By Kevin E. Noonan --
The Federal Circuit reversed the grant of a preliminary injunction in Warner Chilcott Labs. Ireland Ltd. v. Mylan Pharmaceuticals Inc., an ANDA case brought before Judge Martini in the New Jersey District Court. While not extending or changing the law on the requirements for a preliminary injunction grant, the decision illuminates the considerations the Court finds important in deciding whether a district court has abused its discretion.
The case involved the antibiotic doxycycline hyclate, sold in 75-, 100-, and 150 mg tablets by Warner Chilcott as Doryx® under a license from the NDA holder, Mayne Pharma International Pty. Mayne also owns Orange Book listed U.S. Patent No. 6,958,161, which is related to a modified release coated form of doxycycline. Suit was initiated subject to the Hatch-Waxman statutory scheme when defendant Mylan filed an ANDA for the 150 mg tableted version of the drug containing a Paragraph IV certification that the listed patent was invalid, unenforceable, and not infringed. Filing the lawsuit triggered the automatic 30-month stay of FDA approval of the generic drug, and Warner Chilcott moved the District Court for a preliminary injunction shortly before the period of the stay would have expired (when Mylan anticipated the FDA would grant its approval).
As part of the litigation below, the District Court construed the asserted claims in a Markman hearing. While claim construction was not directly at issue in the appeal, it was relevant to the first prong of the preliminary injunction test: whether Warner Chilcott had shown a reasonable likelihood of success on the merits. The District Court considered expert witness reports from both Warner Chilcott and Mylan regarding whether Mylan's product satisfied the recited limitations of the claims. (The Federal Circuit characterized this as "a battle of the experts.") The outcome of the "battle" was hardly definitive, the District Court saying that there were "some serious factual disputes" between the parties' experts that would need to be resolved after "further testimony and examination and credibility" at trial. The District Court denied Mylan's request for an evidentiary hearing and, despite its reservations about the differences between the experts, granted a preliminary injunction to Warner Chilcott, finding that it had fulfilled the requirements of (1) a likelihood of success on the merits; (2) irreparable harm; and (3) a balancing of the hardships in favor of the plaintiff. Neither the parties nor the Court appear to have considered the fourth prong, the public interest. "Notably," the opinion states, "the district court did not address Mylan's arguments that the '161 Patent is invalid because of anticipation or obviousness."
There is one additional factor at play in the case. The District Court informed the parties that it would not be able to conduct a trial on the merits until January 2012 due to a lengthy murder trial scheduled for autumn 2011.
The Federal Circuit reversed, in an opinion by Judge O'Malley joined by Chief Judge Rader and Judge Dyk. The Court applied the law of the regional (Third) Circuit for whether the preliminary injunction was granted as the result of "an abuse of discretion, an error of law or a clear mistake in the consideration of proof." Factual findings were reviewed for clear error. Here, the panel found clear abuse of discretion, based on the District Court's failure to hold an evidentiary hearing, which the Federal Circuit found was an absolute requirement in the Third Circuit for grant of a preliminary injunction. The opinion states that the District Court granted the injunction on "an unsettled record" in full appreciation that there was a factual dispute between the parties' experts that it did not resolve prior to the injunction grant. While the Federal Circuit "recognize[d] and [was] not unsympathetic to the district court's scheduling demands and the difficulty in balancing a busy criminal docket with pressing civil matters," the opinion reversed because the District Court's decision to grant the injunction was "contrary to Third Circuit law."
Finally, the opinion asserted as another ground for reversing the preliminary injunction that the District Court "failed to make any findings as to Mylan's invalidity challenge" and as a consequence the Federal Circuit was prevented "from engaging in any meaningful review of that issue." Under Federal Rule of Civil Procedure 52(a)(1), a district court must "find the facts specially and state its conclusions of law separately" and here the District Court failed to comply with the Rule. Supreme Court (Mayo v. Lakeland Highlands Canning Co., 309 U.S. 310, 316 (1940)) and Third Circuit (Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004)) precedent (as well as Federal Circuit law, for example, Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1378-79 (Fed. Cir. 2009)) mandated compliance with Rule 52. The District Court's "utter failure" to comply with Rule 52 with regard to Mylan's invalidity allegations provided yet another basis for overturning the District Court's injunction. Nevertheless, the opinion vacated and remanded with instructions that the District Court could consider entering a temporary restraining order and consolidating the evidentiary hearing for the injunction with a (bench) trial on the merits. The opinion also "[took] no issue with the adequacy of the trial court's findings on irreparable harm and the balance of the hardships" and mandated no reconsideration of these prongs of the test "unless [the District Court] chooses to do so."
While not breaking new ground on preliminary injunction jurisprudence, the case does present an interesting issue, particularly in view of the Supreme Court's penchant over the last decade to chastise the Federal Circuit for adopting patent-specific rules for matters like injunctions. The High Court has made it very clear (in cases such as eBay Inc. v. MercExchange, L.L.C.) that the Federal Circuit is bound by and must apply the same rubrics for making decisions about injunctions and other procedural matters as are applied in the other several circuit courts. And as the Federal Circuit has done here, the Court must apply the law of the regional circuit in which the district court sits.
This raises the question of whether it might be better for appeals such as this one, which depends more on the application of procedural rules and precedent developed in said regional circuits (rather than Federal Circuit-specific case law) to be decided by the regional circuit courts of appeal. The question presented for review in this case is illustrative: the Federal Circuit did not apply any patent-specific rules or precedent to the matter; indeed, the cases cited were (by and large) Third Circuit cases. For both procedural consistency and as a way to reduce the workload on the Federal Circuit it might make sense for these cases not to go to that Court. The particular regional circuit court could always (on party motion or sua sponte) transfer the appeal to the Federal Circuit if the issues appeared to be controlled by questions of patent law. But for many cases, judicial efficiency might be better served to render unto the Federal Circuit those things limited to patent law, and to leave for the regional circuits those issues that are not so limited.
Warner Chilcott Labs. Ireland Ltd. v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2011)
Panel: Chief Judge Rader and Circuit Judges Dyk and O'Malley
Opinion by Circuit Judge O'Malley