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United States Court of Appeals for the Federal Circuit
06-1613
SANOFI-SYNTHELABO, SANOFI-SYNTHELABO, INC.,
and BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING
PARTNERSHIP,
Plaintiffs-Appellees,
v.
APOTEX, INC. and APOTEX CORP.,
Defendants-Appellants.
Evan R. Chesler, Cravath, Swaine & Moore, LLP, of New York, New York,
argued for plaintiffs-appellees. With him on the brief were Richard J. Stark and David
Greenwald. Of counsel on the brief were Robert L. Baechtold, John D. Murnane, and
William E. Solander, Fitzpatrick, Cella, Harper & Scinto, of New York, New York.
Bruce J. Chasan, Caesar, Rivise, Bernstein, Cohen & Pokotilow, Ltd., of
Philadelphia, Pennsylvania, argued for defendants-appellants. With him on the brief
were Robert S. Silver, Manny D. Pokotilow, Mona Gupta, and Lynn M. Terrebonne.
Anthony F. Lo Cicero, Amster, Rothstein & Ebenstein LLP, of New York, New
York, for amicus curiae, Generic Pharmaceutical Association. With him on the brief was
Richard S. Mandaro.
David H. Weinstein, Weinstein Kitchenoff & Asher LLC, of Philadelphia,
Pennsylvania, for amicus curiae, Medco Health Solutions, Inc.
Jeffrey Light, Patients Not Patents, Inc., of Washington, DC, for amicus curiae,
Patients Not Patents, Inc.
Appealed from: United States District Court for the Southern District of New York
Judge Sidney H. Stein
United States Court of Appeals for the Federal Circuit
06-1613
SANOFI-SYNTHELABO, SANOFI-SYNTHELABO, INC.
and BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING
PARTNERSHIP,
Plaintiffs-Appellees,
v.
APOTEX, INC. and APOTEX CORP.,
Defendants-Appellants.
_____________________
DECIDED: December 8, 2006
_____________________
Before LOURIE, Circuit Judge, CLEVENGER, Senior Circuit Judge, and BRYSON,
Circuit Judge.
LOURIE, Circuit Judge.
Apotex, Inc. and Apotex Corp. (collectively referred to as “Apotex”) appeal from
the decision of the United States District Court for the Southern District of New York
granting a preliminary injunction in favor of Sanofi-Synthelabo, Sanofi-Synthelabo, Inc.,
and Bristol-Myers Squibb (“BMS”) Sanofi Pharmaceuticals Holding Partnership
(collectively referred to as “Sanofi”). Because we conclude that the district court did not
abuse its discretion in granting the preliminary injunction, we affirm.
BACKGROUND
Sanofi markets Plavix®, a platelet aggregation inhibiting agent used to reduce
thrombotic events such as heart attacks and strokes. The active ingredient in Plavix® is
clopidogrel bisulfate, which is covered by Sanofi’s patent, U.S. Patent 4,847,265 (“the
’265 patent”), which will expire on November 17, 2011.
To understand the issues presented in this appeal, it is necessary to have a
generalized understanding of stereochemistry. Stereochemistry refers to the three-
dimensional spatial arrangement of a molecule’s constituent atoms. Molecules that
have the same chemical substituents, but different spatial arrangements, are referred to
as stereoisomers. If they contain an asymmetrical carbon atom, they exist as non-
superimposable mirror images of each other and are referred to as enantiomers.
Enantiomers are optically active because they are capable of rotating plane-polarized
light; enantiomers that rotate polarized light to the right are referred to as dextrorotatory
enantiomers, or d-enantiomers; enantiomers rotating polarized light to the left are
referred to as levorotatory enantiomers, or l-enantiomers.1 A mixture of equal amounts
of both types of enantiomers is referred to as a racemic mixture, or racemate, and it
exhibits no optical activity. Clopidogrel is the dextrorotatory enantiomer of the free base
methyl alpha-5-(4,5,6,7-tetrahydro(3,2-c)thienopyridyl)-(2-chlorophenyl) acetate, which
the parties refer to as “MATTPCA.” The active ingredient in Plavix® is the bisulfate salt
of the d-enantiomer of MATTPCA, which is specifically recited in claim 3 of the ’265
patent.
1
Other nomenclature conventions are used to signify dextrorotatory and
levorotatory enantiomers. For example, the prefixes (R-) or (+) refer to d-enantiomers,
and (L-) or (-) refer to l-enantiomers.
06-1613 2
In November 2001, Apotex filed an Abbreviated New Drug Application (“ANDA”)
pursuant to the Hatch-Waxman Act seeking U.S. Food and Drug Administration (“FDA”)
approval to manufacture and sell a generic version of clopidogrel bisulfate. Apotex filed
a Paragraph IV certification with its ANDA, pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV),
asserting that the ’265 patent is invalid. In response, Sanofi sued Apotex on March 21,
2002, claiming that the filing of the ANDA infringed the ’265 patent. Apotex
counterclaimed, asserting that the patent is invalid and unenforceable. A thirty-month
stay of FDA approval for the ANDA was triggered when the suit was filed in the district
court, pursuant to 21 U.S.C. § 355(j)(5)(B)(iii). The stay expired May 17, 2005, and on
January 20, 2006, the FDA approved the ANDA.
