Substantial question regarding validity insufficient to defeat likelihood of success?December 9, 2008 In a recent decision, the Federal Circuit affirmed a district court's grant of a preliminary injunction concerning the manufacture of an extended release formulation of an antibiotic. In a lengthy opinion, the Federal Circuit applied the Supreme Court's obvious-to-try logic from KSR to pharmaceutical patents. Notably, the court used the unpredictability of the pharmaceutical arts to find that, despite a prior art reference listing twelve different approaches in creating an extended release formula, the claimed formulation was (at least at the preliminary injunction stage) more than the predictable use of prior art elements according to their established functions. The Federal Circuit also addressed the issue of inequitable conduct, reinforcing its holding in Kingsdown Medical that materiality alone does not automatically establish the bad faith necessary for a finding of inequitable conduct. The panel majority, after an extensive review of case law regarding injunctive relief, held when determining likelihood of success, the court must examine the question with the ultimate issue in mind, namely whether the party will likely prevail on the issue. Judge Gajarsa's dissent, on the other hand, took the panel majority to task for diverging from the Federal Circuit's precedent on the issue, and would have held a substantial question of validity and enforceability was raised, making the preliminary injunction improper. More on Abbot Labs. v. Sandoz, Inc. after the jump. The case stems from two patents held by Abbott concerning extended release versions of an antibiotic clarithromycin. US Patent 6,010,718 (the '718 patent) covers an extended release version comprising a derivative of erythromycin and a pharmaceutically acceptable polymer. US Patent 6,551,616 (the '616 patent) is a continuation in part of the '718 patent directed at reducing gastrointestinal side effects. Abbott filed suit against Sandoz for alleged infringement of the patents and requested a preliminary injunction preventing Sandoz from making the allegedly infringing drugs. Sandoz answered claiming invalidity, inequitable conduct, and non-infringement. The district court granted the injunction and Sandoz filed the appeal claiming that the court improperly found likelihood of success on the merits and improperly balanced the equitable factors concerning the awarding of a preliminary injunction. Validity The district court held Abbott was likely to prevail on the issue of validity despite Sandoz's assertion that the patents in suit were anticipated and obvious in light of the prior art. Regarding anticipation, Sandoz claimed that European Patent Publication 0,280,571 (the '571 publication) anticipated the '718 patent, as it described a similar pharmaceutical compound. Abbott responded that the publication failed to meet every element of the claims because it did not mention the specific compound and it did not disclose the pharmacokinetic limitations in the claims. The district court concluded, and the Federal Circuit agreed, that Abbott was likely to succeed in showing no anticipation as the '571 publication. Regarding obviousness, Sandoz claimed that the patents in suit were obvious in light of the '571 publication, describing a sustained release matrix formulation or erythromycin in tablet form, PCT Application WO 95/30422 (the '422 application), describing a number of approaches to formulating extended release pharmaceuticals with azithromycin (an erythromycin derivative),and US Patent No. 5,705,190 (the '190 patent) describing the use of an alginate salt to modify the release of clarithromycin. The likelihood of success on the obviousness argument hinged largely on Sandoz's argument that it would have been obvious to try the multiple extended-release pharmaceutical formulations disclosed in the '422 application. This argument was largely based on the Supreme Court's decision in KSR v. Teleflex, which states that "when 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." Abbot argued that the combination of references failed to render the claimed invention obvious because there was no guidance to select the particular combination claimed from the many possible combinations disclosed. Abbott noted that the obvious to try approach in KSR relied on there being "a finite number of identified, predictable solutions." Abbott noted that approximately twelve different formulations were disclosed in the '422 application and the results obtained by using the disclosed methods in the '422 application did not yield predictable results, but instead relied on experimentation to achieve the desired results. Abbott argued that hindsight would be required to make the claimed approach obvious due to reliance on the inventors experiments which led to the claimed invention. Abbott cited the prohibition against the use of hindsight in finding obviousness in Graham v. John Deere Co., where the Supreme Court stated "the obviousness inquiry must guard against clipping into use of hindsight and to resist the temptation to read into the prior art the teachings of the invention at issue." The Federal Circuit affirmed the district court's finding that Sandoz was not likely to succeed in its obviousness defense, stating "[w]e 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. " The Federal Circuit noted 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." Applying the teaching of KSR to the present case, the Federal Circuit stated: "[t]he 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 Federal Circuit then set forth several elements to be considered, stating: "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." Here, the proposed solution was not "obvious to try," at least at the preliminary injunction stage. Accordingly, the court affirmed the district court's conclusion that Sandoz was not likely to prevail on its invalidity defenses. Interestingly, this was the third time a panel of the court had addressed the strength of an invalidity case regarding these claims at the preliminary injunciton stage. In the two previous cases, the court once held the claims not likely to be held invalid (and affirmed the preliminary injunction), and once held substantial questions regarding validity had been raised (and vacated the preliminary injunction). Further, while the panel held Abbott likely to prevail on the issue of validity, Judge Archer concurred in the jugment on this issue, and therefore the validity portion of the opinion is solely by Judge Newman, who dissented in the previ ← Return to Filewrapper