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Abuse Of Discretion Returns To Preliminary Injunction Review, At Least For One Case

Posted on | November 3, 2008 | No Comments

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For those that followed our previous posts on the Federal Circuit's unsettled review of preliminary injunction appeals (here, here, here and here), the Court's recent decision in Abbott Labs v. Sandoz, sheds some more light on the conflict within the CAFC.  Perhaps more than any other current patent issue, a PI appeal may hinge almost completely on which panel members you draw.

Judge Newman, writing for the majority (Newman, Archer: Gajarsa dissenting), starts with the standard of review:

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.”). [Opinion, p. 4.]

While reciting this standard might not be newsworthy, actually following it is.

While the case specific portion of the opinion is interesting, the real thrust is in the discussion of the conflicting precedent within the CAFC on preliminary injunctions, in particular the level of "vulnerability" to validity that must be raised (or disproven) as part of the likelihood of success factor.  The court concludes this section as follows: 

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 a preliminary injunction, then applies the different and incorrect criterion of whether the defendant raised a “substantial question” that may render the patent “vulnerable”. That standard conflicts with precedent of the Supreme Court and all of the regional circuits, all of which require that likelihood of success on the merits be determined and weighed along with the equitable factors. It is not the law that raising a “substantial question” will “negate the patentee’s likelihood of success.” Diss. op. at 3. Raising a substantial question may avoid dismissal on the pleadings, but contrary to the view of the dissent, establishing that there is an issue for trial is not the same as establishing the likelihood of prevailing at trial. [Opinion, pp. 50-51.]

This portion of the opinion also contains a rather lengthy review of the preliminary injunction factors employed by the Supreme Court and the CAFC's sister circuits, and it seems to us that the whole issue is building towards en banc review–perhaps this is the case.

More reading:

2007-1300 Decision

This is the CAFC's third decision on a preliminary injunction concerning these patents, see also Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 473 F.3d 1196 (Fed. Cir. 2007) and Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 452 F.3d 1331 (Fed. Cir. 2006).

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