Several days before the ANDA was approved, Sanofi and Apotex began
settlement negotiations in an effort to resolve the litigation. On March 17, 2006, the
parties reached a first settlement agreement that was subject to the approval of the
Federal Trade Commission and a consortium of state attorneys general pursuant to an
order issued in another litigation involving BMS. In May 2006, the state attorneys
general notified the parties that they would not approve the settlement. The parties
negotiated a second agreement (“the May agreement”). The May agreement included
provisions specifying, inter alia, actions that could be taken by the parties in the event
that the settlement failed to receive regulatory approval. In July 2006, the state
attorneys general again informed the parties that they would not approve the settlement.
Apotex then declared “regulatory denial” on July 31, 2006, as permitted under the
settlement agreement, which meant, inter alia, “a denial of approval by either the FTC or
06-1613 3
a state attorney general as to which neither party seeks further review.” Under the
agreement, litigation would resume in the event of “regulatory denial.”
Pursuant to the aforementioned agreement, Apotex launched its generic
clopidogrel bisulfate product on August 8, 2006. In accordance with the provisions in
the settlement agreement, Sanofi notified Apotex of its intent to move for a preliminary
injunction in the time frame permitted by the agreement, viz., five business days after
the generic launch.2 Sanofi filed its motion for a preliminary injunction on August 15,
2006, and requested a recall of Apotex’s products that were already distributed. After a
two-day evidentiary hearing, the district court granted the motion for injunctive relief on
August 31, 2006, but denied the request for recall. During the period between the
generic launch and the entry of the preliminary injunction, Apotex shipped a six-month
supply of its product to distributors in the United States.
In reaching its decision, the district court applied the established four-factor test
for preliminary injunctive relief, and found that the factors weighed in favor of an
injunction. Regarding the likelihood of success on the merits, the court noted that
Apotex conceded that its accused products infringe claim 3 of the ’265 patent. The
court then found that Apotex failed to establish a likelihood of proving invalidity at trial—
rejecting its anticipation, obviousness, and obviousness-type double patenting invalidity
defenses. The court also determined that Apotex failed to raise a substantial question
as to whether the ’265 patent is unenforceable due to inequitable conduct. Additionally,
the court found that the remaining three factors of the test favored issuance of a
2
Sanofi moved for a temporary restraining order (“TRO”) prior to that date, but
the request was denied in light of Sanofi’s agreement not to seek a TRO before the
expiration of the five-day period. Sanofi-Synthelabo v. Apotex, No. 02-2255, slip op. at
10 (S.D.N.Y. Aug. 31, 2006).
06-1613 4
preliminary injunction. As for Apotex’s other defenses, the court concluded that the
doctrine of laches was inapplicable, and it rejected Apotex’s unclean hands defense.
The court set bond in the amount of $400 million. Trial is scheduled to commence on
January 22, 2007.
Apotex moved for a stay of the injunction, which we denied on September 21,
2006, and it filed its appeal from the district court’s grant of the preliminary injunction.
An expedited briefing schedule was set, and oral argument was heard on October 31,
2006. We have jurisdiction pursuant to 28 U.S.C. § 1292(c) in view of §§ 1292(a) and
1295(a)(1).
DISCUSSION
A decision to grant or deny a preliminary injunction pursuant to 35 U.S.C. § 283
is within the sound discretion of the district court, and we review such a decision for an
abuse of discretion. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343,
1350 (Fed. Cir. 2001). Thus, a decision granting a preliminary injunction will be
overturned on appeal only if it is established “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.” Genentech, Inc. v. Novo Nordisk A/S, 108
F.3d 1361, 1364 (Fed. Cir. 1997). To the extent the court’s decision is based upon an
issue of law, we review that issue de novo. Tate Access Floors, Inc. v. Interface
Architectural Res., Inc., 279 F.3d 1357, 1364 (Fed. Cir. 2002).
Sanofi, as the moving party, may be entitled to a preliminary injunction if it
establishes four factors: “(1) a reasonable likelihood of its success on the merits; (2)
irreparable harm if an injunction is not granted; (3) a balance of hardships tipping in its
06-1613 5
favor; and (4) the injunction’s . . . impact on the public interest.” Amazon.com, 239 F.3d
at 1350.
A. Likelihood of Success on the Merits
In order to satisfy the first element of the test, Sanofi must demonstrate that, “in
light of the presumptions and burdens that will inhere at trial on the merits,”
Amazon.com, 239 F.3d at 1350, Sanofi will likely prove that Apotex’s product infringes
the ’265 patent and that it will withstand Apotex’s challenges to the validity and
enforceability of the ’265 patent. Because Apotex stipulated to infringement, only the
second inquiry is at issue in this case. Thus, the first element was properly found
satisfied if Apotex failed to raise a “substantial question” with regard to the validity or
enforceability of the ’265 patent—or, if it succeeded in doing so, Sanofi demonstrated
that those defenses “lack substantial merit.” Genentech, 108 F.3d at 1364. On appeal,
Apotex challenges the district court’s rulings with respect to anticipation, obviousness,
obviousness-type double patenting, and enforceability.
1. Validity of the ’265 Patent
a. Anticipation
We first consider whether the district court clearly erred in its determination that
Sanofi will likely withstand Apotex’s challenge to the validity of the ’265 patent based on
anticipation. Apotex asserted that U.S. Patent 4,529,596 (“the ’596 patent”) anticipates
claim 3 of the ’265 patent. The district court rejected Apotex’s argument on two
grounds. First, the court found that the ’596 patent does not describe clopidogrel
bisulfate. Second, the court determined that the ’596 patent does not enable a person
of ordinary skill in the art to make clopidogrel bisulfate without undue experimentation.
