## United States Court of Appeals for the Federal Circuit

2008-1039 ALTANA PHARMA AG and WYETH, Plaintiffs-Appellants,

v. TEVA PHARMACEUTICALS USA, INC. and TEVA PHARMACEUTICAL S INDUSTRIES, LTD., Defendants-Appellees, and KUDCO IRELAND LIMITED and SCHWARZ PHARMA, INC., Defendants, and SUN PHARMACEUTICAL INDUSTRIES, LTD. and SUN PHARMACEUTICAL ADVANCE D RESEARCH CENTRE, LTD., Defendants-Appellees.

William F. Lee , Wilmer Cutler Pickering Ha le & Door, LLP, of Boston, Massachusetts, argued for plainti ff-appellant. On the brief were J. Michael Jakes , and Kathleen A. Daley , Finnegan, Henderson, Farabow, Ga rrett & Dunner, L.L.P., of Washington, DC, Joseph M. O’Malley, Jr. and Bruce M. Wexler , Paul, Hastings, Janofsky & Walker LLP, of New York, New York. Of counsel were Eric W. Dittmann , Paul, Hastings, Janofsy & Walker LLP, of New York, New York, William G. McElwain and Amy K. Wigmore , Wilmer Cutler Pickering Hale & Door, LLP, of Washington, DC. Mark D. Schuman , Carlson, Caspers, Vandenbur gh & Lindquist, of Minneapolis, Minnesota, argued for defendants-appellants Teva Pharmaceuticals USA, Inc., et al. With him on the brief were Jeffer Ali , Todd S. Werner , Samuel T. Lockner , and Sarah M. Stensland . Of counsel was Christopher J. Sorenson , Merchant & Gould, P.C., of Minneapolis, Minnesota.Michael C. Stuart , Cohen Pontani Liebe rman & Pavane, LLP, of New York, New York, argued for defendants-appellees Sun Pharmaceutical Industr ies, Ltd., et al. With him on the brief were Martin B. Pavane , Julia S. Kim , and Vincent M. Fazzari . Of counsel on the brief was Gregory D. Miller , Podvey Meanor Catenacci Hildner Cocoziello & Chattman, P.C. , of Newark, New Jersey. Appealed from: United States District Court for the District of New Jersey Judge Jose L. Linares

## United States Court of Appeals for the Federal Circuit

2008-1039

ALTANA PHARMA AG and WYETH, Plaintiffs-Appellants, v. TEVA PHARMACEUTICALS USA, INC. and TEVA PHARMACEUTICAL S INDUSTRIES, LTD., Defendants-Appellees, and KUDCO IRELAND LIMITED and SCHWARZ PHARMA, INC., Defendants, and SUN PHARMACEUTICAL INDUSTRIES, LTD. and SUN PHARMACEUTICAL ADVANCE D RESEARCH CENTRE, LTD., Defendants-Appellees. Appeal from the United States District Court for the District of New Jersey in Consolidated case nos. 04-CV-2355, 05-C V-1966, 05-CV-3920, and 06-CV-3672, Judge Jose L. Linares.

__________________________ DECIDED: May 14, 2009

__________________________ Before NEWMAN and GAJARSA, Circuit Judges , and WARD, * District Judge

. Opinion for the court filed by District Judge WARD. Concurring opinion filed by Circuit Judge NEWMAN. WARD, District Judge .*

