d 887, 898 (8th Cir.2000). In Shrink Missouri Government PAC v. Adams, 151 F.3d 763, 764 (8th Cir.1998) the court stressed that â[t]he most important of the [prehminary injunction] factors is the appellantsâ likelihood of success on the merits.â
The Ninth Circuit stressed the importance of the equitable factors: âPreliminary injunctive relief is available to a party who demonstrates either: (1) a combination of probable success on the merits and the possibility of irreparable harm; or (2) that serious questions are raised and the balance of hardships tips in its favor. These two formulations represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases.â Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 713-14 (9th Cir.2007).
In the Tenth Circuit, âTo obtain a preliminary injunction, the moving party must establish that (1) the moving party will suffer irreparable injury unless the injunction issues; (2) the threatened injury to the moving party outweighs whatever damage the proposed injunction may cause the opposing party; (3) the injunction, if issued, would not be adverse to the public interest; and (4) there is a substantial likelihood that the moving party will eventually prevail on the merits.â Resolution Trust Corp. v. Cruce, 972 F.2d 1195, 1199 (10th Cir.1992) (âWhen a party seeking a preliminary injunction satisfies the first three requirements, the standard for meeting the fourth âprobability of successâ prerequisite becomes more lenient. The mov-ant need only show âquestions going to the merits so serious, substantial, difficult and doubtful, as to make them a fair ground for litigation.â â).
In the Eleventh Circuit, âA district court may grant injunctive relief if the movant shows (1) a substantial likelihood of success on the merits; (2) that irreparable injury will be suffered unless the injunction issues; (3) that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party, and (4) that if issued the injunction would not be adverse to the public interest.â All Care Nursing Service, Inc. v. Bethesda Memorial Hosp. Inc., 887 F.2d 1535, 1537 (11th Cir.1989).
In the District of Columbia Circuit, âIn considering whether to grant preliminary injunctive relief, the court must consider whether: (1) the party seeking the injunction has a substantial likelihood of success on the merits; (2) the party seeking the injunction will be irreparably injured if relief is withheld; (3) an injunction will not
All of the circuits have placed the preliminary injunction in terms of the likelihood of success on the merits and equitable factors. No circuit has held that it suffices simply to raise a âsubstantial question.â Raising a substantial question achieves the threshold requirement of the well-pleaded complaint; it does not demonstrate a likelihood of prevailing. See Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 808-809, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (âA district courtâs federal-question jurisdiction, we recently explained, extends over âonly those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiffs right to relief necessarily depends on resolution of a substantial question of federal law [.]â â) (citation omitted); Litecubes, LLC v. Northern Light Products, Inc., 523 F.3d 1353, 1360 (Fed.Cir.2008) (âUnder what is known as the âwell-pleaded complaint rule,â subject matter jurisdiction exists if a âwell-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiffs right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.â â) (citations omitted).
Federal Circuit precedent developed to match the rest of the nation. See Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1451 (Fed.Cir.1988) (âThe first factor required to be established by a party seeking a preliminary injunction is that it stands to have a reasonable likelihood of success on the merits when the trial court finally adjudicates the dispute. In seeking a preliminary injunction pursuant to section 283, a patent holder must establish a likelihood of success on the merits both with respect to validity of its patent and with respect to infringement of its patent.â); H.H. Robertson Co., 820 F.2d at 387 (observing that the preliminary injunction in the Third Circuit âis substantially the same standard enunciated by this court,â and that â[t]he standards applied to the grant of a preliminary injunction are no more nor less stringent in patent cases than in other areas of the lawâ); Roper Corp. v. Litton Systems Inc., 757 F.2d 1266, 1270-73 (Fed.Cir.1985) (reviewing denial of a preliminary injunction by assessing likelihood of success and irreparable injury); Pretty Punch Shoppettes, Inc. v. Hauk, 844 F.2d 782, 783 (Fed.Cir.1988) (determining likelihood of success on the merits); Nutrition 21 v. United States, 930 F.2d 867, 869 (Fed.Cir.1991) (applying the four-factor test including likelihood of success on the merits); Texas Instruments Inc. v. Tessera, Inc., 231 F.3d 1325, 1329 (Fed.Cir.2000) (in an ITC proceeding, applying the traditional four-factor test including likelihood of success on the merits); Hoop v. Hoop, 279 F.3d 1004, 1007 (Fed.Cir.2002) (applying the traditional four factor test including likelihood of success); Ranbaxy, 350 F.3d at 1239 (applying the four factors of â(1) a reasonable likelihood of success on the merits; (2) irreparable harm if the injunction were not granted; (3) the balance of the hardships and (4) the impact of the injunction on the public interestâ and holding that the showing of a reasonable likelihood of success on the merits must be âin light of the presumptions and burdens that will inhere at trial on the meritsâ).