06-1613 6
On appeal, Apotex argues that the district court erred by improperly focusing its
anticipation analysis on claim 1 of the ’596 patent, which claims a broad genus of
compounds, and by failing to consider claim 2, which claims the free base of
clopidogrel, MATTPCA. According to Apotex, claim 2 describes clopidogrel bisulfate
and thus anticipates claim 3 of the ’265 patent.3 Apotex advances two main arguments
in support of this position. First, Apotex argues that a person of ordinary skill in the art
would interpret claim 2 of the ’596 patent in light of the specification as not only
disclosing the racemate free base, but also the dextrorotatory and levorotatory
enantiomers, as well as pharmaceutically acceptable salts, including the bisulfate.
Second, Apotex contends that the district court erred by failing to address controlling
precedent, specifically In re Petering, 301 F.2d 676 (C.C.P.A. 1962), and In re
Schaumann, 572 F.2d 312 (C.C.P.A. 1978), which relate to genus/species anticipation.
According to Apotex, those cases establish that the genus disclosed in claim 2 of the
’596 patent is a small class to which clopidogrel bisulfate belongs, which describes all
members of that class.
Sanofi responds that the district court correctly concluded that Apotex’s
anticipation challenge lacks substantial merit. Sanofi contends that Apotex engages in
an impermissible, hindsight-driven, “dissection and recombination” analysis of the ’596
specification in arguing that a person of ordinary skill in the art would interpret the claim,
which only recites the racemate free base, as disclosing the bisulfate salt of the d-
3
In this appeal, we are faced with the unusual situation of an anticipating
disclosure being argued to be a claim, rather than other descriptive material in a
specification. No doubt appellants argued what they considered to be their strongest
case.
06-1613 7
enantiomer. Sanofi further argues that the district court did not abuse its discretion in
not addressing Petering because it does not apply in this case.
As a preliminary matter, we note that the ’596 patent was before the Examiner
during prosecution, which makes Apotex’s burden of proving invalidity at trial “especially
difficult.” Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1348 (Fed. Cir. 2004). Thus,
in light of the deferential standard we apply in reviewing grants or denials of preliminary
injunctions, and mindful that “a patent is presumed valid, and this presumption exists at
every stage of the litigation,” Canon Computer Sys., Inc. v. Nu-Kote Int’l., Inc., 134 F.3d
1085, 1088 (Fed. Cir. 1998), we conclude that the district court did not clearly err in
finding that Apotex’s anticipation defense lacks substantial merit.4
A determination that a patent is invalid as being anticipated under 35 U.S.C.
§ 102 requires a finding that “each and every limitation is found either expressly or
inherently in a single prior art reference.” Celeritas Techs. Ltd. v. Rockwell Int'l Corp.,
150 F.3d 1354, 1361 (Fed. Cir. 1998). Claim 3 of the ’265 patent reads as follows:
3. Hydrogen sulfate of the dextro-rotatory isomer of methyl
alpha-5 (4,5,6,7-tetrahydro (3,2-c) thienopyridyl) (2-
chlorophenyl) - acetate substantially separated from the
levo-rotatory isomer.
’265 patent col.12 ll.37-40. Thus, the claim consists of the following key limitations: 1)
the d-enantiomer; 2) of the compound MATTPCA; 3) the bisulfate salt; and 4)
substantial separation from the levorotatory isomer.
4
In its moving brief and as counsel clarified at oral argument, Apotex’s
anticipation argument on appeal is solely premised on claim 2 of the ’596 patent. Thus,
we limit our discussion to the narrow issue whether there is substantial merit to Apotex’s
assertion that claim 3 of the ’265 patent is unpatentable in view of claim 2 of the ’596
patent.
06-1613 8
Claim 2 of the ’596 patent, in contrast, reads as follows:
2. Methyl α-(4,5,6,7-tetrahydro-thieno(3,2-c)-5-pyridyl)-
o.chlorophenyl-acetate.5
’596 patent, col.13, ll.20-21. Thus, the plain language of claim 2 only recites the free
base, MATTPCA, and does not expressly describe the dextrorotatory or levorotatory
enantiomers or any salt. Because claim 2 fails to describe each and every limitation of
claim 3 on its face, claim 2 does not anticipate claim 3.
Apotex argues that the two missing limitations, viz., the d-enantiomer and the
bisulfate salt, are inherently disclosed in the claim. With regard to the bisulfate salt
limitation, Apotex seeks to import into the scope of claim 2 a statement in the
specification that the invention includes “addition salts with pharmaceutically acceptable
mineral or organic acids.” Id., col.1 ll.42-43. Apotex further argues that the ’596 patent
discloses a preference for bisulfate salt.
The district court, however, considered that argument and rejected it. After
careful consideration of the record before it, the court found that a person of ordinary
skill in the art would not be led to the bisulfate salt for several reasons. Based on the
testimony of Sanofi’s expert, Dr. Byrn, the court noted that a chemist would actually be
dissuaded from preparing the bisulfate salt in light of Example 1, which describes the
hydrochloride salt of the racemate, because a chemist would believe that the
hydrochloride, as opposed to the bisulfate, is the preferred salt for clopidogrel. The
5
The parties do not dispute that “methyl α-(4,5,6,7-tetrahydro-thieno(3,2-c)-5-
pyridyl)-o.chlorophenyl-acetate” recited in claim 2 of the ’596 patent is the same
compound as “methyl alpha-5 (4,5,6,7-tetrahydro (3,2-c) thienopyridyl) (2-chlorophenyl)-
acetate” recited in claim 3 of the ’265 patent. Both names, although slightly different in
form, refer to the same free base, MATTPCA. The punctuation of the names is as it
appears in the particular patents.