* Honorable T. John Ward, District J udge, United States District Court for the Eastern District of Texa s, sitting by designation.Plaintiffs-Appellants Altana Pharma AG and Wyeth (collectiv ely, “Altana”) appeal the decision of the Un ited States District Court for the District of New Jersey denying a preliminary injunction. Because the district court did not abuse its discretion, we affirm. I. BACKGROUND Appellants, Altana Pharma AG and Wyeth, accuse appellees, Teva Pharmaceuticals USA, Inc. (“Teva”), Sun Pharmaceutical Industries, Ltd. (“Sun”), et al. (collectively, “Defendants”) of infringing U.S. Patent No. 4,758,579 (“the ’579 patent”). Wyeth is the exclusive licensee of the ’579 pa tent in the United St ates. The ’579 patent issued on February 9, 1988. On January 4, 2004, the U.S. Patent and Trademark Office (“USPTO”) granted a 5-year term extens ion pursuant to 35 U.S.C. § 156 (“the Hatch-Waxman Act”); thus, the ’5 79 patent expires on July 19, 2010. The ’579 patent is directed to the com pound pantoprazole, the active ingredient in Altana’s antiulcer drug Protonix®. The compound pantoprazole belon gs to a class of compounds known as proton pump i nhibitors (“PPIs”) that are used to treat gastric acid disorders in the stomach. PPI s inhibit gastric acid secret ion through their action on the gastric acid pump. When triggered by the body, the gastric acid pump is established in the secretory canaliculus of the stom ach’s parietal cells via the enzyme H + , K + -ATPase. Once triggered, the pump transports protons, H + , from the inside of t he parietal cell into the cell’s secretory canaliculus in exchange for potassium ions, K + , which the pump transports from the canaliculus to the inner portion of the cell. The availability of potassium ions within the canaliculus is a ttributable to the migration of potassium chloride, KCl, into the canaliculus, also from the inside of the parietal cell. As the pump reabsorbs the K + in exchange for H + extrusion, the Cl - remains in the canaliculus,

2008-1039 2resulting in the formation of hydrochloric acid, HCl, within the canaliculus, which is then secreted into the stomach. Although the operation of the gastric acid pump was kn own at the time of the invention at issue, the mechanism by which PPIs inhibit the gastric acid pump was not understood in the art until after the effective fili ng date of the ’579 patent. Part of the uncertainty surrounding the method of action for PPIs is attributable to the fact that PPIs are prodrugs, which are drugs t hat convert to their active form after they are delivered within a patient’s body, which typically exhibi ts a pH of about 5 to about 7. In this regard, PPIs are acid-activated prodrugs that are converted into their active form in the highly acidic environment, having a pH of about 1, within the secretory canaliculus of parietal cells. Once converted to its active form, the PPI thereafter binds to one or more cysteine amino acids in the acid pump. This binding inhibits the operation of the gastric acid pump. The first commercialized PPI compound was omeprazole, which was approved for use by the U.S. Food and Drug Administ ration (“FDA”) in 1989 under the trade name Prilosec®. Omeprazole was first synt hesized by AB Hassle (now known as AstraZeneca) in 1979 and is the subject of U.S. Pat ent No. 4,255,431 (“the ’431 patent”). Omeprazole or Prilosec® is well known today as a blockbuster drug for the treatment of patients that suffer from heartburn, as we ll as other symptoms that stem from gastro-esophageal reflux disease (“GERD”). After the successful commercialization of Prilosec®, many drug companies, including Byk Gulden (Altana’s predecessor), began to develop new PPI s to compete with omeprazole. Altana’s research efforts resulted in t he issuance of U.S. Pa tent No. 4,555,518 (“the ’518 patent”) and the ’579 patent. The application for the ’518 patent was filed

2008-1039 3before the ’579 patent, and contained a pharma cology section t hat compared the effectiveness of 18 claimed compounds agains t four prior art compounds. The ‘518 patent refers to one of the 18 compounds chos en for testing as compound 12. The ’579 patent, which is not related to the ’518 patent, claims PPI compounds that are structurally similar to the compounds claimed in the ’518 patent. Pantoprazole, the compound at issue in this litigatio n, exhibits a structure that is very similar to compound 12 from the ’518 patent. There are three main structural elem ents to the PPI molecular backbone: the benzimidazole ring, the methylsulfinyl bri dge, and the pyridine ring. The general formula of the PPI disclosed in the ’579 patent is reproduced below:

’579 patent at 2:5-15. The issues in this case primarily relate to the pyridine ring (the right-most structure on the abov e compound), specifically, the radicals located on the pyridine ring (indicated by R2, R3, and R4). The ’579 patent teaches that “R3 represents a 1-3C-alkoxy radica l, one of the radi cals R2 and R4 represents a 1-3Calkoxy radical and the other represents a hydr ogen atom (–H) or a 1-3C-alkyl radical.” Id. at 2:28-31.

