Abbott Lab. v. Andrx Pharm., Inc. (Fed. Cir. 2007).

    By Kevin Noonan --

Illustrating once again distinctions between permanent and preliminary injunctions in its jurisprudence, the Federal Circuit used a combination of its patent-specific precedent and regional circuit law to affirm a preliminary injunction against only one of three co-defendants.  In Abbott Lab. v. Andrx Pharm., Inc., the Court held that one co-defendant couldn't "piggy-back" its burden of showing a likelihood of success on the merits for its invalidity or unenforceability defenses on a successful showing of either defense made by another co-defendant, leading to different outcomes for the parties.

Abbott sued Andrx Pharmaceuticals, Inc, Ranbaxy Laboratories, Inc., and Teva Pharmaceuticals USA, Inc. for ANDA filings with the FDA for generic versions of Abbott's Biaxin XL, an extended release formulation of the antibiotic clarithromycin.  Abbott asserted against Andrx claims 1, 4, and 6 of U.S. Patent No. 6,010,718; claim 2 of U.S. Patent No. 6,551,616, and claims 8 and 16 of U.S. Patent No. 6,872,407.  The District Court granted Abbott's preliminary injunction motion, holding that Abbott had established a likelihood of success on the merits that Andrx infringed the claims at issue, and that Andrx had failed to establish the likelihood that it would be successful in showing that the claims were invalid.  The District Court's holding was limited to infringement under the doctrine of equivalents for the '718 and '616 patents.

The bases for Andrx's appeal were two-fold:  first, that the District Court was wrong, but more importantly, that Abbott was collaterally estopped from asserting these patent claims due to that court's denial of Abbott's preliminary injunction motion as to the other defendants.  Specifically, the District Court had denied the injunction as to Ranbaxy on the grounds that Ranbaxy had shown a likelihood that it would be able to establish at trial that the '616 and '407 patents were unenforceable for inequitable conduct.  The Court had also denied the injunction as to Teva because it found Teva had shown the required likelihood that claim 2 of the '616 patent was invalid for obviousness, and the Federal Circuit had held, in Abbott's appeal of the District Court's decision denying the injunction as to Teva, that Teva had raised a substantial question of invalidity as to claims 2, 4, and 6 of the '718 patent.

Andrx's appeal was limited solely to the first prong of the preliminary injunction standard:  the likelihood that Abbott would prevail on the merits of its patent infringement case.  Andrx's arguments on appeal were based on Blonder-Tongue Laboratories v. University of Illinois Foundation, that a patentee is collaterally estopped from asserting patent claims against a defendant that had been found invalid or unenforceable against a different defendant.

The Federal Circuit applied the law of the 7th Circuit since the issue was not unique to patent law.  First, the Federal Circuit distinguished Blonder-Tongue on the grounds that the Supreme Court had emphasized the importance of the estoppel-creating decision being a final determination on the merits.  The patentee must have had the opportunity to fully litigate the question of invalidity or unenforceability before a court could preclude it from asserting its patent against another party.  In addition, the collaterally-estopped issues in the later case must be identical to those issues in the prior case.

Andrx acknowledged that Blonder-Tongue required a final determination, but that the holding should be extended to preliminary injunctions because these decisions are "final" as to the question of whether Abbott was entitled to the preliminary injunction.

Under 7th Circuit law, preliminary injunctions were recognized to be made on an incomplete record and to be tentative determinations at best, being decided not on a conclusive determination but on an estimate of the likelihood of success.  The Federal Circuit found that there were "rare instances" where the 7th Circuit would find estoppel in the absence of a final determination.  Under 7th Circuit law, those rare instances arose when the preliminary injunction determination raised an "insuperable obstacle" to a plaintiff's success on the merits.

The Court determined that those circumstances did not apply.  The Federal Circuit found that the District Court in its denial of Abbott's motion for preliminary injunction against Ranbaxy and Teva had not evinced the required intention to "firmly and finally decide" the issues of invalidity and unenforceability.  Under 7th Circuit law, therefore, the Federal Circuit refused to find collateral estoppel against Abbott in its preliminary injunction motion and affirmed.

Andrx's other contention was that the District Court was incorrect, which the Federal Circuit reviewed under the abuse of discretion standard.  Andrx argued on appeal that its product did not infringe because Abbott's patent claims recited the use of a "pharmaceutically-acceptable polymer" whereas Andrx's ANDA generic comprises glyceryl monostearate (GMS).  The Federal Circuit construed the term "pharmaceutically-acceptable polymer" in Abbott's claims and determined that Andrx's GMS was not outside the scope of equivalents.  In so doing, the Court disagreed with the District Court's claim construction, and asserted that the use of Markush language ("selected from the group consisting of") in the specification did not have the limiting effect that such language has in a claim.  In addition, the Court found that the patentee had used the term "means" in the specification consistently when reciting explicit definitions, but had used the word "is" when reciting examples of pharmaceutically-acceptable polymers.  In the Court's view, these differences did not "unambiguously signify" that the patentee had intended to be a lexicographer and limit the scope of the pharmaceutically-acceptable polymers used in the invention.  According to the Court, this determination was supported by the testimony of both parties' experts, neither of whom maintained that the language was explicitly definitional.  Based on this more expansive meaning of the term "pharmaceutically-acceptable polymer" in the claims, the Federal Circuit found that the District Court had not abused its discretion in granting the preliminary injunction based on the likelihood that Abbott would prevail on the merits, that Andrx's generic clarithromycin formulation infringes Abbott's claims under the doctrine of equivalents.  In doing so, the Court explicitly rejected Andrx's contentions that a finding of equivalents would vitiate the "pharmaceutically-acceptable polymer" limitation, or violate the specific exclusion principle (prohibiting a finding as an equivalent of a compound excluded from the claimed limitation).

Abbott Lab. v. Andrx Pharm., Inc. (Fed. Cir. 2007)
Panel: Chief Judge Michel, Circuit Judge Prost, and District Judge Ellis
Opinion by Circuit Judge Prost