06-1613 9
court also credited Dr. Byrn’s additional testimony that salt formation with a new
compound is an “unpredictable exercise.” In addition, the court noted that a chemist
theoretically had at least fifty different pharmaceutically acceptable salts from which he
could have chosen for formulation. Based on that evidence, the court found that
“disclosing bisulfate in the ’596 patent was insufficient to disclose a single enantiomer of
a compound as a bisulfate salt.” Sanofi-Synthelabo, slip op. at 26. Because we find
that the district court did not clearly err in its fact-finding as to this issue, we reject
Apotex’s argument that claim 2 of the ’596 patent inherently discloses the bisulfate salt.6
Apotex argues that the holding in In re May, 574 F.2d 1082 (C.C.P.A 1978),
specifically with respect to claim 6—a claim that the Court of Customs and Patent
Appeals found anticipated by prior art—mandates a finding of anticipation here. That
case, however, is distinguishable from this case. In May, our predecessor court held
that claim 6, which claimed the hydrochloride salt of a class of compounds, or genus,
was anticipated by a prior art patent that expressly disclosed the hydrobromide salt of a
species included within the genus. The appellant argued that the prior art patent did not
anticipate the hydrochloride because it did not “specifically describe” it. The court
disagreed in light of a statement in the specification that the compounds of the genus
were “preferably administered in the form of their salts, ‘the hydrobromide and
hydrochloride salts being especially suitable.’” Id. at 1090 (emphases added). The
court found that that statement “coupled with the express disclosure of the
6
Apotex cites In re Adamson, 275 F.2d 952, 954 (C.C.P.A. 1960), for the
proposition that the disclosure of a racemic compound inherently discloses its
enantiomers. Thus, Apotex argues that the d-enantiomer of MATTPCA is inherently
disclosed by claim 2. Because we conclude that the district court did not err in finding
that the bisulfate salt limitation is not disclosed in the claim, and thus cannot anticipate
claim 3, we need not address this contention.
06-1613 10
hydrobromide salt of the [species compound]” constituted an anticipation of claim 6. Id.
Here, however, there is no clear statement in the specification that the bisulfate salt is
“especially suitable” for administering compounds of the genus including clopidogrel.
On the contrary, as discussed above, the specification of the ’596 patent discloses a
number of potentially acceptable salts and discloses the racemate of clopidogrel in
Example 1 only as a hydrochloride salt. Thus, we find the facts in the present case
distinguishable from those in May.
Further, we are not persuaded by Apotex’s argument that the holdings of In re
Petering and In re Schaumann warrant reversal of the district court’s decision. In
Petering, the Court of Customs and Patent Appeals upheld the board’s § 102(b)
anticipation rejection of a claim that covered specific chemical compounds in light of a
prior art patent that disclosed a class of compounds of which those specific compounds
were members. 301 F.2d at 682. In reaching its conclusion, the court noted that, while
the generic formula in Petering was quite broad, “specific preferences” were described.
Based on those disclosed preferences, the court found that the narrowed generic
formula essentially disclosed a limited class of approximately twenty compounds. Each
was held to have been disclosed by the genus.
Similarly, in Schaumann, the Court of Customs and Patent Appeals affirmed the
rejection of claims that covered a specific compound and certain compatible salts in
light of a prior art patent that disclosed a generic formula with a single variable. The
court found that the prior art patent disclosed a limited class of compounds based on a
disclosed preference for that variable substituent. The court concluded that the
06-1613 11
compound in the rejected claim fell within the scope of that limited class of compounds,
and thus was anticipated by the prior art patent.
Here, however, we do not find that the ’596 patent discloses a “pattern of
preferences” akin to the disclosures in Petering and Schaumann that would limit the
generic formula of MATTPCA in claim 2 of the ’596 patent to a narrow class of
compounds that includes clopidogrel bisulfate. The principal, obvious distinction is that
the generic formula of claim 2 does not include a salt. On this basis alone, we find that
clopidogrel bisulfate is not a species of any genus comprised by claim 2 of the ’596
patent.
In addition, our predecessor court found a “pattern of preferences” in Petering
and Schaumann. In this case, however, there is no such clear “pattern of preferences”
that serves to narrow the genus in claim 2 to a narrow class that includes clopidogrel
bisulfate. Even had claim 2 included salts generically, there was no expressed
preference for clopidogrel bisulfate. The ’596 patent specification discloses twenty-one
exemplary compounds that are thienopyridines—not just MATTPCA. The examples
describe hydrochloride salts, hydrobromide salts, a sodium salt, an oxalate, and a free
base, as well as bisulfates, not showing a preference for bisulfates. Thus, we find this
case distinguishable from Petering and Schaumann on that additional basis, viz., that
the ’596 patent does not point to bisulfates as preferred salts for clopidogrel.
We therefore reject Apotex’s assertion that clopidogrel bisulfate is a species of
the genus in claim 2 of the ’596 patent, and that the district court clearly erred by failing
to so find. In light of this holding, we need not address the enablement issue.
Accordingly, we conclude that the district court did not clearly err in finding no
06-1613 12
substantial merit to Apotex’s assertion that claim 3 of the ’265 patent is anticipated by
the ’596 patent.7
b. Obviousness
We next consider Apotex’s assertion that claim 3 of the ’265 patent is invalid as
obvious. Apotex argues that the district court erred in concluding that its obviousness
defense failed to raise a substantial question with regard to the validity of the ’265
patent. Apotex primarily argues that it would have been obvious to a person of ordinary
skill in the art to prepare clopidogrel bisulfate based on the disclosure of the ’596 patent.
