Source: https://schottpc.com/category/preliminary-injunctions
Timestamp: 2019-04-23 22:15:17+00:00

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preliminary injunctions | Schott, P.C.
A patent owner’s right to exclude others from making, using, or selling an invention is distinct from its right to stop others from violating its patent rights. Because of this distinction, the patent owner must establish its right to a permanent injunction by meeting a four-factor test set forth by the Supreme Court in its 2006 eBay Inc. v. MercExchange, L.L.C. decision.
A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
The eBay decision came as a surprise to some, as the Federal Circuit had stated that “the general rule is that a permanent injunction will issue once infringement and validity have been adjudged.” Following this perceived general rule, patentees had confidently threatened injunctions against potential infringers. Removal of injunctions from what some thought of as a statutory requirement has given rise to several Federal Circuit cases that cast further light on applications for injunction.
The Federal Circuit reviewed the eBay so-called four-factor test and found that it was not actually a factor test, but instead a four-element test, requiring the presence of all elements. The court acknowledged that injunctions are “one of the most essential sticks in the bundle of rights that are commonly characterized as property” but further stated that “the moving party must satisfy the court that relief is needed.” In making this distinction, the Federal Circuit found that Nichia had failed to prove eBay element (1) showing irreparable harm.
Lack of meaningful competition between the parties. The Federal Circuit found that (a) Nichia was an LED supplier and packager, and Everlight was merely a packager, and (b) although there was some competition, it was not meaningful (“a proverbial drop in the bucket”).
Reviewing these factors, the court found that Nichia could not show irreparable harm and having failed to meet one of the four elements of the eBay test, the district court’s denial of the injunction against Everlight was proper.
Mylan Institutional LLC et al. v. Aurobindo Pharma Ltd. et al.
A plaintiff seeking a preliminary injunction must establish that it is likely to succeed on the merits, that it is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in its favor, and that an injunction is in the public interest. On appeal, Aurobindo challenged three district court findings related to a preliminary injunction against: 1) the likelihood that Aurobindo infringed; 2) whether Aurobindo failed to raise a substantial question of validity; and 3) whether there was irreparable harm to Mylan.
Mylan asserted three patents against Aurobindo, two claiming a process for making a compound, and one claiming the actual compound. Aurobindo did not appeal the preliminary injunction with respect to the infringement analysis of the compound claim patent, and thus it only considered the process claiming patents in determining the likelihood of infringement.
To establish a likelihood of success on the merits for a patent infringement claim, a patentee must show that it will likely prove infringement of the asserted claims and that its infringement claim will likely withstand the alleged infringer’s challenges to patent validity and enforceability. A preliminary injunction should not issue if the accused infringer “raises a substantial question concerning either infringement or validity.
Despite a lack of precedence, the district court applied the function-way-result (FWR) test in its doctrine of equivalents analysis for the process claims, looking to whether Aurobindo’s product performs “substantially the same function in substantially the same way to obtain the same result” over its alternative doctrine of equivalents insubstantial differences test (whether the accused product or process is substantially different from what is patented).
The court concluded that the district court abused its discretion in granting the preliminary injunction of the process patents because of this flaw in its infringement analysis and suggested that the district court consider the substantial differences infringement test on remand. This infringement holding did not affect the single remaining patent with the compound claim—for that, Aurobindo relied on an invalidity argument.
A compound N-[4-[[4-(diethylamino)phenyl] (2,5-disulfophenyl)methylene]-2,5-cyclohexadien-1-ylidene]-N-ethylethanaminium, sodium salt having a purity of at least 99.0% by HPLC.
Aurobindo argued that prior art rendered the claims invalid as anticipated and obvious, and also that “by HPLC” was indefinite.
Based on this, the Federal Circuit upheld the district court’s conclusions regarding the ‘050 compound claim as not invalid.
The Federal Circuit finally turned to whether the district court erred in finding a likelihood that Mylan would sustain “substantial and immediate irreparable injury” without preliminary relief. Aurobindo argued that the district court erred in finding a causal nexus between Mylan’s alleged harm and the patented features. Aurobindo contends that the patented features are the use of silver oxide to oxidize isoleuco acid, and that the ISB employed in the finished drug product is at least 99.0% pure by HPLC. Aurobindo argued that there was no evidence that the consumer demand for Mylan’s product arises from the fact that the ISB it contained was synthesized using silver oxide or that the ISB is at least 99.0% pure.