2008-1039 4An alkyl is a radical consisting of carbon and hydrogen atoms, arranged in a chain with the general formula C n H 2n+1 . A common example is methyl, –CH 3 . An alkoxy is a radical consisting of an al kyl group linked to oxygen. T he most simple is methoxy, – OCH 3 . The only structural difference between compound 12 and pantoprazole is the substituent (or radical) at the 3-position of the pyridine ring. In compound 12, it is a methyl group (–CH 3 ), whereas in pantoprazole, it is a methoxy group (–OCH 3 ). On or about April 6, 2004, Teva filed an Abbrevia ted New Drug Application (“ANDA”) pursuant to the Hatch-Waxman Act, requesting FDA approval to sell a generic version of Protonix® prior to the expirati on of the ’579 patent. Sun filed similarly directed ANDA applications on or about March 1, 2005, and Ju ne 25, 2005. Both Teva and Sun filed paragraph IV certifications in conjunction with their respective ANDA applications. Following the subm ission of these ANDA applications, Altana filed suit against Teva and, subsequently, against Sun. The district court consolidated these

cases. Altana filed a motion for preliminary inj unction on June 22, 20 07. In opposition to this motion, both Teva and Sun conceded in fringement; however, they maintained that the ’579 patent is invalid. 1 Specifically, the defendants argued that the ’579 patent was obvious in light of the teachi ngs in the following prior ar t references: (1) Altana’s ’518

1 On appeal, Sun raises another inva lidity defense, obviousness-type double patenting, in addition to a statutory obviousness def ense. Although the double patenting issue was briefed to the district court in connection with Altana’s motion for preliminary injunction, t he district court did no t address it. Assuming, arguendo , that this issue is properly before this court, our disposit ion of this case renders it unnecessary to consider any issues relating to the obviousness-type double patenting defense. 2008-1039 5patent, (2) the Sachs article, 2 (3) the Bryson article, 3 and (4) the ’431 patent (covering omeprazole). In the district court, the defendant s’ obviousness analysis focused on the selection of compound 12 from the ’518 pa tent as a lead compound for modification. The defendants argued that the Sachs article provided motivation for one of skill in the art to lower the pKa of a PPI to a value of 4 in order to provide better stability of the compound in the patient’s body. The pK a value of a compou nd is measured on a logarithmic scale, and indicates the degree of the willingness of the compound to accept or donate a proton. The lower the numerical pKa of a compound, the more acidic and less basic it is. Thus, at pH 5, a compound with a pK a of 4 would be more stable than the compound with a pKa of 5. The defendants’ position was that Sachs taught that a pKa value of 4 was a desirable characterist ic in a PPI because it would improve the stability of a PPI in the body prior to its intr oduction to the parietal cells of the stomach. The defendants further argued t hat the Bryson article taught how to lower the pKa value. In particular, they argued that Bryson taught that a methoxy group at the 3- position of a pyridine ring provides a lowe r pKa than a methyl group in that same position. Finally, the defendants argued that the ’431 patent demonstrated the feasibility of substituting a methoxy group for a methyl group at the 3-position of the pyridine ring in a PPI.

2 George Sachs, Pump Blockers and Ulcer Disease , 310 New Eng. J. Med. 785 (1984). 3 Dr. A. Bryson, The Ionization Constants of 3-Substituted Pyridines, 3- Substituted Quinolines and 4-Substituted Isoquinolines , 82 J. Am. Chem. Soc. 4871 (1960). 2008-1039 6The district court held a hearing to address Altana’s motion for preliminary injunction. After considering the evidence and the arguments, the district court denied the requested relief. With respect to the lik elihood of success on the merits, the district court found that the defendants had demonstrated a substantia l question of invalidity and the plaintiffs had not shown that it lacked substantial merit. In particular, the court found that one of skill in t he art would have selected compound 12 as a lead compound for modification. Next, the court agreed with the defendants’ interpretation of the Sachs reference, and found that it provided motivation to one of skill in the art to modify compound 12 to achieve a pKa of 4. The distri ct court also found that the Bryson article taught that a compound with a methoxy group in the 3-position of a pyridine ring, as opposed to a methyl group in that position, w ould lower the pKa value to a pKa of 4. That court also relied on the ’4 31 patent to show that such a substitution was feasible. The district court’s examination of the ob jective indicia of non -obviousness did not cause it to disregard the prim a facie showing of obviousne ss, and the court accordingly found that Altana failed to establis h a likelihood of success on the merits. The district court also considered, but rejected, Altana’s position on irreparable harm. Altana argued that t he following harms would be irreparable if no preliminary injunction was issued: irreversible price erosi on, substantial loss of profits, decrease in market share, inability to service debts, employee layoffs, and loss of research opportunities. The district c ourt found that these harms we re not irreparable and that the defendants would be able to satisfy a judgment should Altana prevail at trial. As a result, the district court concluded that Alt ana had failed to show that it would suffer irreparable harm if the in junction was not issued.

