Friday, August 09, 2013

CAFC discusses criteria for preliminary injunction [PI] in Aria case

The CAFC decision in Aria Diagnostics.

Aria Diagnostics, Inc., now known as Ariosa Diagnostics, Inc. (Ariosa) sought a declaration that its Harmony test did not infringe any claim of U.S. Patent No. 6,258,540 (the ’540 patent), owned by defendant Isis Innovation Limited (Isis) and licensed by Isis exclusively to Sequenom, Inc. (Sequenom). Sequenom counter- claimed, alleging that Ariosa’s Harmony test infringes the ’540 patent. The United States District Court for the Northern District of California denied Sequenom’s motion for a preliminary injunction to prevent Ariosa from making, using, or selling that test. Aria Diagnostics, Inc. v. Sequenom, Inc., 2012 WL 2599340 (N.D. Cal. July 5, 2012). Because the district court incorrectly interpreted the asserted claims and improperly balanced factors regarding issuance of a preliminary injunction, this court vacates and remands.


The parties dispute the proper standard of review for claim construction in the context of a preliminary injunction. This court recognizes some flexibility on this point. Compare Chamberlain Group, Inc. v. Lear Corp., 516 F.3d 1331, 1340 (Fed. Cir. 2008) (“a correct claim construction is almost always a prerequisite for imposition of a prelim- inary injunction), with Int’l Cmty. Materials v. Ricoh Co., 108 F.3d 316, 318-19 (Fed. Cir. 1997) (“We do not regard it as our function [in preliminary injunction appeals] to definitively construe” claims or to review claim construc- tion “as if from final judgment”).
In this case, the court need not reach out to comment on those alternative approaches to the question. Even under the ostensibly more relaxed standard, the district court erred in its claim construction. As a consequence, the district court erred in finding a substantial question of noninfringement.

Of Myriad:

The district court also found there was a substantial question over whether the subject matter of the asserted claims was to eligible subject matter. J.A. 16-19. Since the district court’s decision, the Supreme Court decided Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013) (Myriad), which held that product claims directed to isolated DNA segments were not eligible subject matter, but that product claims di- rected to synthetic cDNA were patent eligible. See id. at 2119-20. Because the district court did not have the benefit of Myriad and also in light of this court’s disa- greement with the district court’s claim construction, this court remands for the district court to examine subject matter eligibility in the first instance.
To be clear, this court offers no opinion as to whether there is or is not a substantial question regarding the subject matter eligibility of the asserted claims.

Of going out of business:

Third, the district court found that a preliminary in- junction would put Ariosa out of business. J.A. 20. A record showing that the infringer will be put out of busi- ness is a factor, Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568, 1570 (Fed. Cir. 1993) (finding no error in district court’s determination that balance of hardships favored accused infringer where it “would in all likelihood be forced out of business” if enjoined), but does not control the balance of hardships factor. Id. at 1570 (“none of the factors is dispositive”); Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys., 132 F.3d 701, 708 (Fed. Cir. 1997) (the fact that an accused infringer would be put out of business “does not insulate it from the issuance of a preliminary injunction” if other factors weigh in favor of the relief). This court can easily imagine a situation where the loser on either side may have to close its doors. At this point, however, this court has seen no comparison of difficulties or losses Ariosa might experience weighed against the harms Sequenom might suffer without protec- tion of its legal exclusive rights.


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