Thursday, April 24, 2014

Update on the Emergency Motion to Stay the Preliminary Injunction in Edwards v. CoreValve

Last week I published the following post:
According to an article in yesterday's Wall Street Journal, in an oral ruling on Friday a federal district court judge in Delaware entered an injunction against Medtronic's CoreValve in a patent infringement suit brought by Edwards Lifesciences.  Last year I blogged about the Federal Circuit's decision reversing the district court judge's decision declining to award an injunction (see my post, here).  Joseph Walker, the author of the Wall Street Journal article, describes the ruling as a "surprise" and states further that:
. . . Judge Sleet said the court was "convinced" that Medtronic's CoreValve "is a safer device and that patients in whom it is implanted have better outcomes with a lower risk of death," according to a transcript of the ruling. He added: "At the same time, the Court cannot downplay the strong public interest favoring enforcement of patent rights. Thus, the court finds that the public interest weighs in favor of granting Edwards a preliminary injunction." He allowed for one exception, granting Medtronic the right to sell its product in cases where patients are ineligible to have the Edwards device implanted, which doctors said could occur because of anatomical differences between patients.
I'd like to read the judge's opinion in its entirety when he publishes one (the transcript can be downloaded from Dennis Crouch's Patently-O Blog), but my initial reaction is that I find the decision quite troubling.  The fourth eBay factor asks whether the patentee has demonstrated "that the public interest would not be disserved by a permanent injunction."  Notwithstanding the importance of patent rights in the medical device industry, it seems to me that the public interest would weigh in favor of an ongoing royalty if, as the judge is reported to have said, the CoreValve device is safer and poses "a lower risk of death."  
The article states that Medtronic has filed an emergency motion for a stay pending appeal, and Dennis Crouch has more information on this matter here (along with links to the transcript and the motion papers), which I commend to readers' attention. Dennis writes:
. . . the Federal Circuit has asked for immediate briefing on whether to grant a stay of preliminary relief - a decision is expected by the expiry of the district court's seven business day temporary reprieve. . . .
. . . the patent expired in May 2012, but the FDA has granted an interim extension of patent rights under 35 U.S.C. § 156 (for delays in FDA approval). One limitation of a patent term extension is that ordinarily, the extension does extend the term of the entire patent, but instead is “limited to any use approved for the product.” In Merck v. Kessler (Fed. Cir. 1996), the court interpreted this as extending only to “the product on which the extension was based.” Here, Medtronic argues that its product – although perhaps covered by the original patent – is different from Edwards approved product (Sapien) and therefore is not covered by the term extension.
The district court considered these issues and decided that the clear language of Section 156(b) was limited approved uses not approved products. And, since the accused infringing product has the same use (valve transplant), then the patent covers it as well.
This is extremely interesting, and I'm sure that many of use will be keeping close watch on what happens
We now have an update on the matter, courtesy of the Delaware IP Law Blog.  In a post yesterday titled The Preliminary Injunction Fight in Edwards LifeSciences v. CoreValve, Robert Vrana writes that
The Federal Circuit agreed on April 15 to expedite the appeal and issued a decision on Monday, April 21 staying enforcement of the preliminary injunction. The Federal Circuit panel granted Medtronic’s motion to stay “pending further notice by this court” in a 2-1 order that did not further explain its rationale. Circuit Judges Rader, Prost, and Newman sat on the panel, with Judge Newman dissenting. The Federal Circuit will now review the preliminary injunction on the merits.
There is also coverage in the Wall Street Journal here, which states that final briefings on appeal are due on June 19.

I should note that my initial post on this matter wasn't clear on one point:  at the hearing earlier this month, Judge Sleet entered a preliminary, not a permanent, injunction against CoreValve/Medtronic.  As I noted in my initial post, the Federal Circuit remanded the case in late 2012 for the district judge to consider whether to enter a permanent injunction.  According to CoreValve's emergency motion for a stay, however (available from the Patently-O link above):
Edwards filed suit on February 12, 2008. On April 1, 2010, the jury found Medtronic infringed claim 1 of the ’552 patent, awarding $72,645,555 in lost profits and an additional $1,284,861 in royalties. The district court denied Edwards’ permanent injunction motion. On appeal, this Court affirmed the damages award, but remanded Edwards’ permanent injunction motion for further consideration based on changed circumstances. Edwards Lifesciences AG, et al v. CoreValve Inc., et al, 699 F.3d 1305 (Fed. Cir. 2012).
The ’552 patent was set to expire in May 2012. The Patent Office granted Edwards interim term extensions, but not yet a final one.

On November 26, 2013, Edwards filed a preliminary injunction motion which alleged that the market for Edwards’ products would be adversely impacted  by Medtronic’s introduction of its MCS product following the anticipated FDA approval of that product. On January 16, 2014, the district court decided to hold a limited evidentiary hearing on the potential impact of an injunction on the public interest. That hearing was held on April 11, 2014 and at its conclusion the district court granted the preliminary injunction from the bench banning MCS sales. 
(Emphasis in original.)  See also Judge Sleet's opinion, which is now available on Westlaw (2014 WL 1493187).