Summary
To summarize my concern for the conflict that is here continued, I again point out that the dissenting opinion, despite its initial recitation of the correct four-part criteria for deciding the grant or denial of
The district court analyzed the positions of both sides as well as the equitable factors, decided that Abbott was likely to prevail on the merits and that the equitable factors weighed in favor of Abbott, and exercised its discretion to grant the preliminary injunction. The dissent states that a showing of âvulnerabilityâ shows that the defendant is likely to prevail on the merits; that is facially incorrect. The dissent also relies on some recent (2008) Federal Circuit decisions; these decisions are not âclearly established precedent,â for they cannot overcome earlier rulings of this court. Further, until today no opinion has equated the raising of a âsubstantial questionâ with a showing of likelihood of success on the merits. The following additional cases of the Federal Circuit are cited to show the established law: Jeneric/Pentron, Inc. v. Dillon Co., Inc., 205 F.3d 1377, 1380 (Fed.Cir.2000) (âA preliminary injunction requires the movant to show four factors ... [and] â[c]entral to the movantâs burden are the likelihood of success and irreparable harm factors.â â); Intergraph Corp. v. Intel Corp., 195 F.3d 1346, 1352 (Fed.Cir.1999) (applying 11th Circuit law for a preliminary injunction, the criteria are â(1) the party seeking the injunction has shown a substantial likelihood of success on the merits, (2) there is a substantial threat of irreparable injury in absence of the injunction, (3) the balance of harms favors the party seeking the injunction, and (4) entry of the injunction does not disserve the public interest.â); Mentor Graphics Corp. v. Quickturn Design Systems, Inc., 150 F.3d 1374, 1377 (Fed.Cir.1998) (âA preliminary injunction requires the assessment of four factors: the likelihood of movantâs success on the merits, the irreparability of harm to the movant without an injunction, the balance of hardships between the parties, and the demands of the public interest.â); Polymer Technologies, Inc. v. Bridwell, 103 F.3d 970, 973 (Fed.Cir.1996) (âAs the moving party, Polymer had to establish its right to a preliminary injunction in light of four factors: (1) a reasonable likelihood of success on the merits; (2) irreparable harm if the injunction were not granted; (3) the balance of the hardships and (4) the impact of the injunction on the public interest.â); Bio-Technology Gen. Corp. v. Genentech, Inc., 80 F.3d 1553, 1558 (Fed.Cir.1996) (âAs the moving party, Genentech had to establish a right to a preliminary injunction in light of four factors: (1) a reasonable likelihood of success on the merits; (2) irreparable harm if the injunction were not granted; (3) the balance of hardships tipping in its favor; and (4) the impact of the injunction on the public interest.â); Rosemount, Inc. v. Intâl Trade Commân, 910 F.2d 819, 821 (Fed.Cir.1990) (âTo grant the equitable relief of an injunction prior to trial, a district court traditionally considers and balances the factors of: (1) the movantâs likelihood of success on the merits; (2) whether or not the movant will suffer irreparable injury during the pen-dency of the litigation if the preliminary injunction is not granted; (3) whether or not that injury outweighs the harm to other parties if the preliminary injunction
These rulings of the Federal Circuit accord with the principles of eBay, 547 U.S. at 394, 126 S.Ct. 1837, that âthe 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.â This courtâs contrary opinions stand alone. If in fact this court
As it stands, neither district courts, nor litigants, nor panels of this court, are provided with clear guidance, or any reason to reject the stricture of eBay, 547 U.S. at 393, 126 S.Ct. 1837, that â[njothing in the patent Act indicates that Congress intended such a departureâ from âthe long tradition of equity practiceâ.
CONCLUSION
Abuse of discretion has not been shown in the district courtâs grant of the preliminary injunction, adhered to after additional consideration in view of the Courtâs decision of KSR. The district courtâs findings of fact underlying the legal and equitable considerations are supported, and the judicial balancing of these considerations shows no abuse of discretion. The grant of the injunction is affirmed. The case is remanded for further proceedings.
AFFIRMED
. Abbott Laboratories v. Sandoz, Inc., 500 F.Supp.2d 807 (N.D.Ill.2007) (grant of preliminary injunction); 500 F.Supp.2d 846 (N.D.Ill.2007) (denial of stay pending appeal); 529 F.Supp.2d 893 (N.D.Ill.2007) (grant and denial of various motions for summary judgment).
. The variation between maximum and minimum concentration is measured by the degree of fluctuation, called "DFLâ, calculated as (Cmsx - Cmin) / Cav& with Cavg the average concentration over a dosing interval. Appx. 463 Âś 1128.
. The AUC is a calculation of the "area under a curveâ when drug concentration is plotted over time, and is a measure of bioavailability of the drug. Cmin is the minimum rug concentration over a dosing interval.
. "Taste perversionâ is defined in the '718 patent as "the perception of a bitter metallic taste normally associated with erythromycin derivatives, particularly, with clarithromy-cin.â Col. 3, lines 53-55.
. Sandoz requests that we instruct that on remand this case should be assigned to a different judge, in order to "further the interests of judicial economyâ. We discern no basis for this request; it is denied.