United States Court of Appeals for the Federal Circuit 

2007-1300 

ABBOTT LABORATORIES, 

Plaintiff-Appellee, 

v. 

SANDOZ, INC., 

Defendant-Appellant. 

Ted G. Dane, Munger, Tolles & Olson LLP, of Los Angeles, California, argued for 

plaintiff-appellee. With him on the brief were Jeffrey I. Weinberger; and Jennifer L. 

Polse, Jason Rantanen, and Genevieve A. Cox, of San Francisco, California. Of 

counsel was Andrew W. Song, of Los Angeles, California. 

Scott B. Feder, Lord, Bissell & Brook LLP, of Chicago, Illinois, argued for 

defendant-appellant. With him on the brief were Keith D. Parr, Hugh S. Balsam, and 

Kevin M. Nelson. Of counsel on the brief was Shashank Upadhye, Sandoz, Inc., of 

Princeton, New Jersey. Of counsel were David B. Abramowitz, Myoka M. Kim, and 

James T. Peterka, of Lord, Bissell & Brook LLP, of Chicago, Illinois. 

 

Jeffrey L. Light, Patients Not Patents, Inc., of Washington, DC, for amicus curiae 

Patients Not Patents, Inc. 

Gregory A. Castanias, Jones Day, of Washington, DC, for amicus curiae United 

Inventors Association. With him on the brief was Christopher S. Perry. 

Appealed from: United States District Court for the Northern District of Illinois 

Judge David H. Coar 
United States Court of Appeals for the Federal Circuit

 

 2007-1300 

 ABBOTT LABORATORIES, 

Plaintiff-Appellee, 

 v. 

 SANDOZ, INC., 

Defendant-Appellant. 

Appeal from the United States District Court for the Northern District of Illinois in case no. 

05-CV-5373, Judge David H. Coar. 

 __________________________ 

 DECIDED: October 21, 2008 

 __________________________ 

Before NEWMAN, Circuit Judge, ARCHER, Senior Circuit Judge, and GAJARSA, Circuit 

Judge. 

Opinion for the court filed by Circuit Judge NEWMAN, in which Circuit Judge ARCHER 

concurs in the judgment and joins except as to Parts I and VI. Dissenting opinion filed by 

Circuit Judge GAJARSA. 

This appeal is from the grant of a preliminary injunction, pending final resolution of 

the several challenges raised by Sandoz, Inc. to the validity, enforceability, and 

infringement of the Abbott Laboratories patents in suit.1

 We conclude that abuse of 

 1 Abbott Laboratories v. Sandoz, Inc., 500 F. Supp. 2d 807 (N.D. Ill. 2007) 

(grant of preliminary injunction); 500 F. Supp. 2d 846 (N.D. Ill. 2007) (denial of stay pending 

appeal); 529 F. Supp. 2d 893 (N.D. Ill. 2007) (grant and denial of various motions for 

summary judgment). 
2007-1300 2

discretion has not been shown in the district court's decision to grant the injunction 

pendente lite. That decision is affirmed. 

BACKGROUND 

This suit concerns two Abbott Laboratories patents on extended release formulations 

of the antibiotic drug clarithromycin, sold by Abbott with the brand name Biaxin7XL. The 

patent on clarithromycin itself expired in 2005; only extended release formulations are at 

issue. The purpose of the extended release formulation is to extend the period of drug 

effectiveness after ingestion and thereby to reduce the requisite frequency of dosage. 

Sandoz filed an Abbreviated New Drug Application (ANDA) for its extended release 

formulation of clarithromycin; the Food and Drug Administration approved the ANDA on 

August 25, 2005, and on September 16, 2005 Abbott filed suit in the United States District 

Court for the Northern District of Illinois, charging Sandoz with infringement of United States 

Patent No. 6,010,718 (the '718 patent) and Patent No. 6,551,616 (the '616 patent). Abbott 

also charged infringement of Patent No. 6,872,407, but has withdrawn this patent from suit. 

The '718 patent claims an extended release pharmaceutical composition comprising 

an erythromycin derivative and a pharmaceutically acceptable polymer, whereby after 

ingestion certain specified parameters of drug bioavailability are met. Claims 1, 4, and 6 of 

the '718 patent are in suit: 

1. A pharmaceutical composition for extended release of an erythromycin 

derivative in the gastrointestinal environment, comprising an erythromycin 

derivative and from about 5 to about 50% by weight of a pharmaceutically 

acceptable polymer, so that when ingested orally, the composition induces 

statistically significantly lower mean fluctuation index in the plasma than an 

immediate release composition of the erythromycin derivative while 

maintaining bioavailability substantially equivalent to that of the immediate 

release composition of the erythromycin derivative. 
2007-1300 3

4. A pharmaceutical composition for extended release of an erythromycin 

derivative in the gastrointestinal environment, comprising an erythromycin 

derivative and from about 5 to about 50% by weight of a pharmaceutically 

acceptable polymer, so that upon oral ingestion, maximum peak 

concentrations of the erythromycin derivative are lower than those produced 

by an immediate release pharmaceutical composition, and area under the 

concentration-time curve and the minimum plasma concentrations are 

substantially equivalent to that of the immediate release pharmaceutical 

composition. 

6. An extended release pharmaceutical composition comprising an 

erythromycin derivative and a pharmaceutically acceptable polymer, the 

composition having an improved taste profile as compared to the immediate 

release formulation. 

The '616 patent is a continuation-in-part of the '718 patent, with claims directed to the 

method of reducing gastrointestinal side effects. Claim 2 is in suit, shown with claim 1 from 

which it depends: 

1. A method of reducing gastrointestinal adverse side effects comprising 

administering an effective amount of extended release pharmaceutical 

composition comprising an erythromycin derivative and a pharmaceutically 

acceptable polymer. 

2. The method according to claim 1, wherein the erythromycin derivative is 

clarithromycin. 

In response to the charge of infringement Sandoz presented the defenses of invalidity 

based on anticipation and obviousness, unenforceability based on inequitable conduct, and 

noninfringement. This appeal is from the district court’s grant of Abbott’s motion for a 

preliminary injunction, preserving the status quo during the pendency of this litigation. 

Sandoz challenges the district court’s rulings on all issues. 
2007-1300 4

I 

VALIDITY ISSUES 

The district court reviewed the factors relevant to the grant or denial of a preliminary 

injunction, viz., (1) likelihood of success on the merits of the underlying litigation, (2) 

whether irreparable harm is likely if the injunction is not granted, (3) the balance of 

hardships as between the litigants, and (4) factors of the public interest. See Oakley, Inc. 

v. Sunglass Hut Int'l, 316 F.3d 1331, 1338-39 (Fed. Cir. 2003); H.H. Robertson Co. v. 

United Steel Deck, Inc., 820 F.2d 384, 387-88 (Fed. Cir. 1987). At the stage of the 

preliminary injunction, before the issues of fact and law have been fully explored and finally 

resolved, "[t]he purpose of a preliminary injunction is merely to preserve the relative 

positions of the parties until a trial on the merits can be held." University of Texas v. 

Camenisch, 451 U.S. 390, 395 (1981). 

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 
2007-1300 5

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.”). 

Sandoz assigns legal error to the district court's rulings that Abbott is likely to prevail 

on the issues of validity, infringement, and inequitable conduct, and states that the district 

court abused its discretion in balancing the equities and granting the injunction. 

Anticipation 

"Anticipation" in patent usage means that the claimed invention was previously 

known and described in a printed publication, explicitly or inherently. Anticipation is 

established by documentary evidence, and requires that every claim element and limitation 

is set forth in a single prior art reference, in the same form and order as in the claim. See

In re Omeprazole Patent Litigation, 483 F.3d 1367, 1373 (Fed. Cir. 2007); Continental Can 

Co. v. Monsanto Co., 948 F.2d 1264, 1267 (Fed. Cir. 1991). An anticipating reference 

must enable that which it is asserted to anticipate. Omeprazole, 483 F.3d at 1378 (“To 

‘anticipate,’ the identical subject matter must not only be previously known, but the 

knowledge must be sufficiently enabling to place the information in the possession of the 

public.”); Elan Pharmaceuticals, Inc. v. Mayo Found. for Medical Educ. & Research, 346 

F.3d 1051, 1054 (Fed. Cir. 2003) (same).

Sandoz argued that the '718 patent is anticipated by European Patent Publication 

No. 0,280,571 B1 (the '571 Publication), which describes "a sustained release matrix 

formulation in tablet form comprising from 0.1% by weight to 90% by weight of an 

antimicrobial agent selected from . . . erythromycin . . . from 5% by weight to 29% by weight 
2007-1300 6

of a hydrophilic polymer, and from 0.5% by weight to 25% by weight of an acrylic polymer . 

. . ." The '571 Publication states that hydrophilic polymers such as hydroxypropylmethyl 

cellulose (HPMC) can be used to form a hydrophilic matrix which "respond[s] to increases 

in pH with a corresponding increase in the permeability of the dosage form." Sandoz 

argued in the district court that although the '571 Publication does not mention 

clarithromycin or the specific pharmacokinetic limitations in the '718 patent claims, the '571 

Publication anticipates the '718 claims because clarithromycin is an erythromycin derivative 

and the claimed pharmacokinetic limitations are inherent in the extended release 

compositions of the '571 Publication. Sandoz also argued that enablement of the 

compositions in the ‘571 Publication must be presumed, because the compositions in the 

'718 patent are presumed to be enabled and, according to Sandoz, are identical. 

Abbott responded that the '571 Publication cannot “anticipate” because it does not 

show the elements of the claims of issue; it does not mention clarithromycin, it does not 

disclose the pharmacokinetic criteria stated in the '718 claims, and it does not enable these 

limitations, either expressly or inherently. Abbott argued that significant experimentation 

would be required to ascertain the applicability of any release agent from the large number 

of release agents mentioned in the '571 Publication, particularly as applied to a different 

biological product having different dissolution and metabolic characteristics. Thus Abbott 

argued that the legal criteria of "anticipation" are not met by the '571 Publication. 

The district court found that Sandoz did not present evidence sufficient to support its 

argument that "the '571 Publication's teachings would enable Abbott to create an extended 

release of an erythromycin derivative drug simply based on the structural limitations." 

Abbott, 500 F. Supp.2d at 840. The district court observed that the '571 Publication "does 
2007-1300 7

not offer any in vivo dissolution data" nor state "the pharmacokinetic profile of its own 

formulations." Id. The court concluded that Sandoz would not be likely to succeed in 

establishing anticipation by this reference. We discern no clear error in this conclusion, for 

the '571 Publication neither describes the product of the ‘718 claims nor enables the 

pharmacokinetic properties that are set forth in the '718 claims. See Elan Pharmaceuticals, 

346 F.3d at 1057 (an anticipating reference must disclose every element of the claims, and 

place a person of ordinary skill in possession of the claimed invention). 

Obviousness

Sandoz also argued that the claims of the '781 and '616 patents are invalid on the 

ground of obviousness, in view of the combination of the '571 Publication with PCT 

Application WO 95/30422 (the PCT or '422 Application) and United States Patent No. 

5,705,190 (the '190 patent). 

In determining, for preliminary injunction purposes, the likelihood that patent 

invalidity would be established at trial, the district court evaluates the factual and legal 

arguments in light of the presumptions and burdens that will inhere at trial, viz., that "[a] 

patent shall be presumed valid. . . . The burden of establishing invalidity of a patent or any 

claim thereof shall rest on the party asserting such invalidity." 35 U.S.C. '282. This burden 

"exists at every stage of the litigation." Canon Computer Systems, Inc. v. Nu-Kote Int'l, 

Inc., 134 F.3d 1085, 1088 (Fed. Cir. 1998); see Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d 

1368, 1374 (Fed. Cir. 2006) (taking into account the applicable presumptions and burdens 

in reviewing the grant of a preliminary injunction). Sandoz on this appeal relies on the 

Supreme Court's decision in KSR International Co. v. Teleflex, Inc., ___ U.S. ___, 127 S. 
2007-1300 8

Ct. 1727 (2007), Sandoz arguing that the law of obviousness has been significantly 

changed, and that the district court did not give adequate recognition to the changed law. 

The district court had issued its initial decision granting the preliminary injunction shortly 

before the Court’s decision in KSR. The court then requested supplemental briefing and 

argument, and issued a further opinion discussing the issues in light of KSR and continuing 

to conclude that Abbott was likely to prevail on the merits of the question of obviousness. 

In its initial decision the district court discussed the references in detail. The court 

explained that the PCT Application, entitled "Controlled-Release Dosage Forms of 

Azithromycin," describes “[a] dosage form for oral administration comprising azithromycin 

and a pharmaceutically acceptable carrier, which releases not more than about 10% of its 

incorporated azithromycin into a mammal's stomach, and which releases not more than an 

additional 10% during the first 15 minutes after entering said mammal's duodenum," and 

exhibits decreased gastrointestinal side effects. The district court explained that the PCT 

Application shows hydroxypropylmethylcellulose (HPMC) and other polymers as “a 

hydrophilic polymer sufficient to provide a useful degree of control over the azithromycin 

dissolution," and contains in vitro data showing the amount and timing of dissolution of 

azithromycin in various conditions and sustained dosage forms. 

Sandoz argued that these teachings should be combined with those of the ‘571 

Publication and the '190 patent entitled "Controlled Release Formulation for Poorly Soluble 

Basic Drugs," which describes a "controlled release solid pharmaceutical composition 

adapted for oral administration comprising: a therapeutically effective amount of at least 

one basic drug having a water solubility of less than 1 part per 30 parts water . . . wherein 

the basic drug is a macrolide" and as the release agent a water-soluble alginate salt. The 
2007-1300 9

‘190 patent names the macrolides erythromycin, clarithromycin, dirithromycin, azithromycin, 

roxithromycin, and ABT-229 for use with the alginate salt release agent. Sandoz argued 

that the subject matter of the ‘718 patent would have been obvious in view of the '571 

Publication showing extended release formulations of erythromycin derivatives, in 

combination with the controlled release formulations and pharmacokinetic properties of 

azithromycin in the PCT Application, and the modified release alginate salt formulation of 

clarithromycin in the '190 patent. Sandoz argued that a person of ordinary skill in this field 

would have desired to improve the administration of clarithromycin by finding an extended 

release formulation having optimum release and biological properties, and would have 

selected and tested the HPMC from the '571 Publication, in view of the formulation of 

azithromycin with HPMC in the PCT Application and the '190 patent’s use of an alginate 

salt to modify the release of clarithromycin. Sandoz stressed that the PCT Application 

states the known principle of using controlled release formulations to reduce the dosing 

frequency for short half-life compounds. Sandoz argued that no more than routine 

experimentation was needed to find a controlled release formulation that would meet the 

pharmacokinetic requirements stated in the '718 claims. 

Sandoz applied similar arguments to the claims of the '616 patent, stating that the 

PCT Application teaches that control of azithromycin release reduces gastrointestinal side 

effects, and that the '190 patent shows the interchangeability of azithromycin and 

clarithromycin in the formulation using an alginate salt. Sandoz argued that this 

combination of references renders obvious a clarithromycin formulation with reduced 

gastrointestinal side effects as claimed in the ’616 patent. In its supplemental argument 

based on KSR, Sandoz argued that Abbott merely “pursue[d] known options” for both the 
2007-1300 10

‘718 and ‘616 patents, based on the Court’s exposition 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.” KSR, 127 S. Ct. at 1742. 

