Warner Chilcott Laboratories Ireland Ltd. v. Mylan Pharmaceuticals Inc.
Docket: No. 2011-1611
Court: Court of Appeals for the Federal Circuit; January 30, 2012; Federal Appellate Court
Mylan Pharmaceuticals Inc. and Mylan Inc. appeal a district court's preliminary injunction that prevents them from launching a generic version of 150 mg Doryx, a doxycycline hyclate delayed-release tablet. The appeal is based on the district court's reliance on disputed facts without holding an evidentiary hearing and its failure to address Mylan's invalidity defense regarding U.S. Patent No. 6,958,161, which is owned by Mayne Pharma International Pty. Ltd. and licensed to Warner Chilcott.
Mayne holds New Drug Application No. 50-795 for Doryx and claims Mylan's generic infringes upon claim 21 of the '161 Patent, specifically concerning the requirement of a "stabilizing coat" in the tablet formulation. Mylan filed an Abbreviated New Drug Application (ANDA) asserting that the '161 Patent is invalid and subsequently faced an infringement suit from Warner Chilcott, which initiated a statutory stay that delayed FDA approval.
As part of the legal proceedings, the district court construed the term "stabilizing coat" and heard motions for a temporary restraining order and preliminary injunction, culminating in a hearing just before the expiration of the thirty-month stay. The appellate court vacated the injunction and remanded the case for additional proceedings.
The court did not hold an evidentiary hearing or hear live witness testimony during a hearing that lasted over an hour, primarily focusing on expert testimony regarding the presence of a “stabilizing coat” in Mylan’s ANDA product. The court's assessment centered on whether Warner Chilcott was likely to succeed in its infringement claim, which hinged on conflicting expert analyses. Warner Chilcott’s expert cited one test indicating that Mylan’s product met the “stabilizing coat” requirement, while Mylan’s expert referenced five tests supporting the opposite conclusion. The district court identified the resolution of which expert's testimony to credit as a critical inquiry, noting significant factual disputes and acknowledging that these matters would require further examination at a full trial.
Mylan’s counsel requested a brief evidentiary hearing with live testimony, which the court denied, opting instead to defer these issues to the trial scheduled for January 2012 due to conflicting priorities, including a lengthy criminal trial. The district court ultimately ruled that Warner Chilcott demonstrated a likelihood of success on the merits of its infringement claim, that it would suffer irreparable harm without an injunction, and that the balance of hardships favored Warner Chilcott. Consequently, a preliminary injunction was issued against Mylan, prohibiting the sale of generic 150 mg Doryx until the resolution of validity and infringement issues related to the patents in question. Warner Chilcott was required to post a $36 million bond.
Following the injunction, Mylan unsuccessfully sought to stay the injunction pending appeal and subsequently filed a motion for a stay in the appellate court, requesting expedited consideration. The appellate court granted expedited briefing and scheduled oral arguments, ultimately denying Mylan's motion to stay. The standard of review for the appellate court is based on Third Circuit law, assessing the district court's decision for abuse of discretion, legal error, or clear mistakes in proof consideration.
Plenary review applies to the district court’s legal conclusions and application of law to facts, while findings of fact are reviewed for clear error, defined as a firm conviction that a mistake occurred. A plaintiff seeking a preliminary injunction must demonstrate: 1) likelihood of success on the merits; 2) likelihood of suffering irreparable harm without relief; 3) an equity balance favoring the plaintiff; and 4) that the injunction serves the public interest. Such injunctions are considered extraordinary remedies. When a defendant disputes patent validity in response to a preliminary injunction motion, specific procedures must be followed to assess validity, including weighing evidence for and against it.
In this case, the district court abused its discretion by not holding an evidentiary hearing, despite recognizing that its decision hinged on disputed facts. In the Third Circuit, a preliminary injunction cannot be issued based on unresolved factual disputes. The court identified serious factual disputes between expert witnesses but chose to grant the injunction without resolving these issues through a hearing. This approach contradicts established Third Circuit law, which requires resolution of conflicts through oral testimony and cross-examination. The decision must be vacated due to these procedural missteps, despite the court's scheduling challenges.
The district court did not make necessary findings regarding Mylan's invalidity challenge, hindering meaningful review. Under Federal Rule of Civil Procedure 52(a)(1), courts must detail factual findings and legal conclusions, which is crucial for evaluating preliminary injunctions. The lack of express findings on the validity of the '161 Patent and insufficient consideration of both Mylan's validity defense and Warner Chilcott's arguments contravenes established case law. Consequently, the court will vacate the district court's decision and remand for the required findings. Although the preliminary injunction is found to be contrary to controlling authority, the district court may consider issuing a temporary restraining order and consolidating the preliminary injunction hearing with the upcoming bench trial for judicial efficiency. The court notes Mylan's claim that the FDA is withholding final approval due to the injunction, although no supporting evidence was provided. Despite the trial court's omission of public interest considerations, neither party raised this issue on appeal, so it is not a factor in the decision. The adequacy of the trial court's findings on irreparable harm and balancing hardships will not be revisited unless the court opts to do so. The case is vacated and remanded for further proceedings.