Of course, in the U.S. "public interest" is a factor to weigh in both the preliminary and permanent injunction context, though it's sometimes worded a bit differently in these two contexts.  Judge Sleet's opinion states:
To secure a preliminary injunction under Section 283, the movant must establish four factors: “(1) the likelihood of success on the merits of the underlying litigation, (2) whether irreparable harm is likely if the injunction is not granted, (3) the balance of hardships as between the litigants, and (4) factors of the public interest.” Abbott v. Sandoz, 544 F.3d 1341, 1344 (Fed.Cir.2008); see also AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1049 (Fed.Cir.2010) (“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.”) (Citations omitted). The court must balance all four factors, but the court may grant the preliminary injunction where “the weakness of the showing regarding one factor is overborne by the strength of the others.” Chrysler Motors Corp. v. Auto Body Panels of Ohio, Inc., 908 F.2d 951, 953 (Fed.Cir.1990). Although the court has full discretion over the decision to grant a preliminary injunction, “a preliminary injunction is a drastic and extraordinary remedy that is not routinely granted.” Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568 (Fed.Cir.1993).  
The eBay decision articulates the standard for granting a permanent injunction as follows:
A plaintiff must demonstrate: (1) that it has suffered anirreparable injury; (2) that remedies available at law, suchas monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardshipsbetween the plaintiff and defendant, a remedy in equity iswarranted; and (4) that the public interest would not be disserved by a permanent injunction.
Judge Sleet's opinion reviews the evidence on the public interest before concluding:
The expert testimony suggests that patients with large annulus sizes must be allowed ongoing access to the CoreValve Generation 3. The testimony also indicates that the CoreValve Generation 3 may be to some degree the safer, better option for most patients. In addition, the court found credible the experts' assertions regarding the devastating effect on patient care and outcomes that would result from the CoreValve Generation 3 being banned for the duration of Edwards' patent extension. ( See, e.g., Direct Examination of Dr. Michael Deeb, D.I. 593 at 133:14–20 (“I think it would have a distinct negative impact on the patients' outcome if there were to be a restriction of usage of CoreValve for transcatheter aortic valve replacement.”); Direct Examination of Dr. Jeffrey Popma, D.I. 593 at 189:19–8 (Stating that removing the CoreValve Generation 3 would have a “devastating effect” and that this “would put at risk a substantial portion of general population with aortic valve disease who are not suitable candidates for surgery.”).) As Dr. Deeb passionately emphasized, “these valves are not interchangeable[ ]”, (D.I. 593 at 142:12), and some room must be made for doctors to choose from both devices in determining which one is most suitable for each patient. (Id. atl34:17–136:17 (Explaining regarding the possibility of banning the CoreValve Generation 3 that “I think by eliminating the physician, and tying their arm behind their back in deliverance of care, I think that is a huge mistake for the patient population out there that is being treated.”).) All of this indicates that the public interest is well served in permitting at least some number of CoreValve Generation 3 devices to be sold on the market.
Nevertheless, the court cannot downplay the strong public interest favoring enforcement of patent rights. See, e.g., Sanofi–Synthelabo, 470 F.3d at 1383–84 (Affirming district court's finding that the public interest favored enforcement of the plaintiff's patent over availability of multiple options to patients because “ ‘encouragement of investment-based risk is the fundamental purpose of the patent grant, and is based directly on the right to exclude.”) (Citation omitted); Pfizer Inc. v. Teva Pharms., USA, Inc., 429 F.3d 1364, 1382 (Fed.Cir.2005) (Explaining that the public interest is not promoted by “entirely eliminating the exclusionary rights conveyed by pharmaceutical patents. Nor does the statutory framework encourage or excuse infringement of valid pharmaceutical patents.”). Enforcing patent rights is especially important where there is egregious conduct to be addressed and deterred, as there is here. Medtronic disregarded the law in infringing Edwards' patent and boldly continued to thumb its nose at the law by continuing its conduct even after being found to be a willful infringer. The court cannot ignore the fact that it would serve as a reward of sorts to Medtronic and an incentive for onlookers to behave as Medtronic has should the court permit Medtronic to freely commence sales of its device. In light of all the relevant considerations, the court finds that the public interest weighs in favor of granting Edwards a preliminary injunction, subject to an accommodation for Medtronic to sell its devices to those patients who cannot be helped by Edwards' devices.
. . . The court . . . concludes that the preliminary injunction must be tailored to the present circumstances and the considerable public interest at issue. Thus, Medtronic must be permitted to sell a number of CoreValve Generation 3 devices sufficient to meet the needs of patients that Edwards concedes cannot be served by Edwards' devices. Thus, the court will grant in part and deny in part Edwards' Motion for a Preliminary Injunction, (D.I.548).
It will be interesting to see what the Federal Circuit does following the conclusion of briefing in June.

No comments:

Post a Comment