In the district court Abbott disputed the premises presented by Sandoz, challenged 

the analysis of the content and significance of the references, and argued that KSR did not 

hold, as Sandoz proposed, that the recognition of a problem of itself renders the solution 

obvious. Abbott argued that more is needed than recognizing the problem, as this court 

discussed in Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., 381 F.3d 1371, 1377 

(Fed. Cir. 2004) (“Recognition of a need does not render obvious the achievement that 

meets that need. . . . Recognition of an unsolved problem does not render the solution 

obvious.”) Abbott pointed out that the Court qualified its discussion by explaining that the 

“problem” should have “a finite number of identified, predictable solutions,” KSR, 127 S. Ct. 

at 1742, to expose its eventual solution to unpatentability as “obvious to try.” Id. Abbott 

stressed the difference between new biological compositions whose performance and 

effectiveness in combination cannot be confidently predicted but must be made and 

evaluated, and new mechanical combinations of known elements each of which predictably 

performs its known function in the combination. 

Abbott stressed that its choice of extended release components is not shown or 

suggested by the prior art to produce the pharmacokinetic properties of Abbott’s claims. 

The Court recognized in Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809 (1986) that the 

district court is not to rely on hindsight, and that “in addressing the question of obviousness 

a judge must not pick and choose isolated elements from the prior art and combine them so 
2007-1300 11

as to yield the invention in question if such a combination would not have been obvious at 

the time of the invention.” 475 U.S. at 810. In Graham v. John Deere Co., 383 U.S. 1 

(1966) the Court recognized that the obviousness inquiry must “guard against slipping into 

use of hindsight and to resist the temptation to read into the prior art the teachings of the 

invention in issue.” Id. at 36. 

Abbott agreed that the basic principles of pharmacokinetics were known, but argued 

that the limitations in the '718 claims, whereby the bioavailability of the product was 

characterized, were not shown as achieved in any reference or any combination of 

references. Abbott pointed out that the PCT Application is directed specifically to 

azithromycin and shows “scores” of possible formulations, all using in vitro data, and does 

not contemplate metabolite activity in vivo as is manifested for chlorithromycin. Abbott 

stated that “the ‘422 publication discloses more than a dozen possible classes of delivery 

devices,” Abbott Brief at 42, that “the ’422 publication merely provides in vitro dissolution 

data for a subset of its disclosed compositions,” and that the formulation in the PCT 

Application “did not even have equivalent bioavailability as IR [immediate release] 

azithromycin.” Id. at 41. 

Abbott described in the ‘718 and ‘616 specifications that the '190 patent reference 

presents "Cmax values [that] are not statistically significantly different from those of the IR 

formulation." '718 patent, col. 2, lines 11-12; ‘616 patent, col. 2, lines 13-14 (referring to

Ser. No. 08/574,877, the '190 patent). Abbott stated that Sandoz concedes that the '190 

patent does not describe pharmacokinetic limitations based on clarithromycin plasma 

concentrations, and that neither the PCT Application nor the '190 patent discloses the 

pharmacokinetic limitations and properties set forth in the '718 and ‘616 claims, and that 
neither the PCT Application nor any other reference provides guidance as to which 

formulation would provide the pharmacokinetic characteristics required by the ‘718 claims. 

Thus Abbott argued in the district court that a skilled artisan would not have known 

the effect of substituting clarithromycin for azithromycin in any specific formulation that 

might be selected from the PCT Application, for it is undisputed that there are significant 

differences among erythromycin derivatives. Abbott presented evidence to the district court 

that azithromycin and clarithromycin exhibit different properties in four biological processes 

of relevance to oral drug administration: absorption, distribution, metabolism, and excretion. 

 These differences were tabulated by Abbott’s expert, Professor Stanley S. Davis, as 

follows: 

Azithromycin Clarithromycin 

Absolute Bioavailability About 34% from 600 mg dose About 50% from 250 mg 

dose 

Pharmacokinetics Linear Non-linear 

Active Metabolite None reported in the 

Physicians Desk Reference 

14-hydroxy clarithromycin 

Metabolism Metabolites possess little or no 

activity 

Extensively metabolized to 

an active metabolite 

Elimination Half Life About 70 hours 3-4 hours for 250 mg IR dose 

(14-OH metabolite, 5-6 

hours) 

First Pass Effect Not significant Extensive 

Volume of Distribution Large-2200 litre 250 litre 

2007-1300 12
2007-1300 13

Supplemental Declaration of Dr. Davis, February 7, 2007. The parties do not dispute that 

the PCT Application describes only in vitro data, and that in vitro data are not predictably 

transferable to in vivo conditions. Dr. Davis testified that "it simply isn't the case that in vitro

controlled release data will automatically correlate with the pharmacokinetic parameters in 

vivo, and in fact, for many of the formulations of the ‘422 application, they affirmatively do 

not so correlate." Id.

The district court concluded that a person of ordinary skill in this field would not have 

predicted which formulation, that might be selected from the prior art, would provide the 

required pharmacokinetics. The district court referred to the dissimilarities in the 

pharmacokinetic properties for azithromycin as shown in the PCT Application, considered 

the content of the '190 patent, and concluded that the bioavailability of the formulations 

claimed in the '718 patent were not predictable from these references. The court referred 

to the testimony of another Abbott expert, Dr. Daniel Weiner, that "the '190 patent does not 

disclose any clarithromycin-specific PK [pharmacokinetic] data" or "any DFL [degree of 

fluctuation]2

 values at all.” Declaration of Daniel Weiner, Ph.D., January 9, 2007. Dr. 

Weiner explained that the pK values reported in the '190 patent are based on total antibiotic 

activity, which consists of the combined concentrations of clarithromycin and its active 

metabolite, while the pharmacokinetic elements of the '718 patent relate specifically to 

clarithromycin plasma concentrations. Dr. Weiner concluded, and the district court agreed, 

that a skilled artisan would not have had a reasonable expectation of producing effective 

 2 The variation between maximum and minimum concentration is measured 

by the degree of fluctuation, called "DFL", calculated as (Cmax – Cmin)/Cavg , with Cavg the 

average concentration over a dosing interval. Appx. 463 &28.
2007-1300 14

compositions based on the mention of clarithromycin along with azithromycin in the '190 

patent, because of their different mechanisms of antibiotic activity and the effect of this 

activity on pharmacokinetic behavior. 

The district court observed that the in vivo azithromycin controlled release 

formulations in the PCT Application have less total bioavailability than their immediate 

release counterparts, supporting Abbott’s argument that the behavior of differing biological 

systems, even when structurally similar, is not predictable. See Alza Corp. v. Mylan 

Laboratories, 464 F.3d 1286, 1297 (Fed. Cir. 2006) ("Alza's evidence of in vitro dissolution 

rates is irrelevant absent evidence demonstrating that the in vitro system is a good model 

of actual in vivo behavior."). The district court concluded that the in vivo extended release 

properties claimed in the '718 patent are sufficiently dissimilar to or unpredictable from the 

in vitro controlled release data for azithromycin in the PCT Application that a person of 

ordinary skill in the field of the invention would not have had the degree of confidence of 

success in transferring the PCT Application's azithromycin formulation to the different 

metabolic and solubility systems of clarithromycin as would render the '718 claimed 

invention unpatentable on the ground of obviousness. 

In reaching these conclusions, the district court relied on the Federal Circuit’s 

decision on the same patents in Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 473 

F.3d 1196 (Fed. Cir. 2007) (herein "Andrx"). This court, sustaining the district court’s grant 

of a preliminary injunction, had concluded that obviousness was not likely to be established, 

reversing this court’s prior ruling reversing the grant of a preliminary injunction in Abbott 

Laboratories v. Andrx Pharmaceuticals, Inc., 452 F.3d 1331 (Fed. Cir. 2006) (herein 
2007-1300 15

"Teva"). Sandoz argued to the district court that the Federal Circuit's ruling in Andrx is 

incorrect, and on this appeal Sandoz urges us to reject Andrx and reinstate Teva. 

In Teva a panel of this court held that the claims of the ‘718 patent were likely to be 

held not infringed. This court also stated that there was a substantial likelihood that claim 4 

of the '718 patent would be held invalid for obviousness based on the PCT Application 

together with the '190 patent. This court held that the preliminary injunction should be 

denied, although the panel cautioned that its ruling "in no way resolves the ultimate 

question of invalidity." Teva, 452 F.3d at 1347. In Andrx a later panel of this court, on an 

enlarged record, rejected the invalidity ruling in Teva and held that the '718 claims were 

likely to withstand the attack on validity. Andrx, 473 F.3d at 1203-07. 

Reviewing this history as applied to Sandoz’ arguments herein, the district court 

explained that this court in Teva had not been made aware of the differences between the 

pharmacokinetic criteria described in the '190 patent and those of the '718 patent. The 

district court explained that the pharmacokinetic data in the '190 patent were based on 

measurements of total antibiotic activity in the body, which includes both clarithromycin and 

its active metabolite formed after ingestion, whereas the data in the '718 patent are specific 

to clarithromycin alone. The court found that “Abbott has shown . . . that the PK profile of 

the clarithromycin-metabolite data of the ‘190 patent formulation was not the same as the 

PK profile of the clarithromycin-only data utilized by the ‘718 patent,” Abbott, 500 F. 

Supp.2d at 841. 

Sandoz argued, in its supplemental briefing in the district court after the KSR

decision, that this court's decision in Andrx does not survive scrutiny under the principles 

set forth in KSR, and stressed that application of KSR renders it "obvious to try" the various 
2007-1300 16

release agents in the PCT Application, such that any successful composition would be 

unpatentable, whether or not the results were predictable. Sandoz argued that the '190 

patent shows that clarithromycin and azithromycin have similarities as well as differences, 

and that it would be obvious to experiment to determine which formulations were effective 

in view of these differences and similarities. Sandoz stressed that the Abbott scientists had 

knowledge of the prior art including the PCT Application, and that they developed the 

Abbott formulation in only one month of research effort. Sandoz quoted the Court's 

admonition in KSR that a court "can take account of the inferences and creative steps that 

a person of ordinary skill in the art would employ," 127 S. Ct. at 1741, and that "[t]he 

combination of familiar elements according to known methods is likely to be obvious when it 

does no more than yield predictable results." Id. at 1739. 

The district court, applying KSR, reconsidered its prior determination and framed the 

question as "whether an ordinary person skilled in the art would have seen a benefit to 

combining an erythromycin derivative with a polymer with the same PK [pharmacokinetic] 

limitations as embodied in claims 1 and 4 of the '718 patent given the state of the 

pharmaceutical industry at the time." Abbott, 500 F. Supp.2d at 851. The court concluded: 

"Based upon what evidence and argument Sandoz offered, the answer was and remains 

no." Id. The district court explained that “this Court’s preliminary factual findings . . . found 

that Sandoz had not produced evidence indicating that the PK limitations were disclosed in 

the prior art or were inherent to the structural limitations of the prior art compositions.” Id.

at 852. The district court observed that "[t]he KSR opinion only focused on the Federal 

Circuit's strict use of the TSM [teaching, suggestion, motivation] test in performing the 

obviousness analysis; it did not mention or affect the requirement that each and every claim 
2007-1300 17

limitation be found present in the combination of the prior art references before the analysis 

proceeds." Id. at 852. 

We 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." 127 S. Ct. at 1740. The Court explained the conditions in which 

"obvious to try" may negate patentability, depending on the relation of the prior art teaching 

to the later-developed technology. 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. Then, 

“if this leads to the anticipated success, it is likely the product not of innovation but of 

ordinary skill and common sense.” 127 S. Ct. at 1742. 

Abbott argued that the "known options" in the prior art were not "finite, identified, and 

predictable," the words of KSR, and are identified only with hindsight knowledge of Abbott’s 

new formulation and its pharmacokinetic properties. Abbott pointed to the discussion in the 

PCT Application of over a dozen possible drug delivery modes, including matrix systems, 

membrane-moderated or reservoir systems, osmotic pumps, coated hydrogel tablets and 

multiparticulates, sustained release compositions with delayed-release layers, pHdependent coated tablets, bursting osmotic core devices, bursting coated swelling core 

devices, pH-triggered bursting osmotic core devices, pH-triggered bursting coated swelling 

core devices, enzyme-triggered supported liquid membrane devices, bacterially degradable 
2007-1300 18

coating devices, and swelling plug devices, all classes of controlled release for drug 

delivery systems, each containing sub-classes and variations. PCT App. at 8-38. The 

expert witnesses pointed out the difficulties in predicting the behavior of any composition in 

any specific biological system. 

The evaluation of the choices made by a skilled scientist, when such choices lead to 

the desired result, is a challenge to judicial understanding of how technical advance is 

achieved in the particular field of science or technology. Such understanding is critical to 

judicial implementation of the national policy embodied in the patent statute. In Publication 

of Tomlinson, 363 F.2d 928 (CCPA 1966) our predecessor court discussed the role of 

"obvious to try" in scientific and technologic research and in patentability: 

Slight reflection suggests, we think, that there is usually an element of 

"obviousness to try" in any research endeavor, that is not undertaken with 

complete blindness but rather with some semblance of a chance of success, 

and that patentability determinations based on that as the test would not only 

be contrary to statute but result in a marked deterioration of the entire patent 

system as an incentive to invest in those efforts and attempts which go by the 

name of "research." 

Id. at 931. The 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 methodology of science and the 

advance of technology are founded on the investigator’s educated application of what is 

known, to intelligent exploration of what is not known. 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. 
2007-1300 19

The district court discussed the differences between the pharmacokinetic properties 

shown in the '190 patent reference and the properties in the '718 patent claims, the 

differences in the chemical and biological properties of azithromycin and clarithromycin, the 

differences between in vitro and in vivo data, and the differences between azithromycin and 

clarithromycin. For example, Abbott’s expert Dr. Davis stated that “the absorption of 

clarithromycin is affected by a phenomenon know as the ‘first pass effect’ which does not 

occur for azithromycin,” and that azithromycin’s “metabolism occurs only post-absorption.” 

Dr. Davis also stated that “the half-life for azithromycin is about 70 hours, whereas that for 

clarithromycin is about 3-4 hours at low IR doses.” First-pass metabolism was explained as 

meaning that a significant amount of the drug is metabolized and converted into another 

compound before it enters the circulation; Dr. Davis stated that a person of skill in this field, 

having this knowledge, would not have assumed that the two drugs would exhibit similar 

behavior if placed in the same formulation. The district court concluded that it was not 

predictable, from the in vitro behavior of azithromycin, how any specific clarithromycin 

extended release formulation would perform in vivo. 

Sandoz presented other arguments, for example, that the FDA regulations state the 

requirements for approval of extended release formulations, thereby rendering obvious a 

formulation that meets these requirements. However, knowledge of the goal does not 

render its achievement obvious. The district court appropriately applied the KSR standard 

of whether the patents in suit represented an "identified, predictable solution" and 

"anticipated success," the words of KSR, to the problem of producing extended release 

formulations having the pharmacokinetic properties in the claims. 

On the record of the preliminary injunction proceedings, and considering this court's 
2007-1300 20

ruling in Andrx and the guidance of the Court in KSR, we do not discern reversible error in 

the district court's ruling that Abbott is likely to prevail on the issues of patent validity based 

on anticipation and obviousness. 