2008-1039 7Based on Altana’s failure to establish eit her a likelihood of success on the merits or irreparable harm, the district court denied the motion for pr eliminary injunction. This appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1292(c)(1). II. DISCUSSION The decision to grant or deny a prelim inary injunction is within the sound discretion of the district court. See, e.g. , Abbott Labs. v. Andrx Pharms., Inc. , 452 F.3d 1331, 1334 (Fed. Cir. 2006). An appellant ca rries a heavier burden when seeking to reverse the denial of a preliminary injuncti on than seeking to reverse the grant of a preliminary injunction. New England Braiding Co., In c. v. A.W. Chesterton Co. , 970 F.2d 878, 882 (Fed. Cir. 1992) (“When a pr eliminary injunction is denied, the movant . . . must show not only that one or mo re of the factors relie d on by the district court was clearly erroneous, but also that a denial of the preliminary relief sought would amount to an abuse of the court' s discretion upon reversal of an erroneous finding.”). To obtain a preliminary injunction, a court examines four factors: (1) a reasonable likelihood of success on the merits; (2) irreparable harm if an in junction is not granted; (3) a balance of hardships tipping in its favor; and (4) the injunction’s favorable impact on the public interest. See Amazon.com, Inc. v. Barnesandnoble.com, Inc. , 239 F.3d 1343, 1350 (Fed. Cir. 2001) (citing Reebok Int’l Ltd. v. J. Baker, Inc. , 32 F.3d 1552, 1555 (Fed. Cir. 1994)). Although the factors are not applied mechanically, a movant must establish the existence of both of the first two factors to be entitled to a preliminary injunction. Amazon , 239 F.3d at 1350.

2008-1039 8A. LIKELIHOOD OF S UCCESS ON THE MERITS A patent holder seeking a preliminary in junction bears the ultimate burden of establishing a likelihood of success on the meri ts with respect to the patent’s validity. Entegris, Inc. v. Pall Corp. , 490 F.3d 1340, 1351 (Fed. Cir. 2007). If the alleged infringer raises a “substantial qu estion” of invalidity, the preliminary injunction should not issue. Id. ; Genentech, Inc. v. Novo Nordisk A/S , 108 F.3d 1361, 1364 (Fed. Cir. 1997). The burden on the accused infringer to show a substantial question of invalidity at this stage is lower than what is requir ed to prove invalidity at tria l. “Vulnerability is the issue at the preliminary injunction stage, whil e validity is the issue at trial.” Amazon.com , 239 F.3d at 1359 (“In resisting a preliminary injunction . . . one need not make out a case of actual invalidity. . . . The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself.”). Once the accused infr inger satisfies this requirement, the burden shifts to the patentee to show that the defense lacks substantial merit. Entegris , 490 F.3d at 1351. Altana argues that the follo wing alleged errors require the reversal of the district court’s order denying the pr eliminary injunction: (1) the distri ct court’s failure to take into account an accused infringer’s clear and convin cing burden to prove invalidity; (2) the district court’s selection of compound 12 as a lead compound; and (3) the district court’s interpretation of the Bryson article. 1. Burden of Proof Altana first argues that the district court applied an in correct standard in assessing whether Altana had shown a likelihood of success on the merits. The district court set forth the standard it a pplied: “In order to establish likelihood of success on the