Additionally, Apotex asserts that the “unexpected results” upon which Sanofi relied to
establish the nonobviousness of clopidogrel bisulfate were not “unexpected” to a person
of ordinary skill in the art. Moreover, Apotex contends that the court erred by failing to
cite Adamson in its obviousness analysis—a case that, according to Apotex, stands for
the proposition that enantiomers are prima facie obvious over disclosures of their
racemates.
Sanofi responds that the district court correctly concluded that it would not have
been obvious to prepare clopidogrel bisulfate in view of the ’596 patent, particularly in
light of the effort Sanofi actually had to expend in developing clopidogrel bisulfate,
including the four years and millions of dollars that were allocated to the development of
the racemate before efforts were redirected toward isolating the d-enantiomer. Sanofi
7
To the extent that Apotex argues that portions of the ’596 patent other than
claim 2 anticipate clopidogrel bisulfate, we reject that argument. Although several of the
examples in the ’596 patent are salts of esters, the specification does not identify as a
class esters in salt form. This case is therefore unlike Petering, in which the prior art
reference named a class, examples of which were then taken as expressing preferred
species of that class. Similarly, because no class-wide salt preferences are disclosed,
May does not support a finding of anticipation.
06-1613 13
further argues that any prima facie obviousness resulting from the disclosure of the
racemate in the prior art was rebutted by the unexpected properties of clopidogrel
bisulfate—specifically, high pharmacological activity and low toxicity—two properties
that are not necessarily generally associated with one enantiomer.
We agree with Sanofi that the court did not clearly err in finding that Apotex failed
to raise a substantial question in its obviousness defense. First, we reject Apotex’s
contention that it would have been obvious to a person of ordinary skill in the art to
prepare clopidogrel bisulfate based on the disclosures of the ’596 patent. The district
court rejected that position after considering extensive argument, testimony, and
references presented by both parties. In reaching that determination, the district court
noted that there was “nothing obvious about arriving at clopidogrel bisulfate by
separating the enantiomers of [MATTPCA] and preparing the dextrorotatory
[enantiomer] as a bisulfate salt.” Sanofi-Synthelabo, slip op. at 31-32. The court
determined that nothing existed in the prior art that would make pursuing the
enantiomer of MATTPCA an obvious choice, particularly in light of the unpredictability of
the pharmaceutical properties of the enantiomers and the potential for enantiomers to
racemize in the body.
The court also found that the extensive time and money Sanofi spent developing
the racemate before redirecting its efforts toward the enantiomer, and the
unpredictability of salt formation, were indicators of nonobviousness. The court credited
the testimony of Apotex’s own expert, Dr. McClelland, who agreed that salt formation
was an unpredictable exercise that would require a chemist “to engage in
experimentation to determine which salt would in fact be suitable.” Id. at 33. The court
06-1613 14
also noted that a named inventor, Dr. Badorc, tested twenty different salts before
discovering that bisulfate had the most desirable properties. Thus, the court found that
it would not have been obvious to a person of ordinary skill in the art to prepare
clopidogrel bisulfate from reading the ’596 patent in light of the extensive
experimentation that was required to arrive at that particular compound. We discern no
clear error with respect to those factual determinations or the legal conclusion.
We also reject Apotex’s assertion that a person of ordinary skill in the art would
have been led to the active enantiomer of MATTPCA after reading the ’596 patent.
Apotex merely asserts that one would have been motivated “because the patent directs
[a person of ordinary skill in the art] to enantiomers and pharmaceutical salts.” We have
noted that it is insufficient to merely identify each element in the prior art to establish
unpatentability of the combined subject matter as a whole. Abbott Labs. v. Andrx
Pharm., Inc., 452 F.3d 1331, 1336 (Fed. Cir. 2006). Instead, “a party alleging invalidity
due to obviousness must articulate the reasons one of ordinary skill in the art would
have been motivated to select the references and to combine them to render the
claimed invention obvious.” Id. Apotex’s conclusory assertion that the ’596 patent
directs a chemist to the enantiomers and salts is insufficient to satisfy this requirement.
Certainly nothing directed a chemist to the particular enantiomer and salt, clopidogrel
bisulfate, which is the limited subject matter of claim 3.
Second, while Apotex disagrees with the district court’s assessment of the
evidence relating to the “unexpected results” obtained with clopidogrel bisulfate, we
review that assessment, which is based on factual findings made by the district court,
06-1613 15
for clear error. Based on the record before us, we find no basis to conclude that the
district court clearly erred in its evaluation of that evidence.
Finally, we are unpersuaded by Apotex’s argument that the court clearly erred by
failing to consider Adamson in its obviousness analysis. In Adamson, the CCPA
affirmed the Board’s rejection of claims that covered the l-enantiomer of a specific
compound and its addition salts as obvious in view of certain prior art references. One
prior art reference disclosed “synthetically produced compounds of the same formula
claimed,” but did not state whether the compounds were racemic mixtures or
enantiomers. Adamson, 275 F.2d at 953. Another prior art reference, an organic
chemistry textbook, taught, inter alia, that racemates may be separated into their
enantiomers by various methods, and that enantiomers often possess substantially
different physiological properties in comparison to each other. Thus, the court found the
claimed l-enantiomer salt unpatentable despite the fact that that enantiomer exhibited
substantially greater spasmolytic activity than its dextrorotatory counterpart.
