Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2007 WL 1549498 (N.D. Ill. May 24, 2007) (Coar, J.).

Judge Coar denied defendant Sandoz, Inc.'s ("Sandoz") motion to stay the Court's preliminary injunction pending appeal to the Federal Circuit pursuant to Fed. R. Civ. P. 62(c).  The Court previously granted plaintiff Abbott's motion for a preliminary injunction (you can read more about that decision and related cases in the Blog's archives).  The PI enjoined defendant Sandoz from selling a generic version of Abbott's patented extended release antibiotic (clarithromycin, an erythromycin derivative which Abbott markets as Biaxin XL).  Sandoz argued that the PI should be stayed pending appeal because of conflicting Federal Circuit law regarding the Court's claim construction and because of the Supreme Court's KSR decision. 

First, Sandoz argued that two different Federal Circuit panels had issued differing rulings construing the claims at issue.  Judge Coar rejected this argument because the construction relied upon in the PI ruling was the Federal Circuit's second, broader claim construction.  The Court explained that the "only rational assumption" was that the second panel was aware of the constructions in the first, but relied upon something different in the record or identified a fact missed by the first panel.  Further, the Court predicted that the Federal Circuit would not retreat from its second opinion to its first, prior opinion.

Second, the Court held that the KSR decision did not change its analysis of Sandoz's likelihood of success on its obviousness argument.  The Court provided a detailed explanation of KSR and its reasoning, but differentiated the current case because the Court held that one of the limitations in the Abbott claims did not exist in Sandoz's cited combination of prior art references.  Because the references did not disclose one of the elements of the claims, whether or not the Court used a strict application of the Federal Circuit's teaching, suggestion or motivation test did not change the outcome of its analysis.  Both the Federal Circuit's and the Supreme Court's standards required that all elements be disclosed by the combined prior art references.

Finally, the Court held that Sandoz had not provided sufficient evidence that it would be irreparably harmed.  Sandoz argued that if it could not enter the market at the same time as other generics, which are not subject to PI's, pharmacists would be reluctant to later restock their shelves with Sandoz's generic version of the drug.  But the Court reasoned that the lure of generics is their prices, not their brand recognition, so Sandoz should have no trouble re-entering the market at a later date should it prevail.

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KSR v. Teleflex, 550 U.S. __ (2007).

A unanimous Supreme Court rolled back the Federal Circuit's teaching, suggestion or motivation obviousness test in favor of the Court's prior, and substantially broader, test as set forth in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966).  Justice Kennedy delivered the Court's opinion and called the Supreme Court's approach to obviousness "broad and flexible."  The Court also noted that because the parties did not dispute the prior art, the claim's scope or the level of ordinary skill in the art and because obviousness is a legal question, the district court was correct to grant summary judgment in this case.

In addition to bringing the Fed. Cir. down to size, the Supreme Court also took a swipe at the PTO:

We need not reach the question whether the failure to disclose [the prior art reference] during the prosecution . . . voids the presumption of validity given to issued patents, for claim 4 is obvious despite the presumption. We nevertheless think it appropriate to note that the rationale underlying the presumption - that the PTO, in its expertise, has approved the claim - seems much diminished here.

The KSR decision opens up obviousness and will make obviousness a much larger issue in patent cases.  And whatever else the "new" old law may do, it will keep patent litigators very busy for years to come.  You can download a PDF of the Court's opinion from the Blog's archives.

Here is a list of links to other KSR commentary across the internet, as you can see you could read about KSR all week:

Patently-O

Prof. Sarnoff via Patently-O

WSJ Law Blog (with interesting comments from several key players and practicioners)

Patent Docs

Infinite Monkey Theorem

File Wrapper

271 Patent Blog

Tech Dirt

Patent Prospector

Fire of Genius and here

Orange Book Blog (for the decisions effect on pharma patents)

Michael Barclay of Wilson Sonsini via the SCOTUS Blog

Dan Bromberg of Quinn Emanuel via the SCOTUS Blog

Chicago Tribune

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Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2006 WL 1141635 (N.D. Ill. Apr. 16, 2007) (Coar, J.).

Judge Coar granted plaintiff Abbott's motion for a preliminary injunction, after having previously denied it a TRO.*  The PI enjoined defendant Sandoz from selling a generic version of Abbott's patented extended release antibiotic (clarithromycin, an erythromycin derivative which Abbott markets as Biaxin XL).  The Court held that Sandoz had shown a substantial likelihood of materiality and Abbott's intent to deceive the PTO  based upon Abbott's failure to disclose certain taste perversion data during prosecution.  But because Abbott abandoned the claims to which the taste perversion data was relevant of its own accord, the Court did not find the patent preliminarily unenforceable.  The Court explained its reasoning as follows:

Redemption is one of the core principles of the American ethos.  Thus in addition to being contrary to the spirit of Scribbs, Kimberly-Clark and the Code of Federal Regulation, it seems wholly 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.

The Court then made detailed, initial claim construction rulings and, based upon them, found a substantial likelihood of infringement.  The Court also considered Sandoz's invalidity arguments, but held that Sandoz had not proved a likelihood of success regarding its invalidity arguments.  The Court also held that the balance of hardships tipped in Abbott's favor because allowing Sandoz's generic product to remain in the market would necessarily take market share from Abbott.

In addition to its preliminary injunction stopping future product sales, the Court also required that Sandoz recall all of its existing product, so long as an adequate bond was set.

*  You can read more about the Federal Circuit decision in which the Federal Circuit overturned the Court's grant of a PI in a related case in the Blog's archives.  You can also read another take on this case at the Orange Book Blog.

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Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2006 WL 3718025 (N.D. Ill. Dec. 15, 2006) (Coar, J.).

Judge Coar denied plaintiff's, Abbott Laboratories ("Abbott"), motion for a temporary restraining order ("TRO") to prevent defendant, Sandoz, Inc. ("Sandoz"), from selling a generic version of Abbott's patented extended release antibiotic (clarithromycin, an erythromycin derivative which Abbott markets as Biaxin XL).  The Court had entered a TRO and, ultimately, a preliminary injunction preventing another party, Teva Pharmaceuticals ("Teva"), from selling a generic version of plaintiff's patented extended release antibiotic, but the Federal Circuit vacated the preliminary injunction.  The Federal Circuit held that Teva raised a substantial question as to the validity of the claims at issue, sufficient to call Abbott's likelihood of success on the merits into question. 

In the instant case, Sandoz argued that the Federal Circuit's prior ruling that there was a question regarding the validity of the claims-at-issue precluded any preliminary injunctive relief.  The Court held that rulings on preliminary relief have no preclusive effect because they are made on an incomplete record, "inherently tentative" and based upon only "an estimate of the likelihood of success."  Despite that ruling, however, the Court noted that "the practical effect of [the Federal Circuit's] holding still militates towards the denial of the TRO in the instant case."  The Court refused to reach a holding inconsistent with the Federal Circuit's without a "substantial showing" on a more complete record.  So, although the Court denied the TRO, it appears to have kept an open mind about a preliminary injunction based upon a more complete record.

*For another take on this case, check out the Orange Book Blog.

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