II 

INEQUITABLE CONDUCT 

Sandoz also argued that the '718 and '616 patents are unenforceable due to 

Abbott’s “inequitable conduct” in the Patent and Trademark Office. Sandoz stated that 

Abbott submitted a false declaration to the PTO, and also that Abbott withheld from the 

examiner the results of certain tests after the patent applications were filed and that were 

inconsistent with information in the patent applications. The district court found that there 

was no intent to deceive the examiner, and that the criticized activity did not constitute 

inequitable conduct. 

The evidentiary standard for determining whether there was inequitable conduct in 

obtaining a patent that is otherwise valid was set forth by this court, sitting en banc for the 

purpose, in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 

1988). The court explained that "[t]o be guilty of inequitable conduct, one must have 

intended to act inequitably," and held: "Inequitable conduct resides in failure to disclose 

material information, or submission of false material information, with an intent to deceive, 

and those two elements, materiality and intent, must be proven by clear and convincing 

evidence." Id. at 872. Mistake or negligence, even gross negligence, does not support a 

ruling of inequitable conduct. The court held: 

We adopt the view that a finding that particular conduct amounts to “gross 

negligence” does not of itself justify an inference of intent to deceive; the 

involved conduct, viewed in light of all the evidence, including evidence 
2007-1300 21

indicative of good faith, must indicate sufficient culpability to require a finding 

of intent to deceive. 

Id. at 876. When both materiality and deceptive intent have been established the district 

court determines, in the court’s discretion, whether inequitable conduct has occurred; 

appellate review is on this basis. See id. at 876 (“As an equitable issue, inequitable 

conduct is committed to the discretion of the trial court and is reviewed by this court under 

an abuse of discretion standard. We, accordingly, will not simply substitute our judgment 

for that of the trial court in relation to inequitable conduct.”). 

The ‘718 patent 

Sandoz first challenges the district court’s findings with respect to a declaration by 

an inventor, Dr. Linda Gustavson, comparing the products of the pending '718 application 

with the products in a prior art Abbott patent, U.S. Patent No. 4,808,411, directed to a 

pediatric clarithromycin suspension that is administered twice daily. Dr. Gustavson 

submitted data to the PTO comparing the ‘718 and the ‘411 formulations, and stated that 

“the ER [extended release] formulation as claimed, is supported by the above results, 

namely, Cmax of clarithromycin in plasma is statistically significantly lower than that for IR 

[immediate release] formulation given twice daily.” The declaration also stated that “AUC is 

maintained over 24 hours; and Cmin is substantially equivalent to that of the IR 

suspension”.3

 However, in this litigation Dr. Gustavson testified that she had not analyzed 

statistical significance, and that "it could not definitively be concluded from the data that the 

difference between the ER Cmax and the Cmax for a twice-a-day dosed suspension would 
2007-1300 22

have been statistically significantly different." Based on this admission, Sandoz argued that 

the Gustavson submission to the PTO was a material misrepresentation, that intent to 

deceive is presumed, and that inequitable conduct was thereby established.

Abbott did not dispute that Dr. Gustavson did not analyze statistical significance, but 

argued that it was not material to patentability and that a reasonable examiner would not 

have found otherwise. Abbott pointed out that the actual data were before the PTO, and 

that the results did show a numerically lower Cmax value. Sandoz pointed out to the district 

court that Abbott’s patent attorney argued nonobviousness to the PTO based on the 

Gustavson declaration, and Abbott responded that the declaration correctly stated that the 

pharmacokinetic properties of the product in the '411 patent are markedly different from 

those of the product of the '718 patent. We have been directed to no evidence of deceptive 

intent, or “bad faith or intentional misconduct”, in the words of PTO Rule 56; on this appeal 

Sandoz repeats that deceptive intent should be inferred from the misstatement. 

The district court cited Impax Labs., Inc. v. Aventis Pharm., Inc., 468 F.3d 1366, 

1374 (Fed. Cir. 2006) for its summary that a ruling of inequitable conduct requires clear and 

convincing evidence that the applicant while prosecuting the patent “(1) made an affirmative 

misrepresentation of material fact, failed to disclose material information, or submitted false 

material information, and (2) intended to deceive the [PTO].” In determining materiality, the 

district court applied the standard that “[u]ndisclosed information is material if it satisfies 37 

C.F.R. '1.56 and if there is a substantial likelihood that a reasonable examiner would have 

 3 The AUC is a calculation of the “area under a curve” when drug concentration 

is plotted over time, and is a measure of bioavailability of the drug. Cmin is the minimum rug 

concentration over a dosing interval.
2007-1300 23

considered the undisclosed information important in deciding whether to allow the patent to 

issue.” Although the Federal Circuit has not always been consistent in defining “materiality” 

in accordance with the PTO Rules, the principles are consistently directed to deceptive 

actions by patent applicants. In Digital Control, Inc. v. Charles Machine Works, 437 F.3d 

1309 (Fed. Cir. 2006) the court observed that four separate tests have been applied for 

materiality. 

The district court, applying the tests of materiality to the Gustavson statement about 

statistical significance, stated that it was "obviously troublesome that Gustavson made her 

assertion without having actually performed the statistical test." The district court 

concluded that the Gustavson statement was not material to patentability, "despite the fact 

that it satisfies the definition of 'material' provided by 37 C.F.R. '1.56(b)." The court stated 

that: 

Since 1) no claim of the '718 patent requires the extended release 

formulation to have a statistically significant lower Cmax than the immediate 

release formulation; 2) the data in fact shows the Cmax of the extended 

release formulation to be lower (albeit not statistically significantly lower) than 

the Cmax of the immediate release formulation; and 3) the extended release 

formulation was in fact pharmacokinetically different from the immediate 

release suspension formulation, it is more likely than not that the PTO would 

not have found the “statistically significantly lower” statement to be important. 

500 F.Supp.2d at 822. Relevant is the ruling in Regents of the Univ. of Cal. v. Eli Lilly & 

Co., 119 F.3d 1559, 1570 (Fed. Cir. 1997) (that “Information is material if a reasonable 

examiner would have considered it important to the patentability of a claim”). 

The district court also found that there was no evidence of intent to deceive the 

examiner. The court rejected Sandoz's argument that deceptive intent is inferred from 

materiality alone, for precedent requires independent proof of deceptive intent. See
2007-1300 24

Kingsdown, 863 F.2d at 872 (intent to deceive the examiner into granting the patent is a 

separate and essential element of inequitable conduct in the PTO); Baker Oil Tools, Inc. v. 

Geo Vann, Inc., 828 F.2d 1558, 1565 (Fed. Cir. 1987) ("The material facts upon which a 

holding of inequitable conduct rests relate to both the intent of the actor and the materiality 

of the information."). Weighing the materiality of the statement and the absence of 

evidence of intent to deceive, we do not discern an abuse of discretion in the district court's 

conclusion that inequitable conduct was not established by the statement concerning 

statistical significance. 

Sandoz next challenged the fact that Abbott did not provide to the patent examiner 

the results of some clinical tests conducted after the '718 patent application was filed, that 

were reported to the FDA and included on the Biaxin® XL product label. The test results 

relate to taste perversion4

 results in a later clinical trial, and a study comparing 

clarithromycin with azithromycin. Sandoz stated that Abbott should have provided the 

patent examiners with these results and the product label, which report tests wherein the 

immediate release formulation has a lower incidence of taste perversion than the extended 

release formulation, contrary to the information in the '718 patent. Sandoz argued that the 

inventors knew or should have known of this discrepancy, and thus that intent to deceive is 

established. Abbott responded that the challenged taste tests were from dosages that 

were not directly comparable, and that they did not change the correctness of the data in 

the patent application. Abbott presented the expert testimony of Dr. Davis that "the 

 4

 "Taste perversion" is defined in the '718 patent as "the perception of a bitter 

metallic taste normally associated with erythromycin derivatives, particularly, with 

clarithromycin." Col 3, lines 53-55. 
2007-1300 25

comparison between the taste perversion incidence rate for Biaxin7 IR and Biaxin7 XL in 

the label does not relate to the invention disclosed and claimed in the '407 patent, which is 

for a reduction in taste perversion for the same total dose.” Supplemental Declaration of 

Professor Stanley S. Davis, February 7, 2007(emphases in original). 

The district court concluded that the taste results met the materiality criteria of Rule 

56 but that a reasonable examiner would not consider the information important in deciding 

whether to grant the patent. The court explained that a reasonable examiner would 

compare data at comparable dosages, and that the data were not comparable. Although 

Abbott and Sandoz argued about whether the inventors knew or should have known of this 

discrepancy between this taste data from the Phase III clinical trial, and the taste data in 

the patent application, the district court observed that there was no evidence of deliberate 

withholding of this information in order to deceive the patent examiner. "Intent to deceive 

can not be inferred solely from the fact that information was not disclosed; there must be a 

factual basis for a finding of deceptive intent." Hebert v. Lisle Corp., 99 F.3d 1109, 1115, 

1116 (Fed. Cir. 1996) ("To establish inequitable conduct the information that is known to 

the applicant and not provided to the PTO must be both material to patentability, and 

withheld in order to deceive or mislead the examiner."); Molins PLC v. Textron, Inc., 48 

F.3d 1172, 1181 (Fed. Cir. 1995) ("While intent to deceive the PTO may be found as a 

matter of inference from circumstantial evidence, circumstantial evidence cannot indicate 

merely gross negligence."). 

Materiality is not evidence of intent, which must be established as a separate factual 

element of a discretionary ruling of inequitable conduct. The district court finding that the 
2007-1300 26

factual premises of both materiality and intent to deceive were not established in 

connection with the taste data, did not abuse its discretion in declining to find inequitable 

conduct on this ground. 

Finally, Sandoz criticized Abbott's failure to provide the PTO with a study designated 

W98-268, done after the patent application was filed, which compared the pharmacokinetic 

values of clarithromycin upon administration under various conditions. The district court 

described the issue as: “Abbott claimed that the mean DFL values for a modified release 

version of clarithromycin claimed by a prior patent, the ‘190 patent, were substantially equal 

to the mean DFL values for the immediate release version of clarithromycin” but “[t]he final 

report of Study W98-268 states that the modified release formulation exhibited a statistically 

significantly lower mean DFL than that for the immediate release formulation.” 500 F. 

Supp.2d at 823. Sandoz stated that Abbott committed inequitable conduct by failing to 

disclose these results to the PTO. 

Dr. Weiner stated in his January 9 Declaration that “the ‘190 patent does not 

disclose any clarithromycin-specific PK data,” and “the ‘190 patent does not disclose any 

DFL values at all,” and explained that ”subsequent studies conducted by Abbott indicate 

that the commercial embodiment of the invention of the ‘190 patent does not have a 

statistically significantly lower DFL than the IR formulation. . . . Before the present litigation, 

Abbott had conducted five crossover studies in which the pharmacokinetic parameters for 

clarithromycin (i.e., clarithromycin specifically, not clarithromycin combined with its 

metabolite) were measured for both the MR [modified release] and IR formulations: W95-

914, W95-195, W95-197, W98-268 [the study that Sandoz accuses Abbott of withholding], 

and TAI-99-001.” The mean DFL values in Table VII in the ‘718 patent are 
2007-1300 27

based on Study W95-195. See Supplemental Declaration of Dr. Ronald Sawchuk, 

February 7, 2007 (“Table VII reflects data from a multiple dose study involving MR 

formulation and an IR formulation that was conducted in Germany in 1995. See Ex. 12, 

Study W95-195.”). The studies conducted before the '718 patent application was filed 

showed the data reported in the specification. 

Many details were explained to the district court, as to all the studies, their context, 

and their relationship. The district court found that "contrary to Sandoz's assertion, Study 

W98-268 does not demonstrate that the prior art MR formulation has the same PK 

properties as that claimed for the ER formulation. Therefore, Study W98-268 is not 

material to the patentability of the '718 patent." Abbott, 500 F. Supp.2d at 824. The district 

court found that the '718 patent "speaks of the PK relationship of extended release and 

immediate release formulations, not of modified release and immediate release 

formulations. . . . [and] there is no evidence showing the DFL of the ER formulation to be 

anything but consistently statistically significantly lower than the DFL of the IR formulation." 

Id. The district court found that the W98-268 study was not material under either Rule 56 

or the reasonable examiner standard. Clear error has not been shown in this finding. 

On the preliminary injunction record, the district court did not abuse its discretion in 

ruling that Sandoz was not likely to succeed in establishing inequitable conduct in Abbott’s 

prosecution of the '718 patent application. We agree with the district court that the scales 

do not "tilt towards finding inequitable conduct." Id. at 829. 

The ‘616 patent 
2007-1300 28

Sandoz argued that inequitable conduct as to the taste perversion claim in the ‘718 

patent taints the ‘616 patent because a taste perversion claim was included in the '616 

application when it was filed, although that claim was cancelled before any PTO 

examination on the merits. The district court declined to hold the '616 patent unenforceable 

based on a withdrawn claim, citing 37 C.F.R. §1.56(a): 

Rule 56(a). The duty to disclose information exists with respect to each 

pending claim until the claim is cancelled or withdrawn from consideration, or 

the application becomes abandoned. Information material to the patentability 

of a claim that is cancelled or withdrawn from consideration need not be 

submitted if the information is not material to the patentability of any claim 

remaining under consideration in the application. 

The district court deemed it "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." Abbott, 500 F. Supp.2d at 829. This court held in Scripps Clinic & Research 

Found. v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991) that "[a] reference that is 

material only to withdrawn claims can not be the basis of a holding of inequitable conduct." 

Rule 56 is in accord. 

Sandoz also argued as to the '616 patent that Abbott did not report to the PTO the 

results of clinical trials conducted before the continuation in-part ‘616 application was filed. 

Sandoz’ expert Dr. Marcello Pagano, in his Declaration dated January 25, 2007, stated: “I 

have reviewed the bronchitis and sinusitis studies [and] the claims of the ‘616 patent for a 

method of reducing gastrointestinal adverse side effects are not supported by the data from 

those two clinical studies.” The results of these studies were provided to the FDA, but not 

to the PTO. Dr. Pagano stated: “Since neither the sinusitis nor the bronchitis studies 

produced favorable results to support a claimed reduction in gastrointestinal adverse side 
2007-1300 29

effects, Abbott had to manipulate its data and report the number of discontinuations due to 

gastrointestinal adverse side effects to the PTO . . .” The district court found that the 

information from these clinical trials was not material to patentability, stating that: "it is clear 

from both Table VI and Table VIII [of the '616 patent] that some data demonstrating no 

change in the subcategories of GI adverse side effects of abdominal pain, constipation, 

diarrhea, dyspepsia, flatulence and nausea were in fact disclosed to the PTO." Abbott, 500 

F. Supp.2d at 828. These findings have not been shown to be clearly erroneous. 

There was no evidence of intent to deceive with respect to the results of these 

clinical trials. Materiality, even if found, does not establish intent. This is not a case of new 

information that affects the fundamental invention; this is a case of challenging every action 

or inaction of the “conduct” of patent solicitation, although patentability is unaffected. The 

purpose of Kingsdown was to bring patent practice into the mainstream of the law and 

administrative practice. The law severely punishes fraudulent practices, and the patent 

practice includes recognition that the inventor usually knows more about the field than does 

the “expert” patent examiner. However, routine actions that do not affect patentability and 

that are devoid of fraudulent intent are not subject to a different standard than other 

inquiries into fraudulent procurement. The Administrative Procedure Act governs patent 

examination, see Dickinson v. Zurko, 527 US 150 (1999), and actions of patent examiners 

are reviewed with recognition of examiner expertise so well as recognition of the 

occasionally imperfect examination process. “It was to mitigate the ‘plague’ whereby every 

patentee’s imperfections were promoted to ‘inequitable conduct’ that this court reaffirmed 

that both materiality and culpable intent must be established.” Allied Colloids, Inc. v. 