2008-1039 9merits, Plaintiffs must show that Defendants’ invalidity def enses lack substantial merit. In other words, if Defendants have raised a s ubstantial question of in validity, Plaintiffs are not entitled to a preliminary inj unction.” (citations omitted). According to Altana, the standard articula ted by the district court incorrectly placed the burden on Altana to show that the obviousness defense lacks substantial merit, rather than putting the burden on t he defendants to establish a substantial question of invalidity. In Abbott Laboratories , the majority opinion specifically addressed the issue of this court’s precedent with resp ect to the burden of s howing a likelihood of success in the face of an attack on the validity of a patent. Abbott Labs. , 452 F.3d at 1334 n.2 (“The majority opinion . . . is duty bound by our precedent which states exactly this proposition.”). The preceden t of this court holds that if the accused infringer “raises a ‘substantial question’ concerning validity, enf orceability, or infringement (i.e., asserts a defense that [the movant] can not show ‘lacks substantia l merit’) the preliminary injunction should not issue.” Genentech , 108 F.3d at 1364 (citing New England Braiding , 970 F.2d at 882-83); see also Amazon.com , 239 F.3d at 1350-51. More recently, the court applied this standard in Entegris . 490 F.3d at 1351. The district court did not apply a legally incorrect standard , and we reject Altana’s first argument. 2. District Court’s Obviousness Analysis Altana challenges the district court’s obv iousness analysis on the merits. Altana argues that the district court clearly erred when it determi ned that the defendants’ obviousness defense had substantial merit. In par ticular, Altana argues that the district court allowed the defendants to select com pound 12 of the ’518 patent as a lead compound when the prior art suggested the av ailability of numerous other compounds that were at least as promising to modify as compound 12. In addi tion, Altana contends

2008-1039 10that the district court’s findings with res pect to the teaching of Bryson are clearly erroneous. We examine each argument. Obviousness is ultimately a questi on of law, based on underlying factual determinations. Richardson-Vicks Inc. v. Upjohn Co. , 122 F.3d 1476, 1479 (Fed. Cir. 1997). The factual determinations that form the basis of the l egal conclusion of obviousness include (1) the scope and content of the prior art; (2) the level of ordinary skill in the art; (3) the diffe rences between the claimed in vention and the prior art; and (4) evidence of secondary factors, known as objective indicia of non-obviousness. Graham v. John Deere Co. , 383 U.S. 1, 17-18 (1966). Th is court recently explained that “[w]here, as here, the patent at issue claims a chem ical compound, the analysis of the third Graham factor (the differences betw een the claimed invention and the prior art) often turns on the structural similarities and differences between the claimed compound and the prior art.” Eisai Co. Ltd. v. Dr. Reddy’s Labs., Ltd. , 533 F.3d 1353, 1356-57 (Fed. Cir. 2008). Thus, to establish a pr ima facie case of obviousness in cases involving new chemical com pounds, the accused infringer must identify some reason that would have led a chemist to modify a known compound in a particular manner. See Yamanouchi Pharm. Co., Ltd. v. Danbury Pharmacal, Inc. , 231 F.3d 1339, 1344 (Fed. Cir. 2000). This standard is consistent with the legal princi ples announced in the Supreme Court’s decision in KSR Int’l Co. v. Teleflex Inc. , 550 U.S. 398 (2007). See Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd. , 492 F.3d 1350, 1356 (Fed. Cir. 2007); Eisai , 533 F.3d at 1359 (“In other words, post-KSR, a prima facie case of obviousness for a chemical compound still, in general, begins with the reasoned identification of a lead compound.”).

2008-1039 11Obviousness based on structural similarity may be proven by the identification of some motivation that would have led one of ordinary skill in the art to select and modify a known compound in a particular way to achieve the claimed compound. Eisai , 533 F.3d at 1357. The requisite motivation can come from any number of sources and need not necessarily be exp licit in the art. Id. (citing Aventis Pharma Deutschland GmbH v. Lupin, Ltd. , 499 F.3d 1293, 130 1 (Fed. Cir. 2007)). Instead, “it is sufficient to show that the claimed and prior art compounds possess a ‘sufficiently close relationship . . . to create an expectation,’ in light of the totality of the prior art, that the new compound will have ‘similar prop erties’ to the old.” Id. (quoting In re Dillon , 919 F.2d 688, 692 (Fed. Cir. 1990) (en banc)). Our review of the district court’s decisi on is limited, and it is important to place the district court’s findings in perspective. Applications for preliminary injunctions are typically presented on an abbreviated record without the benefit of a full trial. In this case, the district court carefully explained that its obviousness findings were preliminary. In the district court, the def endants attempted to prove that the claims were vulnerable because one of skill in the art would have selected a number of co mpounds disclosed in the ’518 patent, including compound 12, as a starting point for further development. Based on the record before it, the district c ourt found that “Defendants have raised a substantial argument that co mpound 12 was a natural choice for further development in this regard.” Ample evidence supported this finding. First, the ’518 patent claimed that its compounds, including compound 12, were improv ements over the prior art, specifically omeprazole (the first successful PPI). In addition, compound 12 wa s disclosed as one of the more potent of the eighteen compounds of the ’ 518 patent for which data was