The Federal Circuit, however, did not find clear error in the district court’s findings that Aurobindo’s causal nexus argument was flawed because it improperly focused on a subset of the relevant customers (physicians) and ignored all others (active pharmaceutical ingredient (“API”) suppliers, pharma companies, hospitals, the FDA, etc.). Mylan maintained that its harm was directly caused by Aurobindo’s infringement because ample evidence showed that Aurobindo gained a competitive advantage by copying its patented process.
With one patent surviving the noninfringement argument, all patents not found invalid, and with evidence of irreparable harm, the Federal Circuit upheld the preliminary injunction, with respect at least to the compound-claiming ‘050 patent.
Genband US LLC v. Metaswitch Networks Corp.
The Federal Circuit found that the district court relied on a too stringent interpretation of the causal-nexus requirement “[b]ut we cannot be sure that the district court, in demanding such proof, used the standard for causal nexus now established to be the governing standard.” The standard the district court relied upon was the “drive demand test” that requires proof of a relationship between a claim feature and sales of an accused product.
The challenge of the “drive demand” test is that it may be open to different interpretations, “some stricter, some more flexible, at least in situations where the product at issue has multiple purchasers and multiple features that different purchasers might assign different weights in their purchasing decisions.” The “drive demand” formulation could require that the infringing feature be “the driver” of decisions by consumers treated collectively as a kind of unit, even requiring proof that no or almost no buyers would buy the product but for the infringing feature. Or the infringing feature may be “a driver” of decisions by a substantial number of individual consumer decision-makers considering multiple features.
The Federal Circuit clarified that the correct standard is based on “‘a driver’ as opposed to ‘the driver,’ as applied in the multi-consumer, multi-feature context.” Rather than show that a patented feature is the exclusive reason for consumer demand, a patentee must show some connection between the patented feature and demand for the infringer’s accused products. There might be a variety of ways to make this required showing, for example, with evidence that a patented feature is one of several features that cause consumers to make their purchasing decisions. It might also be shown with evidence that the inclusion of a patented feature makes a product significantly more desirable. Conversely, it might be shown with evidence that the absence of a patented feature would make a product significantly less desirable.
The district court, however, referred to the standards only by stating that Genband argued for them and the Federal Circuit saw “no sufficient basis for inferring that the district court actually used those standards, rather than an unduly stringent test, to interpret and apply the ‘drive demand’ standard.” Given this unclear reasoning, the Federal Circuit vacated the permanent injunction and remanded the case for further consideration.
 547 U.S. 388, 391 (2006).
 MercExchange, LLC v. eBay Inc.,401 F. 3d 1323, 1338 (Fed. Cir. 2005).
 855 F.3d 1328 (Fed. Cir. 2017).
Mylan Institutional LLC v. Aurobindo Pharma Ltd., 857 F.3d 858 (Fed. Cir. 2017).
 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, (2008).
 Mylan at 861–62 and U.S. Patent 8,969,616.
 Sciele Pharma, Inc. v. Lupin Ltd., 684 F.3d 1253, 1259 (Fed. Cir. 2012) (citing Amazon.com, 239 F.3d at 1350).
 Jeneric/Pentron, Inc. v. Dillon Co., Inc., 205 F.3d 1377, 1384 (Fed. Cir. 2000).
 Graver Tank & Mfg. Co. v. Linde Air Prod. Co., 339 U.S. 605, 608-609 (1950).
 861 F.3d 1378, 1379 (Fed. Cir. 2017).
 Apple, Inc. v. Samsung Electronics Co. (Apple II), 695 F.3d 1370, 1374-5 (Fed. Cir. 2012).
 Apple, Inc. v. Samsung Electronics Co. (Apple III), 735 F.3d 1352, 1364 (Fed. Cir. 2013) and Apple, Inc. v. Samsung Electronics Co. (Apple IV), 809 F.3d 633, 641–42 (Fed. Cir. 2015) respectively.

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