Abbott Laboratories v. Sandoz (CAFC 2007-1300)

Fighting the preliminary injunction, Sandoz argued district court legal error on everything: "validity, infringement, and inequitable conduct, and... that the district court abused its discretion in balancing the equities and granting the injunction." 

On appellate review of the grant of a preliminary injunction, the question "is simply whether the issuance of the injunction constituted an abuse of discretion." Doran v. Salem Inn, 422 U.S. 922, 932 (1975). "It 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." Deckert v. Independence Shares Corp., 311 U.S. 282, 290 (1940). Abuse of discretion is established "by 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." Novo Nordisk of North America, 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) ("A 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.").

This blog entry is limited to the prior art portion of the CAFC's affirmation and remand. First, anticipation.

"Anticipation" 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 1367, 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 ("To 'anticipate,' 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."); Elan Pharmaceuticals, Inc. v. Mayo Found. for Medical Educ. & Research, 346 F.3d 1051, 1054 (Fed. Cir. 2003) (same).

The district court figured that the reference Sandoz liked so much missed by a country mile. The CAFC concurred.

The district court ruled against Sandoz on its obviousness position just before Obzilla stalked into town (the SCOTUS KSR ruling). The big O didn't change anything for this case. Interestingly, Abbott arguing hindsight reasoning got traction.

The Court recognized in Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809 (1986) that the district court is not to rely on hindsight, and that "in 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." 475 U.S. at 810. In Graham v. John Deere Co., 383 U.S. 1 (1966) the Court recognized that the obviousness inquiry must "guard against slipping into use of hindsight and to resist the temptation to read into the prior art the teachings of the invention in issue." Id. at 36.

Sandoz failed to show that success could have been expected by combining the prior art references.

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 "a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions." 127 S. Ct. at 1740. The Court explained the conditions in which "obvious to try" 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 "teaching, suggestion, or motivation" concerning that option. Then, "if this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense." 127 S. Ct. at 1742.

The Court in KSR did not create a presumption that all experimentation in fields where there is already a background of useful knowledge is "obvious to try," without considering the nature of the science or technology. The methodology of science and the advance of technology are founded on the investigator's 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 evaluation of the choices made by a skilled scientist, when such choices lead to the desired result, is a challenge to judicial understanding of how technical advance is achieved in the particular field of science or technology. Such understanding is critical to judicial implementation of the national policy embodied in the patent statute. In Publication of Tomlinson, 363 F.2d 928 (CCPA 1966) our predecessor court discussed the role of "obvious to try" in scientific and technologic research and in patentability:

Slight reflection suggests, we think, that there is usually an element of "obviousness to try" 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 "research."

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 "obvious to try," without considering the nature of the science or technology. The methodology of science and the advance of technology are founded on the investigator's 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.

Nicely put.

The ruling was 2-1. Opinion by Judge Newman, joined by Judge Archer.

Judge Gajarsa dissented, thinking that "a substantial question as to validity" had been raised.

Under our precedent, the likelihood of success factor is properly analyzed by considering whether the alleged infringer raises a substantial question as to validity. See, e.g., E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, L.L.C., 525 F.3d 1353, 1358 (Fed. Cir. 2008) ("[I]f the accused infringer raises a substantial question regarding validity, the district court should find that the patentee has not shown a likelihood of success on the merits." (internal quotation marks omitted)). Indeed, this court has consistently held that an alleged infringer can negate the patentee's likelihood of success on the merits--and thus defeat a preliminary injunction--by raising a substantial question as to validity.