Apotex contends that Adamson is “no different” from the present case. We
disagree. This case is distinguishable on at least two grounds. First, it was undisputed
in Adamson that the primary reference disclosed the racemic mixtures of the isomers
and the acid addition salts. Id. at 954. Here, and most importantly, the ’596 patent
does not disclose the bisulfate salt of the d-enantiomer of MATTPCA. Resolution of a
racemic free base does not lead to a particular unnamed salt. Second, the Adamson
court observed that it would have been expected by one of skill in the art that
enantiomers would have different pharmacological activity and that the toxicity of the
racemate would lie somewhere between that of its isomers. In this case, the district
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court made factual findings that resolving the racemate was not mere routine
experimentation and that it was unexpected that the desirable activity of clopidogrel
would be found only in the d-enantiomer. We do not consider that those findings are
clearly erroneous. Accordingly, Adamson is distinguishable on that additional basis.
Based on the preliminary record before us, we thus find that the district court did
not err in determining that Apotex failed to raise a substantial question as to the validity
of claim 3 based on obviousness.
c. Obviousness-Type Double Patenting
In the district court, Apotex also challenged the validity of claim 3 of the ’265
patent based on obviousness-type double patenting. Apotex argues that the court
committed clear error in concluding that the double patenting inquiry was subsumed by
the broader obviousness inquiry, and by failing to specifically address this claim.
Apotex asserts that an obviousness inquiry is distinct from the double patenting inquiry
and should have been independently analyzed. Sanofi responds that the court correctly
concluded that nothing in the prior art, including the ’596 patent, rendered claim 3
obvious. Claim 2 of the ’596 patent especially did not render claim 3 obvious.
While Apotex asserts that the court erred by failing to separately address its
double patenting defense, Apotex fails to set forth any arguments on appeal that raise a
substantial question with respect to the validity of claim 3 based on that defense.
Accordingly, we reject Apotex’s argument that the grant of the preliminary injunction
should be reversed on that basis.
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2. Enforceability of the ’265 Patent
Apotex argues that the district court abused its discretion in finding that Apotex
failed to raise a substantial question as to the enforceability of the ’265 patent. Apotex
identifies separate bases upon which it asserts inequitable conduct should have been
found. They include incorrect inventorship, concealment of research regarding other
compounds that were tested by Sanofi, and purported false statements concerning the
“unexpected results” of clopidogrel bisulfate and the “less well-tolerated” statement
referring to the l-enantiomer. Sanofi responds to each of Apotex’s assertions,
explaining why none of Apotex’s arguments raises a substantial question as to the ’265
patent’s enforceability.
“A patent may be rendered unenforceable for inequitable conduct if an applicant,
with intent to mislead or deceive the examiner, fails to disclose material information or
submits materially false information to the PTO during prosecution.” Digital Control, Inc.
v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006). “The party asserting
inequitable conduct must prove a threshold level of materiality and intent by clear and
convincing evidence.” Id. Further, “materiality does not presume intent, which is a
separate and essential component of inequitable conduct.” GFI, Inc. v. Franklin Corp.,
265 F.3d 1268, 1274 (Fed. Cir. 2001) (quoting Manville Sales Corp. v. Paramount Sys.,
Inc., 917 F.2d 544, 552 (Fed. Cir. 1990)).
While Apotex devotes a significant portion of its briefs to argue its inequitable
conduct contentions, virtually none of its discussion is devoted to identifying any
evidence that would support a finding of deceptive intent. Apotex’s evidence of intent is
limited to a statement in Apotex’s reply brief that the inventors’ declaration, which
06-1613 18
excluded Dr. Maffrand as an inventor, is evidence of intent. Moreover, Apotex suggests
that intent can be inferred because “Sanofi was motivated to extend its patent monopoly
beyond the ’596 patent term by patenting the enantiomer, and it needed to conjure up
‘unexpected’ results.” Such generalized allegations lack the particularity required to
meet the threshold level of deceptive intent necessary for a finding of inequitable
conduct. Thus, based on the record before us, Apotex clearly fails to raise a substantial
question as to the enforceability of the ’265 patent.8 Accordingly, we find no abuse of
discretion with regard to that issue.
B. Other Preliminary Injunction Factors
We next consider the remaining elements of the preliminary injunction test. The
district court applied a presumption of irreparable harm in light of its conclusion that
Sanofi established a likelihood of success on the merits. The court also found that
Sanofi proffered substantial evidence establishing other forms of irreparable harm,
including irreversible price erosion, loss of good will, potential lay-offs of Sanofi
employees, and the discontinuance of clinical trials that are devoted to other medical
uses for Plavix®.
Apotex argues that the district court clearly erred in concluding that Sanofi would
suffer irreparable harm in the absence of an injunction. According to Apotex, the
settlement agreement entered into by Sanofi and Apotex negated any finding of
irreparable harm. Apotex contends that Sanofi quantified in the May agreement the
measure of harm it would suffer in the event Apotex marketed a generic product—
8
Because both materiality and intent are required to establish inequitable
conduct, we need not address the materiality of the purported false statement or
omissions that Apotex describes in its briefs.
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specifically, 40%-50% of Apotex’s net sales. Additionally, Apotex challenges the court’s
findings with regard to the other kinds of irreparable harm established by Sanofi.
In response, Sanofi argues that it did not contractually surrender its right to prove
irreparable harm by entering into the May agreement. Moreover, Sanofi asserts that the
court did not clearly err by crediting the evidence it proffered establishing the additional
kinds of irreparable harm it would suffer if Apotex were allowed to continue selling its
generic product.