2008-1039 12provided during prosecution. Moreover, t he patent examiner reli ed on the compounds of the ’518 patent duri ng the prosecution of the ’579 patent. Cf. Eisai , 533 F.3d at 1357 (“Indeed, Teva’s pharmacology expert . . . declined to opine on lansoprazole’s relevance to an examiner assessing the patentability of rabeprazole.”). Beyond this evidence, the district c ourt considered the opinions of qualified experts. The defendants supported their ob viousness argument with the Declaration of Prof. Lester A. Mitscher, Ph.D. Dr. Mitscher was amply qualified to express opinions on the subject matter involved in this case. Dr. Mitscher expressed his opinion that Altana’s ’518 patent (which disclosed co mpound 12) was “on the cutting edge of PPI development in June 1984.” Dr. Mi tscher provided the district court with an overview of the history of PPIs and the state of the art as of June 1984. In particular, Dr. Mitscher stated that one of skill in t he art would have selected the 18 exemplary compounds (including compound 12) of the ’518 patent over omeprazole from which to pursue further development efforts des igned to improve the quality and effectiveness of PPIs. Although Altana’s expert suggested that o ne of skill in the art would have selected omeprazole over the compou nds of the ’518 patent, in part because of toxicity concerns, the district court apparently accept ed Dr. Mitscher’s contrary opinion. The district court’s reliance on Dr. Mitsc her’s opinion was not clearly erroneous. Beyond the finding that those of sk ill in the art would have pursued the 18 exemplary compounds in the ’518 patent, the dist rict court also found that one of skill in the art would have found compound 12, in par ticular, a natural choice for further development efforts. This finding is s upported by evidence that compound 12 was one of the more potent PPI compounds disclos ed in the ’518 patent. Although potency is not dispositive, the distri ct court believed–not unreasonabl y–that the potency of the

2008-1039 13compound was a factor that would have led one of skill in the art to select compound 12 from the group for further study . It bears mention that Al tana itself had selected compound 12 for further developm ent efforts, although the inventor stated that he ultimately developed pantoprazole by using an unwanted by-product from his scale up work as a starting point, rather than compound 12. Altana suggests that the prior art would not have directed one of skill in the art to select compound 12 over the approximately 90 compounds claimed to be improvements in the ’518 and other pr ior art patents, or, for that matt er, over the thousands of other compounds included in the prior art disclosures. In light of Dr. Mitscher’s declaration, however, the district court had a sufficient evidentiary basis for rejecting that position. Moreover, to the extent Altana suggests that the prior art mu st point to only a single lead compound for further development efforts, that restrictive view of the lead compound test would present a rigid test similar to the teaching-suggestion-motivation test that the Supreme Cour t explicitly rejected in KSR

. Cf. KSR , 550 U.S. at 419 (“The obviousness analysis cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explic it content of issued patents. The diversity of inventive pursuits and of modern technology counsels agains t limiting the analysis in this way.”). The district court in this case employed a flexible approach–one that was admittedly preliminary–and found that the defendants had raised a substantial question that one of skill in the art would have used the more potent compounds of the ’518 patent, including compound 12, as a starting point from which to pursue furt her development efforts. That finding was not clearly erroneous.

2008-1039 14The district court determined that the Sach s article taught those of skill in the art that an effective PPI should have a pKa of 4 because a pKa of 4 would lead to better stability of the compound within the body. Thus, according to the district court, one of skill in the art would have been motivated to modify the prior art compounds to reduce their pKa to 4. It is not disputed that the author of the Sachs article, Dr. George Sachs, is one of the leading researchers in the PPI development field. As such, the district court was entirely justified in se lecting the Sachs article as re levant prior art. Moreover, although Altana disputed the teac hings of Sachs before the district court, Altana does not challenge on appeal the district court’s findings with respect to the Sachs teachings. Instead, Altana contends that t he district court made a factual error in interpreting the Bryson article which requires reversal. We now turn to that issue. The Bryson article teaches the pKa values of various chemical groups, including methoxy groups, at the 3-positio n of a simple pyridine ring. The defendants argued that Bryson taught that a methoxy group at the 3-position of t he pyridine ring would have a lower pKa value than if it had a methyl gr oup at that position. The district court accepted this argument, but stated “[a]ccordi ng to Bryson, the pKa value of a methoxy group at such a position is 4; however, the pKa of a methyl group at this position is 5.” The district court also stated: “Bryson un disputably taught that a compound with a methoxy group at the 3 position of the py ridine ring would have a lower pKa value (namely a pKa of 4) that [s ic] a compound with a methyl gr oup at that position.” The district court concluded that “[w]hen Bryson’s teachings are combined with the structure of compound 12 and combi ned with Dr. Sachs’s teachi ngs, Defendants have raised a substantial question that this combination was at the very least obvious to try and that