American Cyanamid Co., 64 F.3d 1570, 1578 (Fed. Cir. 1995). 
2007-1300 30

We conclude that the district court did not abuse its discretion in holding that the '718 

and '616 patents were not likely to be held unenforceable based on inequitable conduct in 

obtaining the patents. 

III 

INFRINGEMENT 

The first step in most infringement suits is the procedure called ‘claim construction,” 

where the scope of the claim is defined by the court. At the preliminary injunction stage the 

district court’s claim construction is reviewed, as for other legal issues, for the likelihood of 

correctness of the ruling. This likelihood is based on the underlying facts as found at this 

stage of the proceedings, recognizing that "the burdens at the preliminary injunction stage 

track the burdens at trial." Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 

546 U.S. 418, 429 (2006). 

For the patents here in suit, the issue of infringement was resolved, at this preliminary 

injunction stage, as a matter of claim construction. The dispositive question was whether 

the term "pharmaceutically acceptable polymer" is limited to the polymers named in the 

specification, or can include other pharmaceutically acceptable polymers. If so limited, it is 

likely that there would not be literal infringement; if not so limited, then literal infringement 

would be possible. (Infringement under the doctrine of equivalents was not addressed by 

the district court, although Sandoz argues the issue “in an abundance of caution.”). 

The meaning and scope of "pharmaceutically acceptable polymer" as used in these 

patents has been litigated in other cases, none of which had been finally decided, but some 

of which had been appealed to the Federal Circuit based on the grant of a preliminary 

injunction. The district court now construed "pharmaceutically acceptable polymer" in 
2007-1300 31

accordance with the construction by the Federal Circuit in Andrx, supra. Sandoz argues on 

this appeal that the correct construction is that of the Federal Circuit’s earlier decision in 

Teva, supra. Sandoz argues that because Teva was the earlier ruling, it could not be 

overturned by the later Andrx panel, citing Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.2d 

757, 765 (Fed. Cir. 1988) ("Where there is a direct conflict [between Federal Circuit panels], 

the precedential decision is the first."). 

Abbott responds that the decision in Andrx was properly followed by this district 

court, for in Teva the "construction" of "pharmaceutically acceptable polymer" was not at 

issue, and this court's comment thereon was dictum. The court in Andrx recognized the 

non-binding nature of that comment in Teva. Indeed, the district court in Teva had stated 

that "[a]t this early stage of the proceedings, the parties have raised no issue as to claim 

construction". Abbott Laboratories v. Andrx Pharmaceuticals, Inc., No. 05 C 1490, 2005 

WL 1323435, at *3, *4 (N.D. Ill. June 03, 2005) (Teva conceding literal infringement but 

challenging validity). 

The panel in Andrx decided the questions now raised by Sandoz concerning the 

“construction” of "pharmaceutically acceptable polymer" and the pharmacokinetic 

requirements in the claims. The Andrx panel also explained its departure from the panel 

decision in Teva. The district court herein, applying Andrx, held that a person of ordinary 

skill in this field would interpret "pharmaceutically acceptable polymer" in terms of the 

following description in the '718 specification: 

"Pharmaceutically acceptable" as used herein, means those compounds, 

which are, within the scope of sound medical judgment, suitable for use in 

contact with the tissues of humans and lower animals without undue toxicity, 

irritation, allergic response, and the like, in keeping with a reasonable 
2007-1300 32

benefit/risk ratio, and effective for their intended use in the chemotherapy and 

prophylaxis of antimicrobial infections. 

'718 patent, col. 3 lines 40-47. The district court referred to the '718 specification's listing of 

pharmaceutically acceptable polymers, but applied the Andrx ruling that the polymers are 

not limited to those that are named in the following paragraph: 

The pharmaceutically acceptable polymer is a water-soluble hydrophilic 

polymer selected from the group consisting of polyvinylpyrrolidine, 

hydroxypropyl cellulose, hydroxypropyl methyl cellulose, methyl cellulose, 

vinyl acetate/crotonic acid copolymers, methacrylic acid copolymers, maleic 

anhydride/methyl vinyl ether copolymers and derivatives and mixtures 

thereof. 

‘718 patent, col. 3 line 65 to col. 4 line 4. The district court construed "pharmaceutically 

acceptable polymer" as: 

[A]ny polymer, which within the scope of sound medical judgment is suitable 

for use in pharmaceutical compositions for use in contact with the tissues of 

humans and lower animals without undue toxicity, irritation, allergic response, 

and the like, in keeping with a reasonable benefit/risk ratio, and effective for 

their intended use in the chemotherapy and prophylaxis of antimicrobial 

infections, and is capable of forming a matrix to extend drug release into the 

bloodstream. Such a "pharmaceutically acceptable polymer" must constitute 

5 to 50% by weight of the product. 

Abbott, 500 F. Supp.2d at 834. The district court, following Andrx, held that the 

usage "from the group consisting of" in the specification is not exclusive, as it would 

be in a Markush-form claim, and did not negate the broader description that is also 

contained in the specification, as quoted above. 

This aspect was debated in the district court, and again on this appeal. Sandoz 

argues that since "pharmaceutically acceptable polymer" is limited by the specification to 

water-soluble hydrophilic polymers, and that since the listed methacrylic acid copolymers 

are known to include water-insoluble as well as water-soluble polymers, the term 
2007-1300 33

"pharmaceutically acceptable polymer" must be construed to mean that the formulation 

cannot include any water-insoluble methacrylic acid or other polymer. The district court, 

receiving this argument, reasoned that "the existence of water-insoluble polymers from the 

specifically-mentioned methacrylic acid co-polymer subset actually militates towards a 

broader construction urged by Abbott that would encompass water-insoluble methacrylic 

acid co-polymers." Abbott, 500 F. Supp.2d at 834. Sandoz argues that this reasoning is 

flawed, and that this court in Andrx erred in rejecting this argument. However, we are not 

persuaded that the Andrx panel's ruling warrants rejection on this argument, for we agree 

with the district court that the fact that some methacrylic acid copolymers are waterinsoluble does not require limiting "pharmaceutically acceptable polymer" to the named 

polymers. 

We conclude that the district court’s claim construction, which is that of Andrx, is 

correct, and that the district court properly declined to follow Teva. Sandoz’ argument that 

Teva was the correct construction and should be revived by the Federal Circuit is hard to 

square with Sandoz’ statement to the district court that “a very important point to make here 

is Sandoz does not rely on the Federal Circuit opinion in the Teva case. . . . Sandoz agrees 

with Abbott.” Statement at the February 12, 2007 preliminary injunction hearing, transcript 

at A11085. 

Sandoz further argues that the district court erred by using the word "matrix" in its 

definition of “pharmaceutically acceptable polymer,” quoted above, pointing out that this 

word does not appear in the claims or specification. However, claim construction often 

calls upon words other than those of the patent, lest the claim simply define itself. “Claim 

construction” is for the purpose of explaining and defining terms in the claims, and usually 
2007-1300 34

requires use of words other than the words that are being defined. See Multiform 

Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1477 (Fed. Cir. 1998) (claims are 

construed as an aid to the decision-maker, by restating the claims in non-technical terms). 

Abbott's expert Dr. Davis had used the word “matrix” in his explanation of the 

technology of extended release. He explained that a “pharmaceutically acceptable 

polymer. . . alone or in combination with other polymers, is capable of forming a matrix 

when mixed with the drug to control and extend drug release into the GI tract and thence to 

the bloodstream." Declaration of Professor Davis, January 10, 2007. Sandoz does not 

dispute that this explanation comports with the description in the specification. Also, Abbott 

cites several scientific publications that use the word "matrix" in this context, and Sandoz 

does not argue that the word has a different meaning from that with which it was used by 

the district court. There is no ground for discarding the district court's claim construction 

based on the word “matrix.” 

Sandoz also argued that the claims must be construed so that the "pharmaceutically 

acceptable polymer" is the only release agent in the composition, argued that the presence 

of any other agent that affects release of the drug removes the composition from the scope 

of the ‘718 claims. Abbott pointed out that the claims use the conventional signal 

"comprising," which means that other ingredients may be present in the composition, in 

addition to those explicitly set forth. See CIAS, Inc. v. Alliance Gaming Corp., 504 F.3d 

1356, 1360 (Fed. Cir. 2007) ("In the patent claim context the term 'comprising' is well 

understood to mean 'including but not limited to'."); Georgia-Pacific Corp. v. United States 

Gypsum Co., 195 F.3d 1322, 1327-28 (Fed. Cir. 1999) ("'comprising' . . . is inclusive or 

open-ended and does not exclude additional unrecited elements or method steps"). 
2007-1300 35

Sandoz argues that the district court's claim construction is incorrect because it 

ignores the distinction between "pharmaceutically acceptable polymers" and 

"pharmaceutically acceptable excipients." We discern no support for this challenge. Abbott 

points out that the distinction between “polymer” and “excipient” lies in its role in the 

composition, as the patent states: "The compositions of the invention further comprise 

pharmaceutically acceptable excipients and/or fillers and extenders, such as lactose . . .". 

'718 patent, col. 4, lines 21-23. We discern no flawed judicial understanding of the term 

“excipient.” 

Sandoz also argued that the components of its accused formulation are merely 

“excipients” in that they do not extend the release of the clarithromycin, while Abbott 

pointed out that Sandoz described its product to the FDA as "extended release." Sandoz 

stated that the extension of release for its product is achieved not by the polymer that is 

present in its composition, but by other components. The district court considered the 

arguments concerning the role of the maltodextrin and the silicified microcrystalline 

cellulose in the Sandoz product. The court discussed the evidence of release rates and 

amounts released, including the information in Sandoz' approved ANDA, the comparative 

data presented by both sides, and various technical articles provided by both sides on the 

physical and chemical characteristics of the components of the Sandoz formulation. The 

court found that “Abbott has demonstrated a substantial likelihood that maltodextrin is a 

polymer that alone or in combination with other polymers, is capable of forming a matrix to 

extend drug release." Abbott, 500 F. Supp.2d at 837. 

Sandoz argues that the district court erred in its evaluation of the evidence, stating 

that Abbott did not show by direct testing that any of the polymers in the Sandoz product 
2007-1300 36

actually extends the release of clarithromycin. Sandoz argues that the district court erred in 

finding unpersuasive certain laboratory tests conducted by Sandoz to show that 

maltodextrin has no significant impact on the dissolution rate of clarithromycin. Abbott 

responds that the district court did not err, and that Sandoz must be deemed to have 

admitted that maltodextrin and silicified microcrystalline cellulose are polymers that, alone 

or in combination with other components, are capable of extending drug release. Abbott 

pointed out to the district court that the developer of the Sandoz formulation, Dr. Nirmal 

Mulye, in his patent application (US 2004/0224017 A1) entitled "Process for Preparing 

Sustained Release Tablets," stated that "the present inventor has found that the addition of 

maltodextrin in effective amounts provides the desired release profile," that “maltodextrin 

also tends to slow down the release of a medicament in a controlled release formulation[,]” 

and that “the maltodextrin used in the present invention is to counteract the accelerated 

rate of release of the drug . . .” We have not been directed to clear error in the district 

court’s findings on this question. 

Sandoz raises additional arguments, some discussed by the district court, and some 

newly presented on this appeal. All have been considered. We conclude that the district 

court’s findings and rulings at this stage of the proceedings have not been shown to 

constitute reversible error. The ruling that Abbott had shown a reasonable likelihood of 

proving infringement is sustained. 

IV 

THE EQUITABLE FACTORS 

Sandoz states that the district court incorrectly resolved and weighed the equitable 

factors relevant to the grant of a preliminary injunction. Sandoz states that the factors of 
2007-1300 37

irreparable harm, the balance of harms, and the public interest, all weigh in its favor, and 

outweigh any finding that Abbott is likely to prevail on the issues of validity or enforceability 

and infringement. The district court considered these factors, and explained its reasoning 

in exercising its discretion to grant the preliminary injunction. 

Irreparable Harm 

Sandoz argued that any harm to Abbott is not irreparable, for damages are available 

for infringement, if the eventual final judgment is adverse to Sandoz. Sandoz pointed out 

that the generic producers Teva and Ranbaxy are already in this market, by settlement with 

Abbott, such that any price erosion due to generic competition is already occurring. The 

district court considered these relationships, and concluded that they do not negate the 

market share and revenue loss upon Sandoz’ entry while the litigation proceeds. 

Precedent supports this conclusion. See, e.g., Purdue Pharma L.P. v. Boehringer 

Ingelheim GmbH, 237 F.3d 1359, 1368 (Fed. Cir. 2001) (likelihood of price erosion and loss 

of market position are evidence of irreparable harm); Bio-Technology Gen. Corp. v. 

Genentech, Inc., 80 F.3d 1553, 1566 (Fed. Cir. 1996) (loss of revenue, goodwill, and 

research and development support constitute irreparable harm); Polymer Technologies, 

Inc. v. Bridwell, 103 F.3d 970, 975-76 (Fed. Cir. 1996) (loss of market opportunities cannot 

be quantified or adequately compensated, and is evidence of irreparable harm). 

The Balance of Hardships 

The district court discussed and weighed the hardships argued by both parties, and 

found that the balance of hardships tipped in favor of Abbott. The court found that 

preserving the status quo preserves the current market structure, recognizing that Abbott 
2007-1300 38

has licensed other generic producers. The district court concluded that "Abbott will lose 

much more if this Court did not enjoin Sandoz's infringing conduct than if the Court enjoins 

Sandoz and it is subsequently found that the '718 patent is invalid or unenforceable." 

Abbott, 500 F. Supp.2d at 845. 

We agree that the fact that a patentee has licensed others under its patents does not 

mean that unlicensed infringement must also be permitted while the patents are litigated. 

Precedent illustrates that when the patentee is simply interested in obtaining licenses, 

without itself engaging in commerce, equity may add weight to permitting infringing activity 

to continue during litigation, on the premise that the patentee is readily made whole if 

infringement is found. In this case the district court received Abbott’s argument that it could 

not be made whole if it prevails in this litigation, for the added erosion of markets, 

customers, and prices, is rarely reversible. See Sanofi-Synthelabo, 470 F.3d at 1383 

(rejecting hardship claim of generic challenger whose “harms were almost entirely 

preventable’ and were the result of its own calculated risk to launch its product prejudgment”). 

Clear error has not been shown in the district court’s finding that the harm to Sandoz 

of delay in entering this market while this case is litigated, is outweighed by the harm to 

Abbott in view of the likelihood that Abbott will succeed in sustaining the validity and 

enforceability of its patents. 

The Public Interest 

Sandoz argues that the public interest favors the availability of less expensive forms 

of successful medicines. The district court considered this argument, and stated: 
2007-1300 39

The Court recognizes the public interest in competition in the pharmaceutical 

market. It also recognizes, however, the public interest in creating beneficial 

and useful products and the cost involved in that process. To the extent that 

this Court has found a substantial likelihood that the ‘718 patent is valid and 

enforceable, there can be no serious argument that public interest is not best 

served by enforcing it. 