We conclude that the district court did not clearly err in finding that Sanofi
satisfied this factor. We are not persuaded by Apotex’s assertion that Sanofi contracted
away its right to prove irreparable harm by entering into the May agreement, which
includes a provision that capped damages for infringement by Apotex. In support of this
argument, Apotex refers to the following provision:
14. In the event of Regulatory Denial, the litigations will be
resumed as further described in paragraph 15 hereof, and:
***
(ii) If the litigation results in a judgment that the ’265 patent
is not invalid or unenforceable, Sanofi agrees that its actual
damages for any past infringement by Apotex, up to the date
on which Apotex is enjoined, will be 50% of Apotex’s net
sales of clopidogrel products if Sanofi has not launched an
authorized generic and 40% of Apotex’s net sales if Sanofi
has launched an authorized generic. Sanofi further agrees
that it will not seek increased damages under 35. U.S.C. §
284.
May agreement, ¶ 14.
We think that the above provision favors Sanofi, not Apotex. We disagree with
Apotex that by entering into that agreement, Sanofi bargained away its right to seek
preliminary injunctive relief, and thus its right to prove irreparable harm, in the event the
settlement was not approved. The above provision itself contemplates an injunction in
06-1613 20
referring to “up to the date on which Apotex is enjoined” and speaks only of damages
for past infringement. In addition, based on other provisions in the agreement, it is clear
that the parties contemplated the possibility of a preliminary injunction in the event of
regulatory denial. Paragraph 15 of the agreement, for example, sets forth the
procedural steps the parties must follow when seeking a preliminary injunction.
Moreover, merely because a patentee is able to identify a monetary amount that it
deems sufficient to avoid or end litigation does not necessarily mean that it
automatically foregoes its right to seek a preliminary injunction or that any potential
irreparable injury ceases to exist if infringement resumes. Thus, Apotex’s argument is
unsound.
Further, we reject Apotex’s assertion that the district court abused its discretion in
concluding that Sanofi would suffer irreversible price erosion if an injunction were not
entered. Based on the evidence Sanofi adduced, including the testimony of its
economics expert, Professor Hausman, and a declaration from a Sanofi executive,
Hugh O’Neill, the court found that Sanofi would suffer irreversible price erosion in light
of a complex pricing scheme that is directly affected by the presence of the generic
product in the market. In particular, the court found that since Apotex’s generic product
entered the market, Sanofi has been forced to offer discounted rates and price
concessions to third-party payors, such as health maintenance organizations, in order to
keep Plavix® on a favorable pricing tier, which governs what consumers pay for that
drug. The court found that the availability of a generic product encourages third party
payors to place Plavix® on a less favorable tier, thereby requiring consumers to pay a
higher co-pay, and perhaps deterring them from purchasing Plavix®. The court
06-1613 21
identified additional consequences of unfavorable tier placement, including a decrease
in demand for Plavix®. According to Sanofi, it is nearly impossible to restore Plavix® to
its pre-launch price since the generic product entered the market.
Apotex does not argue that price erosion is not a valid ground for finding
irreparable harm, but rather challenges the district court’s findings as to price erosion.
We conclude that the district court did not clearly err in its evaluation of the evidence
relating to price erosion. While Apotex asserts that price erosion had already occurred,
and thus an injunction is not necessary because it cannot ameliorate Sanofi’s position,
Apotex fails to identify clear errors in the district court’s analysis, and fails to proffer
evidence of its own sufficient to rebut the court’s findings. Apotex also fails to
demonstrate that the court clearly erred in its findings with respect to the additional
factors that established irreparable harm, including loss of good will, the potential
reduction in work force, and the discontinuation of clinical trials. Accordingly, we
conclude that the district court did not clearly err in finding irreparable harm.9
As to the third factor of the test, Apotex argues that the court erred in balancing
the hardships because it ignored the harm Apotex would face if an injunction were
granted, particularly in light of the settlement agreement which, according to Apotex,
demonstrates that the harms Sanofi would suffer are a result of its own conduct. Sanofi
responds that the court did not abuse its discretion in finding that that factor favored
9
Apotex also argues that the district court erred by applying a presumption of
irreparable harm because Sanofi established a likelihood of success on the merits.
Apotex contends that applying such a presumption is in direct contravention of the
Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837
(2006). Because we conclude that the district court did not clearly err in finding that
Sanofi established several kinds of irreparable harm, including irreversible price erosion,
we need not address this contention.
06-1613 22
Sanofi, particularly because it was Apotex’s own decision to engage in an at-risk launch
that would trigger its 180-day exclusivity period before reaching the merits of the case.
Based on the record on appeal, we conclude that the court did not clearly err in finding
that Apotex’s harms were “almost entirely preventable” and were the result of its own
calculated risk to launch its product pre-judgment. Sanofi-Synthelabo, slip op. at 48.
Accordingly, the court did not abuse its discretion in finding that the balance of
hardships tipped in Sanofi’s favor.
The fourth factor we consider is the public interest, which the court found tips in
favor of Sanofi, albeit slightly. Apotex, as well as amici,10 argue that the district court
erred in failing to consider certain public harms that would result if an injunction issues.
Apotex, in particular, contends that if the generic products were removed from the
market, consumers would be inclined not to purchase their medication because of the
accompanying price increase for the brand name drug, leading to possible deaths.