2008-1039 15such would lead to a predictable variation of compound 12, i.e., a compound with better pH5 stability.” Altana correctly points out that the district court’s findings that Bryson discloses lowering the pKa to 4 through the substitution of a methoxy group are in error. Bryson actually discloses values of 4.83 and 4.91 for simple pyridine rings containing a methoxy group in the 3-positi on. Because pKa values ar e measured on a logarithmic scale, there is a very substantial mathemat ical difference in the magnitude of a pKa value of 4 versus a pKa value of 4.83. A va lue of 4.83 is over 6.7 times larger than a value of 4. This error, however, does not require re versal unless Altana also shows that the district court’s denial of the request ed injunction was an abus e of discretion. New England Braiding Co. , 970 F.2d at 882. Not withstanding the district court’s statements, the declaration of Dr. Mitscher clearly does not make such an error in its analysis of the Bryson reference. Rather, the evidence presented by the defendant s supports a finding that one of skill in t he art would read Bryson to teach the lowering of a pKa through the substitution of a methoxy group for a methyl group at the 3-posit ion of the pyridine ring. Dr. Mitscher stated that “Bryson indicate s that the addition of a methoxy group at the 3-position decreases the pKa of pyridine by 0.27-0.35 pKa units (with an average pKa for 3-methoxy pyridine of 4.87).” Consistent with Dr. Mits cher’s statements, the Bryson article discloses precisely that. The expert also accurately described Bryson’s disclosure of the pKa values of the pyridine ring with a methyl group at the 3-position: “Bryson indicates that the addition of a me thyl group at the 3-pos ition of pyridine increases the pKa of pyridine by 0.34-0.53 pKa units (with an average pKa for 3-methyl pyridine of 5.66 compared to an average pKa of 5. 18 for unsubstituted pyridine).” Thus,

2008-1039 16the difference in the average pKa values of methyl and methoxy su bstituted pyridine rings disclosed by Bryson is 0.79. Under Bryson, the pKa of th e methoxy substituted pyridi ne ring is substantially lower than the methyl substituted pyridine ring. The district court’s references to pKa values of “5” and “4,” although not technica lly accurate, in fact correlate with the difference in magnitude of th e pKa values of the substi tuted pyridines described in Bryson. Indeed, elsewhere in t he district court’s opinion, the court stated that “if Sachs teaches pH5 stability via lowering the pKa of the pyridine ring, and Bryson teaches how to lower such pKa, then the purportedly unex pected property of pantoprazole is in fact an expected property.” The defendants as well as the dist rict court understood that the obviousness position depended on Bryson’s teaching of a way to substantially lower the pKa value of the pyridine ring. 4 The evidence thus supports the district court’s overriding decision that t he defendants had made out a sufficient case of obviousness to defer the matter for trial on the merits, as opposed to granting the preliminary relief sought by the plaintiffs. Moreover, the distri ct court found that Altana had failed to prove irreparable harm. As we shall explain, t hat finding is not clearly erroneous and under this court’s precedent is a prerequisite for preliminary relief. Accordingly, although we agree with Altana that some of the district court’s findings with respect to Bryson were incorrect, we do not disturb the district court’s decision on this ground.