500 F. Supp.2d at 846. The district court appreciated that the public interest includes 

consideration of whether, by shifting market benefits to the infringer while litigation is 

pending for patents that are likely to withstand the attack, the incentive for discovery and 

development of new products is adversely affected. The statutory period of exclusivity 

reflects the congressional balance of interests, and warrants weight in considering the 

public interest. In Sanofi-Synthelabo, 470 F.3d at 1383, this court referred to the significant 

“public interest in encouraging investment in drug development and protecting the 

exclusionary rights conveyed in valid pharmaceutical patents.” As the Court explained in 

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974): “The patent laws promote this 

progress by offering a right of exclusion for a limited period as an incentive to inventors to 

risk the often enormous costs in terms of time, research, and development.” Id. at 480. 

Sandoz states that the Court’s recent decision in eBay Inc. v. MercExchange, L.L.C., 

547 U.S. 388 (2006) negates any presumption of entitlement to an injunction upon a finding 

of likelihood that a patent will be sustained and found infringed. The district court did not 

apply such a presumption, but fully considered all of the legal and equitable factors. At the 

preliminary injunction stage, the legal and equitable factors may be of different weight when 

the patentee is itself engaged in commerce, as contrasted with a patentee that is seeking to 

license its patent to others. We need not resolve this aspect for all possible situations, for 

as between Abbott and Sandoz the district court objectively weighed the legal probabilities 
2007-1300 40

and the equities, and exercised its discretionary judgment as to the entirety of the cause. 

We have been shown no basis for believing that the district court abused its discretion. 

V 

THE INJUNCTION BOND 

Sandoz also appeals the amount of the injunction bond, which the district court set 

at $40 million. Sandoz provides no substance for appellate review of the amount of the 

bond, simply stating in its brief that it "presented [to the district court] at least colorable 

evidence that its losses from the injunction and recall would be $200 million," but not 

describing the evidence or arguing its merits. Sandoz simply states that its proposed 

number should have been accepted, in the event that the $40 million is later shown to be 

inadequate. 

This aspect has not been presented in reviewable substance. On this appeal, abuse 

of discretion has been shown in the district court’s setting of the terms of the injunction. 

See Russell v. Farley, 105 U.S. 433, 441 (1881) (the court's discretion in setting the terms 

of an injunction is rooted in equity). 

VI 

THE ISSUE OF CONFLICTING PRECEDENT 

The district court found the likelihood that the patentee would succeed on the merits 

and that the equities favored the patentee, and exercised its discretion to enjoin 

infringement during the litigation. The dissent states that the district court applied the 

incorrect standard, and that if the infringer “raises a substantial question concerning either 

infringement or validity,” diss. op. at 2, it is an abuse of discretion to enjoin infringement 

pendente lite. The dissent quotes with approval a past panel statement that “In resisting a 
2007-1300 41

preliminary injunction, however, one need not make out a case of actual validity. 

Vulnerability is the issue at the preliminary injunction stages, while validity is the issue at 

trial.” Id. Indeed, this court’s precedent makes this statement, in direct conflict with other, 

earlier statements that the standard is not vulnerability, but likelihood of success on the 

merits. 

In response to the arguments expounded in the dissenting opinion, I summarize the 

law governing the grant of a preliminary injunction. The criteria relied on in the dissent are 

not the criteria of any other circuit, nor of the Supreme Court. The correct standard is not 

whether a substantial question has been raised, but whether the patentee is likely to 

succeed on the merits, upon application of the standards of proof that will prevail at trial. 

The question is not whether the patent is vulnerable; the question is who is likely to prevail 

in the end, considered with equitable factors that relate to whether the status quo should or 

should not be preserved while the trial is ongoing. The presentation of sufficient evidence 

to show the likelihood of prevailing on the merits is quite different from the presentation of 

substantial evidence to show vulnerability. 

Thus the evidence that favors the patent must be considered in deciding a motion for 

a preliminary injunction, as well as the evidence against the patent. The trial court then 

decides which side is likely ultimately to prevail. The dissent presents only the case against 

the patent, apparently on the theory that this is all that is needed to raise a “substantial 

question”. 

Indeed, a showing of a substantial question concerning validity or infringement can 

serve to avert judgment on the pleadings, or to avoid the grant of summary judgment, but it 

is not the same as showing likelihood of eventual success on the merits. The dissent 
2007-1300 42

recognizes that it is not the same and that it “requires less proof”, but errs in stating that this 

is sufficient to defeat the grant of a preliminary injunction. Precedent is clear that the 

standard is the likelihood of success of the plaintiff at trial, with recognition of the 

presumptions and burdens. See, e.g., Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 

1367, 1370 (Fed.Cir.2005); Ranbaxy Pharmaceuticals., Inc. v. Apotex, Inc., 350 F.3d 1235, 

1239 (Fed.Cir.2003); Reebok Int’l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed. Cir. 

1994); Smith Int’l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1579 (Fed.Cir.1983). 

Supreme Court precedent, every regional circuit, and controlling Federal Circuit 

precedent, apply to the preliminary injunction the combination of criteria that includes 

likelihood of success on the merits and equitable considerations. No other court has held 

that when the attacker has presented a “substantial question” on its side of the dispute – 

that is, more than a scintilla but less than a preponderance of evidence in support of its side 

– no injunction pendente lite is available. Further, equitable factors are of particular 

significance at the preliminary stage, where the question is whether to change the position 

of the parties during the litigation. See Camenisch, 451 U.S. at 395 (the preliminary 

injunction preserves the position of the parties during the litigation). The dissent does not 

mention the equitable factors that were considered by the district court, as required by 

precedent; the dissent simply states that the injunction must be denied if the attacker has 

raised a substantial question. 

Supreme Court precedent is clear in stating that the same burdens and standards of 

proof apply in deciding the merits for preliminary injunction purposes, as in deciding the 

same questions upon full litigation. See, e.g., Gonzales, 546 U.S. at 429 (placing the 

burdens of proof for showing likelihood of success at the preliminary injunction stage). The 
2007-1300 43

Court explained in Amoco Production Co. v. Village of Gambell, AK, 480 U.S. 531, 546 n.2 

(1987) that: “The standard for a preliminary injunction is essentially the same as for a 

permanent injunction with the exception that the plaintiff must show a likelihood of success 

on the merits rather than actual success.” 

 There is no reason why patent cases require unique treatment. See eBay Inc. v. 

MercExchange, L.L.C., 547 U.S. 388. 394 (2006) (“[T]he decision whether to grant or deny 

injunctive relief rests within the equitable discretion of the district courts, and that such 

discretion must be exercised consistent with traditional principles of equity, in patent 

disputes no less than in other cases governed by such standards.”). The general criterion 

of likelihood of success on the merits, in the context of the equities of the particular case, 

are uniform throughout the regional circuits. All are consistent with the rulings of the 

Supreme Court, and, although the words vary, all refer to the likelihood of the eventual 

outcome, not whether a substantial question has been raised. In brief sampling, starting 

with the First Circuit, the court summarized the standard in Wine and Spirits Retailers, Inc. 

v. Rhode Island, 418 F.3d 36 (1st Cir. 2005): 

The sine qua non of this four-part inquiry is likelihood of 

success on the merits: if the moving party cannot demonstrate 

that he is likely to succeed in his quest, the remaining factors 

become matter of idle curiosity. 

Id. at 46 (citation omitted). The referenced “four-part inquiry” is “(1) the likelihood of 

success on the merits; (2) the potential for irreparable harm [to the movant] if the injunction 

is denied; (3) the balance of relevant impositions, i.e., the hardship to the nonmovant if 

enjoined as contrasted with the hardship to the movant if no injunction issues; and (4) the 

effect (if any) of the court's ruling on the public interest.” Id. (alteration in original) (citations 
2007-1300 44

omitted). 

The Second Circuit also applies the standard four factors. I cite a case that 

emphasized the equitable considerations; in Laureyssens v. Idea Group, Inc., 964 F.2d 

131, 135-36 (2nd Cir. 1992) (emphasis in original) the court stated: “A party seeking a 

preliminary injunction must establish (1) irreparable injury and (2) a likelihood of success on 

the merits or a sufficiently serious question going to the merits and a balance of hardships 

tipping decidedly in the moving party's favor.” 

The Third Circuit also stated that the district court must consider four factors: “[A] the 

likelihood that the applicant will prevail on the merits at final hearing; [B] the extent to which 

the plaintiffs are being irreparably harmed by the conduct complained of; [C] the extent to 

which the defendants will suffer irreparable harm if the preliminary injunction is issued; and 

[D] the public interest.” Opticians Ass’n of Am. v. Independent Opticians of Am., 920 F.2d 

187, 191-92 (3rd Cir.1990) (alterations in original) (citation omitted). In Eli Lilly & Co. v. 

Premo Pharmaceutical Laboratories, Inc., 630 F.2d 120 (3rd Cir. 1980) the court explained 

that when analyzing a preliminary injunction: 

the moving party must generally show (1) a reasonable 

probability of eventual success in the litigation and (2) that the 

movant will be irreparably injured pendente lite if relief is not 

granted. . . . Moreover, while the burden rests upon the moving 

party to make these two requisite showings, the district court 

“should take into account, when they are relevant, (3) the 

possibility of harm to other interested persons from the grant or 

denial of the injunction, and (4) the public interest.” . . . While 

these factors structure the inquiry, however, no one aspect will 

necessarily determine its outcome. Rather, proper judgment 

entails a ‘delicate balancing’ of all elements. On the basis of 

the data before it, the district court must attempt to minimize 

the probable harm to legally protected interests between the 

time that the motion for a preliminary injunction is filed and the 

time of the final hearing. 
2007-1300 45

Id. at 136. Indeed, rulings of the Federal Circuit, along with requiring this “reasonable 

probability of eventual success,” have recognized the “’delicate balancing’ of all elements.” 

See H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387-88 (Fed. Cir. 1987). 

Similarly in the Fourth Circuit the inquiry is: “1) Has the petitioner made a strong 

showing that it is likely to prevail upon the merits? 2) Has the petitioner shown that without 

such relief it will suffer irreparable injury? 3) Would the issuance of the injunction 

substantially harm other interested parties? 4) Wherein lies the public interest?” 

Blackwelder Furniture Co. of Statesville, Inc. v. Seiling Mfg. Co., 550 F.2d 189, 193 (4th 

Cir. 1977) (when reviewing the grant of denial of interim injunctive relief “our review of the 

lower court’s application of the law is not limited by the same ‘clearly erroneous’ rule which 

restricts our review of its findings of fact under Rule 52(a)”); see First-Citizens Bank & Trust 

Co. v. Camp, 432 F.2d 481, 484 (4th Cir. 1970) (applying the four-factors and reversing the 

district court’s grant of a preliminary injunction). 

In the Fifth Circuit the four factors are recited as “(1) a substantial likelihood that 

plaintiff will prevail on the merits, (2) a substantial threat that plaintiff will suffer irreparable 

injury if the injunction is not granted, (3) that the threatened injury to plaintiff outweighs the 

threatened harm the injunction may do to defendant, and (4) that granting the preliminary 

injunction will not disserve the public interest.” Canal Authority of State of Florida v. 

Callaway, 489 F.2d 567, 573 (5th Cir. 1974). The “substantial likelihood of prevailing” is not 

the same as raising a substantial question. 

Again for the Sixth Circuit, the “well-established” factors are: “(1) the likelihood that 

the party seeking the preliminary injunction will succeed on the merits of the claim; (2) 
2007-1300 46

whether the party seeking the injunction will suffer irreparable harm without the grant of the 

extraordinary relief; (3) the probability that granting the injunction will cause substantial 

harm to others; and (4) whether the public interest is advanced by the issuance of the 

injunction,” Six Clinics Holding Corp. II v. Cafcomp Systems, Inc., 119 F.3d 393, 399 (6th 

Cir. 1997). The court recognized that “a finding that the movant has not established a 

strong probability of success on the merits will not preclude a court from exercising its 

discretion to issue a preliminary injunction if the movant has, at minimum, ‘show[n] serious 

questions going to the merits and irreparable harm which decidedly outweighs any potential 

harm to the defendant if the injunction is issued.’” Id. at 400 (alteration in original). This 

ruling gave weight to the court’s discretion to preserve the status quo during the litigation, 

when the equitable factors warrant such discretion. 

In the Seventh Circuit: 

As a threshold matter, a party seeking a preliminary injunction 

must demonstrate (1) some likelihood of succeeding on the 

merits, and (2) that it has “no adequate remedy at law” and will 

suffer “irreparable harm” if preliminary relief is denied. If the 

moving party cannot establish either of these prerequisites, a 

court's inquiry is over and the injunction must be denied. If, 

however, the moving party clears both thresholds, the court 

must then consider: (3) the irreparable harm the non-moving 

party will suffer if preliminary relief is granted, balancing that 

harm against the irreparable harm to the moving party if relief 

is denied; and (4) the public interest, meaning the 

consequences of granting or denying the injunction to nonparties. 

Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992). This court has 

observed that the standard for granting or denying a motion for a preliminary injunction is 

not unique to patent law, and has ruled that the standard of the regional circuit should 

apply, here the Seventh Circuit. See Mikohn Gaming Corp. v. Acres Gaming, Inc., 165 
2007-1300 47

F.3d 891, 894 (Fed. Cir. 1998) (“The Federal Circuit has generally viewed the grant of a 

preliminary injunction as a matter of procedural law not unique to the exclusive jurisdiction 

of the Federal Circuit, and on appellate review has applied the procedural law of the 

regional circuit in which the case was brought.”). 

In the Eighth Circuit, “The relevant factors on a motion for a preliminary injunction 

are: (1) the probability of success on the merits; (2) the threat of irreparable harm to the 

movant; (3) the balance between this harm and the injury that granting the injunction will 

inflict on other interested parties; and (4) whether the issuance of an injunction is in the 

public interest.” Entergy, Arakansa, Inc. v. Nebraska, 210 F.3d 887, 898 (8th Cir. 2000). In 

Shrink Missouri Government PAC v. Adams, 151 F.3d 763, 764 (8th Cir. 1998) the court 

stressed that “[t]he most important of the [preliminary injunction] factors is the appellants' 

likelihood of success on the merits.” 

The Ninth Circuit stressed the importance of the equitable factors: “Preliminary 

injunctive relief is available to a party who demonstrates either: (1) a combination of 

probable success on the merits and the possibility of irreparable harm; or (2) that serious 

questions are raised and the balance of hardships tips in its favor. These two formulations 

represent two points on a sliding scale in which the required degree of irreparable harm 

increases as the probability of success decreases.” Perfect 10, Inc. v. Amazon.com, Inc., 

487 F.3d 701, 713-14 (9th Cir. 2007). 

In the Tenth Circuit, “To obtain a preliminary injunction, the moving party must 

establish that (1) the moving party will suffer irreparable injury unless the injunction issues; 

(2) the threatened injury to the moving party outweighs whatever damage the proposed 

injunction may cause the opposing party; (3) the injunction, if issued, would not be adverse 
2007-1300 48

to the public interest; and (4) there is a substantial likelihood that the moving party will 

eventually prevail on the merits.” Resolution Trust Corp. v. Cruce, 972 F.2d 1195, 1199 

(10th Cir. 1992) (“When a party seeking a preliminary injunction satisfies the first three 

requirements, the standard for meeting the fourth ‘probability of success’ prerequisite 

becomes more lenient. The movant need only show ‘questions going to the merits so 

serious, substantial, difficult and doubtful, as to make them a fair ground for litigation.’”). 