Apotex further argues that significant consumer confusion may ensue because of the
six-month supply that was shipped to the American market, which was not equally
distributed among vendors. Sanofi responds that the court did not clearly err in finding
that the interest in encouraging pharmaceutical research and development outweighed
the public interest advanced by Apotex.
We agree with Sanofi. While Apotex raises legitimate concerns, the district court
did not abuse its discretion in concluding that those concerns were outweighed by the
public interests identified by Sanofi. We have long acknowledged the importance of the
10
Medco Health Solutions, Inc., Patients Not Patents, Inc., and the Generic
Pharmaceutical Association submitted amicus curiae briefs arguing for reversal of the
grant of the preliminary injunction.
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patent system in encouraging innovation. Indeed, the “encouragement of investment-
based risk is the fundamental purpose of the patent grant, and is based directly on the
right to exclude.” Patlex Corp. v. Mossinghoff, 758 F.2d 594, 599 (Fed. Cir. 1985). The
district court relied on the testimony of Dr. Hausman in finding that the average cost of
developing a blockbuster drug is $800 million. Importantly, the patent system provides
incentive to the innovative drug companies to continue costly development efforts. We
therefore find that the court did not clearly err in concluding that the significant “public
interest in encouraging investment in drug development and protecting the exclusionary
rights conveyed in valid pharmaceutical patents” tips the scales in favor of Sanofi.
Sanofi-Synthelabo, slip. op. at 51.
C. Unclean Hands
Having concluded that there was no abuse of discretion in the trial judge’s
determination that the four factors of the preliminary injunction test favor an injunction,
we next consider Apotex’s argument concerning unclean hands. Apotex argues that the
district court erred by precluding Apotex from introducing evidence that counsel for BMS
and Sanofi allegedly engaged in fraudulent misconduct during settlement negotiations
by concealing oral side agreements from regulators and falsely certifying that such
agreements did not exist. The district court excluded that evidence from the preliminary
injunction hearing, reasoning that the “conduct of the parties during settlement
negotiations does not affect the validity of the patent or the veracity of submissions to
[the district court], and therefore has no relevance to the question of whether a
preliminary injunction should issue.” Id. at 55.
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We conclude that the district court did not abuse its discretion by precluding
Apotex from asserting this defense. Apotex contends the court clearly erred by
disregarding Precision Instrument Manufacturing Co. v. Automotive Maintenance
Machinery Co., 324 U.S. 806 (1945). That case, however, is not on point. There the
plaintiff sought to enforce several patents and contracts that were obtained as a result
of a settlement agreement entered into by the parties in order to resolve an interference
proceeding, during which the parties either committed perjury before the Patent Office
or concealed their knowledge of the perjury. The Supreme Court applied the unclean
hands doctrine and dismissed plaintiff’s patent infringement and breach of contract
claims. In doing so, the Court noted the public policy interest against asserting and
enforcing patent claims that are “infected with fraud and perjury.” Id. at 819.
Apotex’s unclean hands defense, however, is not based on fraud or perjury that
counsel for BMS or Sanofi allegedly committed while obtaining the ’265 patent, but
instead relates to the settlement agreement entered into between Sanofi and Apotex
well after the patent was obtained. Because the claims at issue in the grant of the
preliminary injunction concern infringement and validity of the ’265 patent, as opposed
to issues relating to the settlement agreement itself, we find that the court did not abuse
its discretion in excluding such evidence in the context of the preliminary injunction
motion. See Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240, 245 (1933)
(noting the court’s discretion in applying the unclean hands doctrine when a plaintiff’s
alleged misconduct “has no relation to anything involved in the suit”).
06-1613 25
D. Bond
Lastly, Apotex challenges the court’s decision to set bond in the amount of $400
million, which it asserts fails to provide sufficient security because it represents only
10% of the annual market and ignores Apotex’s loss of market share. Sanofi responds
that the amount far exceeds any damage Apotex may face, particularly in light of the
fact that there was no recall of Apotex’s generic product after it launched its product on
August 8, 2006.
The posting of a bond is governed by Federal Rule of Civil Procedure 65(c) which
provides that:
No restraining order or preliminary injunction shall issue
except upon the giving of security by the applicant, in such
sum as the court deems proper, for the payment of such
costs and damages as may be incurred or suffered by any
party who is found to have been wrongfully enjoined or
restrained.
Fed. R. Civ. P. 65(c). The amount of a bond is a determination that rests within the
sound discretion of a trial court. Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126, 136 (2d
Cir. 1997) (noting that a district court has wide discretion under Rule 65(c) in setting the
amount of a bond). The court based its determination on evidence presented before the
court that concerned Apotex’s “potential lost profits, lost market share and associated
costs of relaunch” in the event of wrongful enjoinment. Sanofi-Synthelabo, slip op. at
57. We find no basis for disturbing the court’s assessment of the facts, and thus
conclude that the court did not abuse its discretion in setting the bond amount.
CONCLUSION
We have considered Apotex’s remaining arguments with respect to the myriad of
issues it has raised on appeal and find them unpersuasive. We therefore conclude that
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the district court did not abuse its discretion in granting preliminary injunctive relief.
Accordingly, for the foregoing reasons, we affirm the district court’s grant of the
preliminary injunction. We wish to note that, while we have carefully considered all of
the arguments presented to us in reviewing the district court’s grant of the preliminary
injunction, we have done so in the context of the standard of review applicable to grant
of preliminary injunctions, and that the district court is not bound to its earlier
conclusions on full trial on the merits. We leave to that court the conduct of any further
proceedings.
AFFIRMED.
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