4 We also find sufficient evidentiary s upport for the district court’s implicit finding that Bryson’s discussion relating to simple pyridine rings would have been relevant to a medicinal chemist designing a PPI. 2008-1039 17B. IRREPARABLE HARM On appeal, Altana argues that the district court abused its discretion when it found that Altana had failed to demonstrate irreparable ha rm. The district court supported its findings on irreparable harm by st ating that the plaintiffs had not shown that the defendants were unable to respond in money damages, that the harms to the defendants were exaggerated, and that Altana likely had a bus iness plan in place to deal with the launch of generic competition. The district court also had difficulty accepting the fact that Nycomed, which pur chased Altana during the pendency of this case, had failed to account for potential generic launches. Altana argues that the district court committed a legal error by categorically dismissing certain harms—price erosion, loss of market share, loss of profits, loss of research opportunities and possible layoffs—that Altana would suffer as not irreparable. Altana’s primary contention is t hat the district court incorrect ly stated that the types of harms are as a matter of law not irreparable. The district cour t stated: “the Federal Circuit, as well as courts in this distric t, have declared that the types of harms advanced by Plaintiffs in the instant lawsuit are not irreparable and thus, cannot form the basis for granting an injunction.” Altana views the district cour t’s statement in isolation, but a careful review of the district court’s entire analysis on this poin t reveals that the district court correctly understood that this court has upheld findings of irreparable harm based on these very factors. See Sanofi-Synthelabo v. Apotex, Inc. , 470 F.3d 1368, 1382-83 (Fed. Cir. 2006) (affirming the district courts finding of irreparable harm based, in part, on price erosion). Far from supporting a reversal of this case, the la w cited by the district court highlights this court’s deferenc e to a district court’s dete rmination whether a movant has

2008-1039 182008-1039 19 sufficiently shown irreparable harm. Compare id. with Eli Lilly & Co. v. Am. Cyanamid Co. , 82 F.3d 1568, 1578-79 (Fed. Cir. 1996) (affirming the district court’s finding that the movant failed to establish irreparable ha rm based, in part, on the loss of research opportunities). Here, we find no error in the di strict court’s findings that these harms are not irreparable to Altana. Altana further argues that the district court erred in weighing Altana’s awareness of the future harm it would incur at the expiration of the Hatch-Waxman Act stay, which followed the filing of the defenda nts’ ANDA applications. The district court, however, did not directly rely on these facts to show th at Altana woul d not be irreparably harmed. Rather, the district court f ound that Altana’s argument that its business would be crushed by the entry of generic versions of Protonix® was exaggerated in light of the expiration of the Hatch-Waxman stay. 5 The manner in whic h the district court addressed the credibility of Altana’s argumen t regarding the impact of generic versions entering the market on Altana’s business was not clearly erroneous. III. CONCLUSION For the aforementione d reasons, we affirm.
AFFIRMED

5 In the July 31, 2007 hearing conducted by the district court, Altana’s counsel unequivocally stated that neither it nor its partners had any plans to launch a generic version of Protonix® , “not under any guise.” In counsel’s exchange with the district court, he admitted to the district cour t that if Altana launch ed its own generic, “it would be a different analysis.” According to the briefing before this court, however, Altana did just that. Subseque nt to the district court’s denial of Altana’s motion for preliminary injunction, Altana’s licensee, Wyeth, launched a generic version of Protonix®.

## United States Court of Appeals for the Federal Circuit

2008-1039

ALTANA PHARMA AG and WYETH, Plaintiffs-Appellants,

v. TEVA PHARMACEUTICALS USA, INC. and TEVA PHARMACEUTICALS INDUSTRIES, LTD., Defendants-Appellees, and KUDCO IRELAND LIMITED and SCHWARZ PHARMA, INC., Defendants, and SUN PHARMACEUTICAL INDUSTRIES, LTD. And SUN PHARMACEUTICAL ADVANCED RESEARCH CENTRE, LTD., Defendants-Appellees.

Appeal from United States Distric t Court for the District of New Jersey in Consolidated case nos. 04-CV-2355, 056-CV-1966, 05-CV-3920, and 06-CV-3672, Judge Jose L. Linares.

NEWMAN, Circuit Judge , concurring. In view of the discretionary weight that mu st be given to a distri ct court’s decision with respect to whether to grant a plaintiff’s request for relief pendente lite , I concur in the court’s affirmance of the district court’s deni al of the injunction. Although the evidence presented to the district court does not, in my view, establish invalidity of the patent on the2008-1039 2 pharmaceutical product pantoprazole, see , Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal , 546 U.S. 418, 429 (2006) ("the burdens at the preliminary injunction stage track the burdens at trial. ") at this preliminary stage deference is warranted to the district court’s weighing of the conflicting expert opinions interpreting the evidence. On this basis, I concur in sustaining this discretionary action.