In the Eleventh Circuit, “A district court may grant injunctive relief if the movant 

shows (1) a substantial likelihood of success on the merits; (2) that irreparable injury will be 

suffered unless the injunction issues; (3) that the threatened injury to the movant outweighs 

whatever damage the proposed injunction may cause the opposing party, and (4) that if 

issued the injunction would not be adverse to the public interest.” All Care Nursing Service, 

Inc. v. Bethesda Memorial Hosp. Inc., 887 F.2d 1535, 1537 (11th Cir. 1989). 

In the District of Columbia Circuit, “In considering whether to grant preliminary 

injunctive relief, the court must consider whether: (1) the party seeking the injunction has a 

substantial likelihood of success on the merits; (2) the party seeking the injunction will be 

irreparably injured if relief is withheld; (3) an injunction will not substantially harm other 

parties; and (4) an injunction would further the public interest.” CSX Transp. Inc. v. 

Williams, 406 F.3d 667, 670 (D.C. Cir. 2005). 

All of the circuits have placed the preliminary injunction in terms of the likelihood of 

success on the merits and equitable factors. No circuit has held that it suffices simply to 

raise a “substantial question.” Raising a substantial question achieves the threshold 

requirement of the well-pleaded complaint; it does not demonstrate a likelihood of 

prevailing. See Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 808-809 
2007-1300 49

(1988) (“A district court's federal-question jurisdiction, we recently explained, extends over 

‘only those cases in which a well-pleaded complaint establishes either that federal law 

creates the cause of action or that the plaintiff's right to relief necessarily depends on 

resolution of a substantial question of federal law [.]’”) (citation omitted); Litecubes, LLC v. 

Northern Light Products, Inc., 523 F.3d 1353, 1360 (Fed. Cir. 2008) (“Under what is known 

as the ‘well-pleaded complaint rule,’ subject matter jurisdiction exists if a ‘well-pleaded 

complaint establishes either that federal patent law creates the cause of action or that the 

plaintiff's right to relief necessarily depends on resolution of a substantial question of 

federal patent law, in that patent law is a necessary element of one of the well-pleaded 

claims.’”) (citations omitted). 

Federal Circuit precedent developed to match the rest of the nation. See Hybritech 

Inc. v. Abbott Laboratories, 849 F.2d 1446, 1451 (Fed. Cir. 1988) (“The first factor required 

to be established by a party seeking a preliminary injunction is that it stands to have a 

reasonable likelihood of success on the merits when the trial court finally adjudicates the 

dispute. In seeking a preliminary injunction pursuant to section 283, a patent holder must 

establish a likelihood of success on the merits both with respect to validity of its patent and 

with respect to infringement of its patent.”); H.H. Robertson Co., 820 F.2d at 387 (observing 

that the preliminary injunction in the Third Circuit “is substantially the same standard 

enunciated by this court,” and that “[t]he standards applied to the grant of a preliminary 

injunction are no more nor less stringent in patent cases than in other areas of the law”); 

Roper Corp. v. Litton Systems Inc., 757 F.2d 1266, 1270-73 (Fed. Cir. 1985) (reviewing 

denial of a preliminary injunction by assessing likelihood of success and irreparable injury); 

Pretty Punch Shoppettes, Inc. v. Hauk, 844 F.2d 782, 783 (Fed. Cir. 1988) (determining 
2007-1300 50

likelihood of success on the merits); Nutrition 21 v. United States, 930 F.2d 867, 869 (Fed. 

Cir. 1991) (applying the four-factor test including likelihood of success on the merits); Texas 

Instruments Inc. v. Tessera, Inc., 231 F.3d 1325, 1329 (Fed. Cir. 2000) (in an ITC 

proceeding, applying the traditional four-factor test including likelihood of success on the 

merits); Hoop v. Hoop, 279 F.3d 1004, 1007 (Fed. Cir. 2002) (applying the traditional four 

factor test including likelihood of success); Ranbaxy, 350 F.3d at 1239 (applying the four 

factors of “(1) a reasonable likelihood of success on the merits; (2) irreparable harm if the 

injunction were not granted; (3) the balance of the hardships and (4) the impact of the 

injunction on the public interest” and holding that the showing of a reasonable likelihood of 

success on the merits must be “in light of the presumptions and burdens that will inhere at 

trial on the merits”). 

Summary 

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, 
2007-1300 51

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. 

The district court analyzed the positions of both sides as well as the equitable 

factors, decided that Abbott was likely to prevail on the merits and that the equitable 

factors weighed in favor of Abbott, and exercised its discretion to grant the preliminary 

injunction. The dissent states that a showing of “vulnerability” shows that the defendant 

is likely to prevail on the merits; that is facially incorrect. The dissent also relies on 

some recent (2008) Federal Circuit decisions; these decisions are not “clearly 

established precedent,” for they cannot overcome earlier rulings of this court. Further, 

until today no opinion has equated the raising of a “substantial question” with a showing 

of likelihood of success on the merits. The following additional cases of the Federal 

Circuit are cited to show the established law: Jeneric/Pentron, Inc. v. Dillon Co., Inc., 

205 F.3d 1377, 1380 (Fed. Cir. 2000) (“A preliminary injunction requires the movant to 

show four factors . . . [and] ‘[c]entral to the movant’s burden are the likelihood of 

success and irreparable harm factors.’”); Intergraph Corp. v. Intel Corp., 195 F.3d 1346, 

1352 (Fed. Cir. 1999) (applying 11th Circuit law for a preliminary injunction, the criteria 

are “(1) the party seeking the injunction has shown a substantial likelihood of success 

on the merits, (2) there is a substantial threat of irreparable injury in absence of the 

injunction, (3) the balance of harms favors the party seeking the injunction, and (4) entry 

of the injunction does not disserve the public interest.”); Mentor Graphics Corp. v. 

Quickturn Design Systems, Inc., 150 F.3d 1374, 1377 (Fed. Cir. 1998) (“A preliminary 

injunction requires the assessment of four factors: the likelihood of movant's success on 

the merits, the irreparability of harm to the movant without an injunction, the balance of 
2007-1300 52

hardships between the parties, and the demands of the public interest.”); Polymer 

Technologies, Inc. v. Bridwell, 103 F.3d 970, 973 (Fed. Cir. 1996) (“As the moving party, 

Polymer had to establish its right to a preliminary injunction in light of four factors: (1) a 

reasonable likelihood of success on the merits; (2) irreparable harm if the injunction 

were not granted; (3) the balance of the hardships and (4) the impact of the injunction 

on the public interest.”); Bio-Technology Gen. Corp. v. Genentech, Inc., 80 F.3d 1553, 

1558 (Fed. Cir. 1996) (“As the moving party, Genentech had to establish a right to a 

preliminary injunction in light of four factors: (1) a reasonable likelihood of success on 

the merits; (2) irreparable harm if the injunction were not granted; (3) the balance of 

hardships tipping in its favor; and (4) the impact of the injunction on the public 

interest.”); Rosemount, Inc. v. Int’l Trade Comm’n, 910 F.2d 819, 821 (Fed. Cir. 1990) 

(“To grant the equitable relief of an injunction prior to trial, a district court traditionally 

considers and balances the factors of: (1) the movant's likelihood of success on the 

merits; (2) whether or not the movant will suffer irreparable injury during the pendency 

of the litigation if the preliminary injunction is not granted; (3) whether or not that injury 

outweighs the harm to other parties if the preliminary injunction is issued; and (4) 

whether the grant or denial of the preliminary injunction is in the public interest.”); Katz 

v. Lear Siegler, Inc., 909 F.2d 1459, 1462-63 (Fed. Cir. 1990) (applying 1st Circuit law 

for a preliminary injunction, the criteria are “(1) that plaintiff will suffer irreparable injury if 

the injunction is not granted; (2) that such injury outweighs any harm which granting 

injunctive*1463 relief would inflict on the defendant; (3) that plaintiff has exhibited a 

likelihood of success on the merits; and (4) that the public interest will not be adversely 

affected by the granting of the injunction.”); Cicena Ltd. v. Columbia 
2007-1300 53

Telecommunications Group, 900 F.2d 1546, 1548 (Fed. Cir. 1990) (applying 2nd Circuit 

law for a preliminary injunction which requires that the movant must establish “both 

possible irreparable injury and either (1) a likelihood of success on the merits or (2) 

sufficiently serious questions going to the merits to make them a fair ground for litigation 

and a balance of hardships tipping decidedly in the movant's favor.”); Xeta, Inc. v. Atex, 

Inc., 852 F.2d 1280, 1282 (Fed. Cir. 1988) (applying 1st Circuit law for a preliminary 

injunction, the criteria are that “as in other causes of action, the plaintiff must show that 

there is no adequate remedy at law, that the plaintiff will suffer irreparable injury absent 

the requested injunction, that such irreparable injury outweighs the harm an injunction 

would inflict on the defendant, that the plaintiff has shown a likelihood of success on the 

merits, and that the public interest will not be adversely affected by the grant of the 

requested injunction.”); Matsushita Electric Industrial Co. v. United State, 823 F.2d 505, 

(Fed. Cir. 1987) (“The preliminary injunction issued by the Court of International Trade 

must be upheld if that court properly found that [the movant] had shown (1) that it will be 

immediately and irreparably injured; (2) that there is a likelihood of success on the 

merits; (3) that the public interest would be better served by the relief requested; and (4) 

that the balance of hardship on all the parties favors [the movant].”); T.J. Smith and 

Nephew Ltd. v. Consol. Medical Equipment, Inc., 821 F.2d 646, 647 (Fed. Cir. 1987) 

(“To obtain a preliminary injunction in a patent infringement action pursuant to 35 U.S.C. 

§ 283, a party must establish a right thereto in light of four factors: (a) reasonable 

likelihood of success on the merits; (b) irreparable harm; (c) a balance of hardships 

tipping in its favor; and (d) that the issuance of the injunction is in the public interest.”); 

S. J. Stile Associates Ltd. v. Snyder, 646 F.2d 522, 525 (CCPA 1981) (“The trial court 
2007-1300 54

must be upheld if it examined the appropriate factors and properly concluded that any 

one of these requisites for a preliminary injunction had not been established by the 

[movant]: (1) a threat of immediate irreparable harm; (2) that the public interest would 

be better served by issuing than by denying the injunction; (3) a likelihood of success on 

the merits; and (4) that the balance of hardship on the parties favored [the movant].”); 

Jacobsen v. Katzer, 535 F.3d 1373, 1378 (Fed. Cir. 2008) (applying 9th circuit law for 

preliminary injunction in a copyright infringement claim which requires the showing of 

“(1) a combination of probability of success on the merits and the possibility of 

irreparable harm or (2) serious questions going to the merits where the balance of 

hardships tips sharply in the moving party’s favor.”). 

These rulings of the Federal Circuit accord with the principles of eBay, 547 U.S. at 

394, that “the decision whether to grant or deny injunctive relief rests within the equitable 

discretion of the district courts, and that such discretion must be exercised consistent with 

traditional principles of equity, in patent disputes no less than in other cases governed by 

such standards.” This court’s contrary opinions stand alone. If in fact this court believes 

that there should be a different rule in patent cases, this court nonetheless has the rule that 

in the event of conflict between panels the earlier holding prevails until overturned en banc. 

Newell Companies v. Kenney Mfg. Corp., 864 F.2d 757, 765 (Fed. Cir. 1988) (“This court 

has adopted the rule that prior decisions of a panel of the court are binding precedent on 

subsequent panels unless and until overturned in banc. . . . Where there is a direct conflict, 

the precedential decision is the first.”). If there is to be a change from this court’s prior 

rulings, it must be done en banc. 

As it stands, neither district courts, nor litigants, nor panels of this court, are provided 
2007-1300 55

with clear guidance, or any reason to reject the stricture of eBay, 547 U.S. at 393, that 

“[n]othing in the patent Act indicates that Congress intended such a departure” from “the 

long tradition of equity practice”. 

CONCLUSION 

Abuse of discretion has not been shown in the district court’s grant of the preliminary 

injunction, adhered to after additional consideration in view of the Court’s decision of KSR. 

The district court's findings of fact underlying the legal and equitable considerations are 

supported, and the judicial balancing of these considerations shows no abuse of discretion. 

The grant of the injunction is affirmed. The case is remanded for further proceedings.5

AFFIRMED

 5

 Sandoz requests that we instruct that on remand this case should be 

assigned to a different judge, in order to "further the interests of judicial economy". We 

discern no basis for this request; it is denied. 
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT 

2007-1300 

ABBOTT LABORATORIES, 

Plaintiff-Appellee, 

v. 

SANDOZ, INC., 

Defendant-Appellant. 

Appeal from the United States District Court for the Northern District of Illinois in case 

no. 05-CV-5373, Judge David H. Coar. 

GAJARSA, Circuit Judge, dissenting. 

I respectfully dissent from the court’s opinion. There is no legal basis for the 

granting of a preliminary injunction, and its issuance is an abuse of discretion. Although 

generally the denial or issuance of a preliminary injunction is within the broad discretion 

of the district court, the decision of the district court must be reversed when it abuses its 

discretion. 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.”). 

“A preliminary injunction requires the movant to show four factors: (1) a 

reasonable likelihood of success on the merits, (2) the prospect of irreparable harm, (3) 

a balance of the parties’ hardships in favor of injunction, and (4) no potential injury to an 
important public interest.” See Jeneric/Pentron, Inc. v. Dillon Co., 205 F.3d 1377, 1380 

(Fed. Cir. 2000). When the district court considers the four factors, “the likelihood of 

success factor plays a key role,” id., and that is the factor I will focus on in my dissent. 

Because of “the extraordinary nature of the relief, the patentee carries the burden of 

showing likelihood of success on the merits,” in light of the presumptions and burdens 

that will inhere at trial, with respect to the patent’s validity, enforceability, and 

infringement. Nutrition 21 v. United States, 930 F.2d 867, 869 (Fed. Cir. 1991) 

(emphasis in original); see also Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 

F.3d 1343, 1350 (Fed. Cir. 2001). If the defendant “raises a substantial question 

concerning either infringement or validity, i.e., asserts an infringement or invalidity 

defense that the patentee cannot prove ‘lacks substantial merit,’ the preliminary 

injunction should not issue.” Amazon.com, 239 F.3d at 1350-51. This court has 

explained that: 

In resisting a preliminary injunction, however, one need not make out a 

case of actual invalidity. Vulnerability is the issue at the preliminary 

injunction stages, while validity is the issue at trial. The showing of a 

substantial question as to invalidity thus requires less proof than the clear 

and convincing showing necessary to establish invalidity itself. 

Abbott Labs. v. Andrx Pharms., Inc., 452 F.3d 1331, 1335 (Fed. Cir. 2006) (herein 

“Andrx”) (quoting Amazon.com, 239 F.3d at 1359). 

 The majority opinion postulates that the findings of the district court are correct. 

It is error to so conclude because the district court failed to properly consider and weigh 

the ample evidence produced by Sandoz that clearly established a substantial question 

of invalidity and rendered the patent vulnerable to an invalidity challenge at trial. 

Instead, the district court erroneously required proof of clear and convincing evidence of 

2 

2007-1300 
invalidity at the preliminary stages of the proceedings. As I explain below, this conflicts 

with our clearly established precedent. 

Under our precedent, the likelihood of success factor is properly analyzed by 

considering whether the alleged infringer raises a substantial question as to validity. 

