Abbott Laboratories v. Andrx Pharmaceuticals, Inc., et al.

CAFC Majority Vacates Preliminary Injunction, with Scathing Dissent

(Fed. Cir. 2006, 05-1433) 

The CAFC vacated a preliminary injunction granted by the district court (N.D. Ill.), finding that there was a substantially issue raised as to the validity of each of the asserted claims relied upon by the district court for the preliminary injunction.

At issue was Abbott’s patents claiming an extended release formulation of the broad spectrum antibiotic, clarithromycin.   Abbott sued Teva for infringement of the patents upon Teva’s filing of an Abbreviated New Drug Application (ANDA) for a similar extended release form of clarithromycin.  The majority panel stated the four fact test for granting a preliminary injunction, namely that the party seeking the preliminary injunction must show:

1)      the movant has some likelihood of success on the merits of the underlying litigation;

2)      immediate irreparable harm will result if the relief is not granted;

3)      the balance of hardship s to the parties weights in the movant’s favor; and

4)      the public interest is best served by granting the injunctive relief.

The court also stated that, in accordance with eBay, Inc. v. MercExchange, the decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion; a showing of which may be made by showing the court made a clear error of judgment in weighting relevant factors or exercised its discretion based upon an error of law or clearly erroneous findings.

Teva argued that the Abbott patents were invalid for obviousness in light of references describing extended release versions of azithromycin, another macrolide antibiotic.  In focusing on the likelihood of success prong of the preliminary injunction test, the CAFC held that Abbots own claims, which recited azithromycin, in a Markush group with erythromycin, described Abbott’s view that at the time the application was filed a person or ordinary skill in the art would have had a reasonable expectation of success in making the claimed invention.  The court concluded that Abbot had represented to the USPTO that the “differences between the [compounds] were such that azithromycin could be substituted . . . by a person of ordinary skill in the art without undue experimentation.”  Furthermore, the court held Abbott’s statements in its briefs as to improvements to gastrointestinal and taste side effects show that the improvements would not be surprising or unexpected.  Accordingly, the majority held that a substantial question as to the validity of he claims was raised.

The majority then proceeded to summarily address the other factors of the preliminary injunction analysis.  For instance, since the majority found that Abbott prong 1 was not established, Abbott was not longer entitled to a presumption of irreparable harm (prong 2).  The court concluded that since the third prong was not an issue on appeal that it was admitted to favor Abbott.  Finally, as to the public interest factor, the majority concluded that the public interest was best served by denying the injunction (based on the finding that Abbott did not establish a likelihood of success on the merits).

In her scathing dissent, Judge Newman discusses the rationale behind preliminary injunctions and considerations of pendente lite, or “pending the litigation.”  “The purpose of a preliminary injunction is to preserve the relative positions of the parties until a trial on the merits can be held.”  Additionally, “[i]t is particularly irregular for an appellate court to reverse [the discretionary decision of the district court] and thereby to make a significant change in the relationship of the parties, while presenting no explanation of how the district court abused its discretion.” 

Judge Newman characterizes the application of the preliminary injunction test by the majority as “misapplied,” and states that the majority ignores the district court’s analysis, offering neither deference nor acknowledgement.”  “Reversible error has not been shown in the district court’s analysis, and no basis whatsoever has been shown for overturning the court’s discretionary decision to preserve the status quo while the matter is litigated.”