See, e.g., E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, L.L.C., 525 

F.3d 1353, 1358 (Fed. Cir. 2008) (“[I]f the accused infringer raises a substantial 

question regarding validity, the district court should find that the patentee has not shown 

a likelihood of success on the merits.” (internal quotation marks omitted)). Indeed, this 

court has consistently held that an alleged infringer can negate the patentee’s likelihood 

of success on the merits—and thus defeat a preliminary injunction—by raising a 

substantial question as to validity. For example, in Genentech, this court explained: 

In order to demonstrate that it has a likelihood of success, [the patentee] 

must show that, in light of the presumptions and burdens that will inhere at 

trial on the merits, (1) it will likely prove that [the alleged infringer] infringes 

the [] patent and (2) its infringement claim will likely withstand [the alleged 

infringer’s] challenges to the validity and enforceability of the [] patent. In 

other words, if [the alleged infringer] raises a “substantial question” 

concerning validity, enforceability, or infringement (i.e., asserts a defense 

that [the patentee] cannot show “lacks substantial merit”) the preliminary 

injunction should not issue. More specifically, with regard to [the alleged 

infringer’s] validity defenses, the question on appeal is whether there is 

substantial merit to [the alleged infringer’s] assertion that the [] patent 

claim [is invalid]. 

Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997). Our 

subsequent cases consistently applied the law as it was explained in Genentech. See, 

e.g., Tate Access Floors v. Interface Architectural Res., 279 F.3d 1357, 1365 (Fed. Cir. 

2002) (“In order to demonstrate likely success on the merits, [the patentee] must show 

that, in light of the presumptions and burdens applicable at trial, it will likely prove that 

3 

2007-1300 
[the alleged infringer] infringes the asserted claims of the [] patent and that the patent 

will likely withstand [the alleged infringer’s] challenges to its validity. If [the alleged 

infringer] raises a substantial question concerning infringement or validity, meaning that 

it asserts a defense that [the patentee] cannot prove ‘lacks substantial merit,’ the 

preliminary injunction issued improperly.” (internal citations omitted; citing Genentech, 

108 F.3d at 1364 and Amazon.com, 239 F.3d at 1350-51)). 

Our most recent cases continue to adhere to the law as it was explained in 

Genentech. See, e.g., Erico Int'l Corp. v. Vutec Corp., 516 F.3d 1350, 1352, 1354 (Fed. 

Cir. 2008) (stating that “[the alleged infringer] must show a substantial question of 

invalidity to avoid a showing of likelihood of success” and vacating the preliminary 

injunction “[b]ecause this court finds that [the alleged infringer] has raised a substantial 

question as to the validity of the patent at issue”); PHG Techs., LLC v. St. John Cos., 

469 F.3d 1361, 1365, 1369 (Fed. Cir. 2006) (explaining that “in order to defeat the 

injunction on grounds of potential invalidity, [the alleged infringer], as the party bearing 

the burden of proof on the issue at trial, must establish a substantial question of 

invalidity” and holding the district court clearly erred in finding the patentee was likely to 

succeed “because [the alleged infringer] has satisfied its burden of raising a substantial 

question of invalidity”). Thus, under our clearly established precedent, when the alleged 

infringer raises a substantial question regarding validity, a preliminary injunction cannot 

issue because the patentee has failed to demonstrate a likelihood of success on the 

merits. 

 While Section VI of the opinion contains a superfluity of citations, it does not state 

the law relevant to this case. It is a pleasant, ambulatory, and meandering discussion; 

4 

2007-1300 
but it is not required to decide this case, is not part of the majority opinion, and is clearly 

dicta. Although Section VI discusses the relevant four-factor test and properly 

emphasizes the likelihood of success factor, it ignores the way this court has 

consistently analyzed whether or not a patentee has demonstrated it will likely succeed 

at trial. The real question before us in this case, as our precedent clearly explains, is 

whether the district court erred in finding that Sandoz had not established a substantial 

question as to the obviousness of the ’718 patent. See, e.g., Genentech, 108 F.3d at 

1364 (“[T]he question on appeal is whether there is substantial merit to [the alleged 

infringer’s] assertion that the [] patent claim [is invalid].”). Sandoz has, in fact, raised 

and substantially established that the validity of the ’718 patent is vulnerable, and on the 

record before us, Abbott failed to prove the invalidity defense “lacks substantial merit.” 

See Amazon.com, 239 F.3d at 1350-51 (“If [the alleged infringer] raises a substantial 

question concerning either infringement or validity, i.e., asserts an infringement or 

invalidity defense that the patentee cannot prove ‘lacks substantial merit,’ the 

preliminary injunction should not issue.”). Thus, the district court committed reversible 

error when it analyzed the likelihood of success factor and determined that Abbott had 

established it would likely succeed on the merits. In light of that error, I would vacate 

the preliminary injunction and remand for reconsideration and reweighing of the 

injunctive factors. Moreover, various additional legal errors taint the district court’s 

decision. 

I. 

 The district court’s grant of a preliminary injunction rested on only two claims, 

claims 1 and 4 of the ’718 patent. Claim 1 reads: 

5 

2007-1300 
a pharmaceutical composition for extended release of an erythromycin 

derivative in the gastrointestinal environment, comprising 

an erythromycin derivative and 

 

from about 5[%] to about 50% by weight of a pharmaceutically acceptable 

polymer[1

], so that when ingested orally, the composition induces 

statistically significantly lower mean fluctuation index [DFL] in the plasma 

than an immediate release composition of the erythromycin derivative 

while maintaining bioavailability substantially equivalent to that of the 

immediate release composition of the erythromycin derivative. 

’718 Patent, col.11 ll.28-38. Claim 4 similarly claims an erythromycin derivative and 

“from about 5[%] to about 50% by weight of a pharmaceutically acceptable polymer” but 

has different PK parameters. Id. col.11 ll.48-58. Claim 2 and claim 3 are dependant 

claims of claim 1. Claim 2 claims “the pharmaceutical composition of claim 1, wherein 

the polymer is a hydrophilic water-soluble polymer.” Id. col.11 ll.39-40. Claim 3 claims 

“the pharmaceutical composition of claim 2, wherein the polymer is selected from the 

group consisting of polyvinylpyrrolidine, hydroxypropyl cellulose, hydroxypropylmethyl 

cellulose, methyl cellulose, vinyl acetate/crotonic acid copolymers, methacrylic acid 

copolymers, maleic anhydride/methyl vinyl ether copolymers and derivatives and 

mixtures thereof.” Id. col.11 ll.41-47. 

Claims 1 and 4 of the ’718 patent have three basic limitations: (a) an 

erythromycin derivative; (b) 5% to 50% by weight of a pharmaceutically acceptable 

 1

 The specification of the ’718 patent states, in a list of definitions, that 

“‘pharmaceutically acceptable’ as used herein, means those compounds which are, 

within the scope of sound medical judgment, suitable for use in contact with the tissues 

of humans and lower animals without undue toxicity, irritation, allergic response, and the 

like, in keeping with a reasonable benefit/risk ratio, and effective for their intended use 

in the chemotherapy and prophylaxis of antimicrobial infections.” In my judgment the 

district court’s claim construction is ambiguous as to whether the pharmaceutically 

acceptable polymer must extend release or whether it can be part of a matrix in which 

other components extend the release. Sandoz is correct that there needs to be some 

showing that the polymer acts to extend release. 

6 

2007-1300 
polymer; and (c) various PK parameters. In the preferred embodiment, the 

erythromycin derivative is clarithromycin and the pharmaceutically acceptable polymer 

is HPMC at 10% to 30% by weight of the composition. Claim 4 requires PK parameters 

be such that “upon oral ingestion, maximum peak concentrations of the erythromycin 

derivative are lower than those produced by an immediate release pharmaceutical 

composition, and [AUC] and the minimum plasma concentration are substantially 

equivalent to that of the immediate release pharmaceutical composition.” Id. col.11 

ll.52-58. Claim 1 achieves similar results with slightly different parameters. For claim 1, 

the composition must have a “statistically significantly lower mean fluctuation index,” 

DFL, which is defined in the specification as DFL=(Cmax-Cmin/CAv), id. col.3 ll.29-30, and 

substantially equivalent bioavailability, which the district court found meant that the 

“[ER] AUC values must be between 80% to 125% within a 90% confidence level as 

compared to the immediate release composition AUC values.”2 Abbott Labs. v. 

Sandoz, Inc., 500 F. Supp. 2d 807, 831 (N.D. Ill. 2007) (herein “Sandoz I”). 

II. 

Sandoz based its obviousness arguments primarily on three prior art references, 

which it argues combined with common sense and the ordinary skill of the art at the 

time make the ’718 patent anticipated or obvious. First, Sandoz argues that the PTC 

Application WO 95/30422 (“the ’422 publication”) filed by Pfizer, discloses a controlled 

release dosage form of azithromycin, which like clarithromycin is an erythromycin 

derivative.3

 According to the disclosure, these controlled released compositions 

 2

 These figures are based on FDA definitions. 

3

 Abbott specifically carved out azithromycin from its definition of an 

erythromycin derivative in the ’718 patent. See Andrx, 452 F.3d at 1337.

7 

2007-1300 
operate to release the drug substantially slower than the immediate release versions to 

reduce GI side effects. And, as Sandoz points out, the controlled release compositions 

disclosed in the ’422 publication include a hydrophilic polymer composition of 

azithromycin, with a preferred embodiment being a matrix tablet containing 15% to 35% 

HPMC. Second, Sandoz noted that the ’190 patent owned by Abbott discloses and 

claims controlled release compositions of clarithromycin in an (non-polymer) alginate 

matrix which are administered once a day and have slowed absorption such that they 

are bioequivalent with the current immediate release twice-a-day compositions and 

maintain therapeutic levels at 24 hours after ingestion. Claim 14 of the ’190 patent also 

claims other marolides including azithromycin.4

 Third, Sandoz argues that the ’571

 4

 In Andrx, this court relied primarily on the ’190 patent, as combined with 

the ’422 publication to find that there was a substantial question as to the obviousness 

of the ’718 patent claims. 452 F.3d at 1340-41. First, we concluded that “Teva makes 

substantial arguments that the ’190 patent discloses a clarithromycin composition . . . 

that arguably has the pharmacokinetic parameters required in claim 4 of the ’718 

patent.” Id. at 1340. And we explained: 

Because the ’190 patent explicitly discloses only clarithromycin controlled 

release compositions, yet claims azithromycin compositions, . . . Abbott 

has represented to the [PTO] that the differences between clarithromycin 

and azithromycin were such that azithromycin could be substituted into a 

controlled release clarithromycin composition by a person of ordinary skill 

in the art without undue experimentation . . . . As a result, based on 

Abbott’s own ’190 patent, there exists a substantial argument that a 

person of ordinary skill in the art would be motivated to combine the ’422 

publication, namely the use of HPMC in extended release macrolide 

compositions, with the ’190 patent with a reasonable expectation of 

success. 

Id. at 1341. In this case, Abbott presented evidence at trial suggesting that this court 

was scientifically incorrect to find that the ’190 patent disclosed compounds that 

arguably had the same PK values as the asserted claims. Sandoz, based on this new 

evidence, disclaimed any reliance on the scientific evidence of the ’190 patent 

disclosing compounds with the same PK values as the ’718 patent. However, contrary 

to the majority opinion, Sandoz can rely on Andrx’s conclusion that it would have been 

obvious for a person skilled in the art to substitute clarithromycin for azithromycin in an 

8 

2007-1300 
publication, filed by Eli Lilly, discloses sustained release formulations for antimicrobial 

agents including clarithromycin, which contain an active agent, namely a hydrophilic 

polymer such as HPMC, and an acrylic polymer. According to the specification, these 

formulations differ from the prior art that uses just hydrophilic polymers in that they are 

designed to allow a constant rate of release throughout the GI tract. In particular, the 

’571 publication disclosed using from about 5% to about 29% by weight hydrophilic 

polymer, and about 0.5% to about 25% by weight acrylic polymer, with the total weight 

of the two polymers not exceeding 30% by weight. 

In addition to challenging the validity of the ’718 patent based on the ’190 patent, 

the ’422 publication and the ’571 publication, Sandoz also relies on various evidence 

that the PK parameters specified in the ’718 patent were well known in the art and 

would have been sought by anyone designing a controlled release formulation. Most 

strikingly, the testimony of one of the inventors named on the ’718 patent, Linda 

Gustavson, an Abbott employee, supports the Sandoz position. In particular, 

Gustavson testified as follows: 

Q: Did you tell [the formulations department] what pharmacokinetic 

parameters there should be? 

A: I mean, not specific numbers, but relative to the IR, yes. I told at 

least Sue that what we needed was a lower Cmax, an AUC that met 

FDA requirements for bioequivalence and a Cmin that was at least 

comparable to the IR. 

Q: And where did you get these parameters? 

. . . 

A: A few years of experience, I guess. They’re the—I mean certainly 

the Cmax and AUC are very basic PK parameters determined in 

virtually every study that has pharmacokinetics. Cmin [] might or 

might not be important depending upon the drug you were talking 

 

extended release formula with the anticipation of success without undue 

experimentation. 

9 

2007-1300 
about and what part of the pharmacokinetics you though might be 

associated with efficacy or safety. For clarithromycin, there was 

some thought that keeping the concentrations above some 

minimum level might be at least in part important to maintaining 

effectiveness efficacy. 

Q: Would you say that these PK parameters were pretty much known 

in the art? 

A: Absolutely, yes. 

Furthermore, Sandoz submitted references from 1983 (over a decade before the 

’718 application was submitted), which explained, inter alia, that the “objectives and 

possible advantages of controlled release dosage” forms included “maintain[ing] 

therapeutic drug levels,” “reduc[ing] dosing frequency,” “reduc[ing] fluctuations in drug 

levels,” and “reduc[ing] side effects.” And the reference explained that the “essence of 

controlled drug release” was to “obtain prolonged circulating drug levels with less 

fluctuation compared to conventional dosage forms, and to achieve these with less 

frequent drug administration.” They also submitted references showing that HPMC was 

considered the “controlled release agent of choice” in the field.

 The district court, writing prior to KSR, found that, despite this Court’s decision in 

Andrx to the contrary, claims 1 and 4 of the ’718 patent were not obvious (at least based 

on the preliminary record). The trial court’s finding rested on the fact that, contrary to 

this court’s conclusion in Andrx, new evidence established that the ’190 patent, the ’571 

publication, and the WO ’422 publication did not disclose the specific PK limitations of 

the ’718 patent. The court recognized that “[g]enerally, a showing that there is an 

established structural relationship between a prior art composition and the claimed 

composition demonstrates a prima facie case of obviousness.” Sandoz I, 500 F. Supp. 

2d at 840. See In re Dillon, 919 F.2d 688, 692 (Fed. Cir. 1990) (en banc) (“[S]tructural 

10 

2007-1300 
similarity between claimed and prior art subject matter, proved by combining references 

or otherwise, where the prior art gives reason or motivation to make the claimed 

compositions, creates a prima facie case of obviousness.”). Still, the court concluded 

that Abbott had preliminarily rebutted this showing by showing the specific PK 

properties embodied in the claims were unobvious. The trial court found that “[t]o 

succeed on its obvious[ness] claim, Sandoz must produce evidence indicating that the 

PK limitations were disclosed in the prior art or were at the very least inherent to the 

structural limitations of the prior art compositions.” Sandoz I, 500 F. Supp. 2d at 840. 

Sandoz, the court found, had not done so. Id. Moreover, the trial court found that 

“because the ’190 prior art does not disclose the [specific] PK profile of the ’718 patent, 

a person skilled in the art would not be motivated to look at the WO ’422 publication and 

interchange clarithromycin for azithromycin.” Id. at 841.

 Subsequently, the district court denied Sandoz’s motion for a stay of the 

preliminary injunction pending appellate review in light of the just issued KSR opinion. 

The court held that under KSR it was still necessary to “demonstrate the presence of all 

claim limitations in the prior art” and that Sandoz had not produced evidence indicating 

that the PK limitations were disclosed in the prior art or inherent to the structural 

limitations of the prior art compositions. Abbott Labs. v. Sandoz, 500 F. Supp. 2d 846, 

851-53 (N.D. Ill. 2007). According to the district court, it thus had not and did not need 

to reach the TSM test (or any change in the application of this test brought on by KSR). 

Id. at 853. 

 On appeal, there is no real dispute that the ’571 publication expressly discloses a 

“sustained release matrix formulation in tablet form comprising . . . erythromycin” and 

11 

2007-1300 
containing from about 5% by weight to about 29% by weight of a hydrophilic polymer, 

thus meeting all of the structural limitations of the ’718 claims. Moreover, the prior art 

clearly disclosed sustained release versions of clarithromycin and creating extended 

release formulations of erythromycin derivatives using polymers, preferably HPMC. 

And evidence shows that the desirability of the PK parameters claimed were well known 

in the art. 

 In light of this evidence, Sandoz raised a substantial question as to the 

obviousness of the ’718 patent. The district court’s decision to the contrary constituted 

an abuse of discretion. First, it was clearly error to find, as a matter of law, that since 

none of the prior art references cited by Sandoz explicitly disclosed a composition that 

had the PK limitations of the ’718 patent, it had failed to demonstrate “the presence of 

all claim limitations in the prior art,” and therefore that the ’718 invention could not be 

obvious. Contrary to the majority, this holding relies on an improperly limited view of 

what types of references can be combined to show obviousness and an impermissibly 

cramped view of the Supreme Court’s holding in KSR. There is no absolute 

requirement that each claim limitation be disclosed in a prior art reference. See, e.g., 

Takeda Chem. Indus. v. Alphapharm Pty., Ltd., 492 F.3d 1350, 1356 (Fed. Cir. 2007) 

(“We have held that structural similarity between claimed and prior art subject matter, 

proved by combining references or otherwise, where the prior art gives reason or 

motivation to make the claimed compositions, creates a prima facie case of 

obviousness.” (emphasis added)); Tegal Corp. v. Tokyo Electron Am., Inc., 257 F.3d 

1331, 1349 (Fed. Cir. 2001) (acknowledging that a claim could be obvious over a single 

prior art reference that does not disclose one of the limitations in the claim). Rather, in 

12 

2007-1300 
all cases, the touchstone of the analysis is whether the “differences between the subject 

matter sought to be patented and the prior art are such that the subject matter as a 

whole would have been obvious at the time the invention was made to a person having 

ordinary skill in the art to which said subject matter pertains.” 35 U.S.C. § 103; KSR Int’l 

Co. v. Teleflex Inc., 127 S. Ct. 1727, 1734 (2007); see also Takeda, 492 F.3d at 1357 

(explaining that “in cases involving new chemical compounds” to show a prima facie 

case of obviousness one must “identify some reason that would have led a chemist to 

modify a known compound in a particular manner” (emphasis added)). Thus, a given 

claim limitation may be obvious over the prior art even if no single reference had 

specifically disclosed that limitation. Moreover, even assuming an absolute rule that to 

be obvious a claim must be a combination of elements disclosed in the prior art, that 

standard was met here. As the Supreme Court reiterated in KSR, “inventions in most, if 

not all, instances rely upon building blocks long since uncovered, and claimed 

discoveries almost of necessity will be combinations of what, in some sense, is already 

known.” 127 S. Ct. at 1741. In other words, it is the rare invention that is not a 

combination of prior art elements.5

 And this is not one of such rare cases. Whether or 

not the prior art disclosed compounds displaying the particular PK parameters in the 

 5

 Given KSR’s broad understanding of nearly all or perhaps all inventions 

being combinations of elements in the prior art, the parties’ dispute about whether KSR

should be limited to such inventions becomes largely irrelevant. In any event, while 

KSR’s holding is directed particularly at the TSM test, it certainly appears that the Court 

intended to expound principles of obviousness jurisprudence that were generally 

applicable. And particularly relevant to the case at bar, this court has already applied 

KSR’s teachings to the question of whether new chemical compositions are obvious in 

light of the fact that chemists of ordinary skill would attempt to modify known substances 

in certain ways to “obtain compounds with improved properties.” Takeda, 492 F.3d at 

1356. Accordingly, I think the district court clearly erred in concluding that KSR was not 

relevant to the question of obviousness here. 

13 

2007-1300 
’718 patent, Sandoz did provide evidence suggesting that the PK parameters disclosed 

in the ’718 patent were absolutely known in the art and that the prior art established that 

they were desirable in an extended release formula (and indeed, that at least the AUC 

equivalence and lower Cmax were most likely essential to an extended release formula, 

at least one that would be approved by the FDA). This is sufficient to show that the 

claims might be a combination of elements previously known in the art. The prior art on 

record disclosing the PK limitations is of course further removed from the invention than, 

for example, a patent that disclosed a related drug formulation with the same PK 

limitations as the ’718 patent. But while this may well make the former less likely than 

the latter to make the ’718 patent claims obvious, there is nothing as a matter of law that 

prevents the invention from being considered an obvious combination of the prior art 

teachings contained in the current preliminary record. Cf. Aventis Pharma Deutschland 

GmbH v. Lupin, Ltd., 499 F.3d 1293, 1301 (Fed. Cir. 2007) (explaining that while it is 

necessary for there to be “some articulated reasoning with some rational underpinning 

to support the legal conclusion of obviousness . . . such reasoning need not seek out 

precise teachings directed to the specific subject matter of the challenged claim” 

(internal quotation marks omitted)).6 

Second, it is not dispositive that Abbott was not absolutely certain that using the 

formulations disclosed in the ’422 patent would create a formulation with the desired PK 

 6

 See also Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1362 (Fed. Cir. 2007) 

(“[It] is irrelevant [to the question of obviousness] that none of the anions specifically 

listed in the ’909 patent have a cyclic structure, because the motivation to make 

amlodipine besylate here is gleaned not only from the prior art as a whole rather than 

the ’909 patent alone, but also from the nature of the problems encountered with the 

amlodipine maleate tablet formulations sought to be solved by the inventors of the ’303 

patent.”). 

14 

2007-1300 
parameters. Even before KSR, this court’s “case law [was] clear that obviousness 

cannot be avoided simply by a showing of some degree of unpredictability in the art so 

long as there was a reasonable probability of success.” Pfizer, 480 F.3d at 1364. And 

as the Supreme Court stated in KSR, “[w]hen 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. If this leads to the anticipated success, it is likely the product not of 

innovation but of ordinary skill and common sense.” 127 S. Ct. at 1742 (“One of the 

ways in which a patent’s subject matter can be proved obvious is by noting that there 

existed at the time of invention a known problem for which there was an obvious 

solution encompassed by the patent claims.”). 

Third, the long standing precedent of this court and our predecessor, recently 

highlighted and relied upon in Pfizer is that “discovery of an optimum value of a 

variable” in a known process or composition is “usually obvious.” 480 F.3d at 1368 

(citing In re Peterson, 315 F.3d 1325, 1330 (Fed. Cir. 2003); In re Boesch, 617 F.2d 

272, 276 (CCPA 1980); In re Aller, 220 F.2d 454, 456 (CCPA 1955)). Accordingly, in 

Pfizer, for example, the court found that the optimization of a pharmaceutical compound 

to determine which acid salt was best was obvious, where “the prior art heavily 

suggests the particular anion used to form the salt.” Id. Similarly, here, if the PK 

parameters claimed were well known, and only routine experimentation by someone 

skilled in the art would have been necessary, in light of the HPMC formulations 

disclosed by the ’422 publication and ’571 publication, to create an ER clarithromycin15 

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HPMC formulation with the claimed PK parameters, this would be sufficient to create a 

prima facie case of obviousness. 

 Accordingly, the district court erred in concluding that the fact that the ’422 

publication and ’190 patent did not disclose the PK limitations of the asserted claims 

precluded a finding of obviousness. This legal error constitutes an abuse of discretion. 

And contrary to the holding of the district court, Sandoz has raised a “substantial 

question concerning” the obviousness of the asserted claims. On this basis, I would 

reverse the decision of the district court. 

III. 

Sandoz also argues that several acts by Abbott during the prosecution of its 

patent application constitute inequitable conduct and, thus, show that the district court 

abused its discretion in not rejecting the motion for a preliminary injunction based on the 

likelihood that the patents would be declared unenforceable. 

The Patent Examiner initially rejected the claims of the ’718 application and 

requested that Abbott show that one of its prior art compositions of clarithromycin, which 

was described as an immediate release pediatric suspension formula, did not have the 

same extended release properties as Abbott’s claimed invention. In response, Abbott 

submitted a declaration by Linda Gustavson stating that the Cmax of the ER 

clarithromycin “is statistically significantly lower than that for IR formulation given twice 

daily.” J.A. 10015. Abbott now admits that this statement was incorrect—that the data 

Gustavson relied on did not show a statistically significant lowering of the Cmax—but 

only a non-statistically significant apparent lowering, and Gustavson herself admits that 

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she never performed any statistical analysis of the data and would not have known how 

to do it. 

The district court found that the concededly false statement was immaterial since 

all the Examiner asked was whether the two products have the same PK properties. 

According to the district court, “[g]iven the accuracy of the ultimate conclusion—that the 

extended release formulation was indeed different from the immediate release 

suspension formulation, Gustavson’s declaration of a ‘statistically significantly lower’ 

Cmax is immaterial despite the fact that it satisfies the definition of ‘material’ provided by 

37 C.F.R. § 1.56(b).” Sandoz I, 500 F. Supp. 2d at 822. The district court reasoned 

that despite meeting the standard for materiality of § 1.56(b) a reasonable examiner 

would not have considered the statement important. Moreover, the district court 

emphasized that no claim of the ’718 patent requires the extended release formulation 

to have a statistically significant lower Cmax than the immediate release formulation. 

The Gustavson statement was material, or more to the point, there is substantial 

likelihood that Sandoz would be able to so establish at the merits stage. First, contrary 

to the erroneous conclusion of the district court, we have held that “all misstatements or 

admissions that satisfy [37 C.F.R. § 1.56(b)] are considered material.” Monsanto Co. v. 

Bayer Bioscience N.V., 514 F.3d 1229, 1237 n.11 (Fed. Cir. 2008). In addition, while no 

claim element in the ’718 patent specifically states that the Cmax value must be 

statistically significantly lower, it does require Cmax values that are “lower” than in the 

immediate release formulation. Despite the fact that in other claim elements Abbott 

uses the term “statistically significantly lower,” it is far from clear that one can establish 

that the Cmax value is lower if the data does not show a statistically significant difference, 

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which by definition, as ordinarily understood, means that the data cannot conclusively 

establish that there is a real difference. This court previously recognized that “there is 

little in the [’718] patent itself that establishes the differences (if any) between 

parameters that are simply ‘lower’ rather than ‘statistically significantly lower.’” Andrx, 

452 F.3d at 1339 n.4. Moreover, regardless of the claim construction, it would be 

important (if not dispositive) to a reasonable examiner to know that Abbott did not have 

data which showed a lower Cmax to any statistical significance over the structurally 

similar prior art suspension formulas in deciding whether to allow the claim over this 

prior art. 

On this basis alone, the district court abused its discretion because it created 

such a high bar for materiality that in essence no statement or withholding of information 

would be material if it would not change the ultimate outcome of allowing the patent. 

This is inconsistent with our precedent. See, e.g., Hoffmann-La Roche, Inc. v. Promega 

Corp., 323 F.3d 1354, 1368 (Fed. Cir. 2003) (“The fact that the examiner did not have to 

rely on the purity representations in issuing the patent is not inconsistent with a finding 

of materiality. Although the inventors’ statements regarding purity were not the principal 

focus of the office action response, they were clearly an important aspect of it. Under 

the circumstances, a reasonable examiner would have wanted to know that the 

patentability argument based on purity was unsupported by the experimental results 

cited by the inventors.” (internal citation omitted)); Merck & Co. v. Danbury Pharmacal, 

Inc., 873 F.2d 1418, 1421 (Fed. Cir. 1989) (rejecting a “but for” standard of materiality). 

In addition, while the district court did not reach the issue of intent, the fact that 

Gustavson submitted a declaration to the PTO in which she claimed to have found a 

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statistically significant lowering of Cmax despite now admitting to never having done any 

statistical analysis is sufficient circumstantial evidence of intent to raise a substantial 

question of inequitable conduct, if not necessarily to prove inequitable conduct on the 

merits. 

The district court also found that the failure by Abbott to disclose a new study7

was immaterial because Abbott simply “chose to rely on the results of several other 

studies that showed differing mean DFL values” and the totality of the evidence 

demonstrates that the prior art formulation did not have the “same broad PK properties 

as those claimed for the ER formulation.” Sandoz I, 500 F. Supp. 2d at 824. The test is 

not whether the Examiner would have refused to allow the patent to issue without the 

information, but just whether it would have been “important” to her consideration. Here 

the extent the PK parameters of the ER formulation differed from the clarithromycin 

formulations in the prior art was the primary focus of the examiner’s concerns regarding 

patentability, and Abbott’s ability to establish sufficient differences was the basis for 

allowing the claims. It was not for Abbott to decide unilaterally that it preferred the 

results of one set of studies that supported patentability and therefore could ignore 

studies reaching the opposite result. Cf. Paragon Podiatry Lab. v. KLM Labs., 984 F.2d 

 7

 The written description of the ’718 patent states that “The mean DFL 

values for the controlled release formulation [another Abbott prior art reference 

disclosing a clarithromycin formulation] and for the IR are substantially equal in 

value. . . .” ’718 Patent, col.11 ll.18-19. And it explains that lower DFL values for the 

ER formulation of the ’718 patent show that it provides “less variable clarithromycin 

concentrations throughout the day than the IR and the sustained release compositions.” 

’718 Patent, col.11 ll.25-26. These statements were correct based on three studies that 

had been done prior to filing the application. However, a new study W98-268, which 

Gustavson had knowledge of, and which issued while the application was pending, 

found that there was a statistically significant lower DFL value for the sustained release 

formulas than the IR formulas. Gustavson, however, failed to disclose the results of this 

new study. 

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1182, 1193 (Fed. Cir. 1993) (finding inequitable conduct for failure to disclose sales 

data and noting that “where the decision of whether or not to disclose sales before the 

critical date is close, the case should be resolved by disclosure, not by the applicant's 

unilateral decision.”). 

 Accordingly, I would also vacate the preliminary injunction based on the 

allegations of inequitable conduct. The evidence raises a substantial question of 

unenforceability that makes the patents vulnerable to being found unenforceable at trial. 

Thus, the district court erred when it concluded that Abbott had shown it would likely 

succeed on the merits. 

Because of the reasons stated above, I would reverse the district court on the 

basis that there are substantial questions of both validity and enforceability of the ’718 

patent preventing a finding of likelihood of success on the merits. 

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