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Everett Laboratories, Inc. v. Breckenridge Pharmaceutical

August 26, 2008

EVERETT LABORATORIES, INC. PLAINTIFF,
v.
BRECKENRIDGUE PHARMACEUTICAL, INC. DEFENDANT.



The opinion of the court was delivered by: Linares, District Judge.

OPINION

Plaintiff Everett Laboratories, Inc. ("Everett") sued defendant Breckenridge Pharmaceutical, Inc. ("Breckenridge") for, inter alia, infringement of claims 2 and 4 of U.S. Patent No. 6,814,983 and U.S. Patent No. 7,390,509. Currently before the Court is Everett's motion for a preliminary injunction, filed June 26, 2008. The Court heard oral argument on August 7, 2008 and has reviewed the parties' submissions. For the reasons set forth herein, the Court grants Plaintiff's motion for a preliminary injunction.

I. Factual and Procedural History

Everett, a New Jersey-based pharmaceutical company that markets and sells prescription-only nutritional supplements and multivitamins, is the owner of U.S. Patent No. 6,814,983 ("the '983 patent"), issued November 9, 2004 and entitled "Compositions and Methods for Nutrition Supplementation." Everett is also the owner of U.S. Patent No. 7,390,509 ("the '509 patent" and together with the '983 patent, the "patents"), which issued June 24, 2008 and bears the same title as the '983 patent. The patents are directed to "compositions comprising vitamins and minerals and methods for using these compositions for nutritional supplementation in . . . pregnant or lactating [women]." Claims 2 and 4 in the '983 and '509 patents cover Everett's drug at issue here, Vitafol-OB, a prescription-only prenatal nutritional supplement and multivitamin. VitafolOB contains specified quantities of various vitamins and minerals and is sold directly to drug wholesalers who in turn sell it to retailers, including pharmacies.

On June 5, 2008, Everett first discovered that Breckenridge, a company headquartered in Florida that markets low cost multivitamins and nutritional supplements, was selling Multifol Plus, a prescription-only prenatal nutritional supplement and multivitamin. Because Multifol Plus contains the same vitamins and minerals in the precise amounts as in Vitafol-OB, Everett contends that Multifol Plus is a "direct" or "knock-off" copy or a "generic" version of VitafolOB.*fn1 Moreover, Everett maintains upon information and belief that Breckenridge contacted First DataBank, one of the leading providers of electronic drug databases to the health care industry, to hold out Multifol Plus as a generic version of Vitafol-OB.

On June 24, 2008, Plaintiff filed a complaint against Breckenridge, alleging patent infringement of both the '983 and the '509 patents, violations of federal and state unfair competition laws as against the Lanham Act and the New Jersey Fair Trade Act, respectively, and copyright infringement. Two days later, Plaintiff filed a motion for preliminary injunction, seeking to enjoin Breckenridge from continuing to sell Multifol Plus. In response, to the motion, Breckenridge claims that both the '983 and '509 patents are invalid.*fn2

II. Standard of Review

Preliminary injunctions are extraordinary remedies that are not routinely granted. Nat'l Steel Car, Ltd. v. Canadian Pacific Ry., Ltd., 357 F.3d 1319, 1324 (Fed. Cir. 2004). The decision to grant a preliminary injunction is within the sound discretion of the district court. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 394 (2006); see Abbott Labs. v. Andrx Pharms., Inc., 452 F.3d 1331, 1334 (Fed. Cir. 2006); Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). The Court examines the following four factors in determining whether injunctive relief should be granted:

(1) whether the movant has shown a reasonable likelihood of success on the merits;

(2) whether the movant will be irreparably harmed by denial of the injunctive relief sought;

(3) whether the injury to the movant in the absence of injunctive relief outweighs the possible harm to the non-movant if the injunction is granted; and

(4) the impact of a preliminary injunction on the public interest. See, e.g., Abbott Labs, 452 F.3d at 1334; Nat'l Steel Car, 357 F.3d at 1324-25.

The movant herein bears the burden of demonstrating that the injunction it seeks should issue. See, e.g., Abbott Labs., 452 F.3d at 1334. "[A] movant cannot be granted a preliminary injunction unless it establishes both of the first two factors, i.e., likelihood of success on the merits and irreparable harm." Amazon.com, 239 F.3d at 1350 (emphasis in original). However, the Court must generally weigh all four factors in determining whether to grant an injunction. See id.; Novartis Corp. v. Teva Pharms. USA, Inc., Nos. 04-4473, 06-1130, 2007 WL 1695689, at *3 (D.N.J. June 11, 2007).

III. Discussion

A. Likelihood of Success on the Merits

In order to establish likelihood of success on the merits, Plaintiff must prove, in light of the presumptions and burdens applicable at trial, that (1) Breckenridge is infringing the asserted claims of the '983 and '509 patents and (2) the patents can withstand Breckenridge's claims of invalidity. See Tate Access Floors, Inc. v. Interface Architectural Res., Inc., 279 F.3d 1357, 1365 (Fed. Cir. 2002); Amazon.com, 239 F.3d at 1350. Breckenridge does not dispute infringement and thus, only the second inquiry is at issue here. With respect to said inquiry, it is Plaintiff's burden to show that Defendant's invalidity defenses lack substantial merit. See Abbott Labs., 452 F.3d at 1335. In other words, if Defendant raises a substantial question of invalidity, Plaintiff is not entitled to a preliminary injunction. See Abbott Labs., 452 F.3d at 1335; see also Amazon.com, 239 F.3d at 1350-51 (stating that if the patentee "raises a substantial question concerning either infringement or validity, i.e., asserts an infringement or invalidity defense that the patentee cannot prove 'lacks substantial merit,' the preliminary injunction should not issue"); cf. Erico Int'l Corp. v. Vutec Corp., 516 F.3d 1350, 1354 (Fed. Cir. 2008) (the alleged infringer "must show a substantial question of invalidity to avoid a showing of likelihood of success").

In making this determination, the Federal Circuit has emphasized that the district court's finding as to likelihood of success at the preliminary injunction stage is just that-preliminary. Specifically, the Federal Circuit has stated, "[v]alidity challenges during preliminary injunction proceedings can be successful, that is, they may raise substantial questions of invalidity, on evidence that would not suffice to support a judgment of invalidity at trial." Amazon.com, 239 F.3d at 1358; see also Erico, 516 F.3d at 1355-56 (emphasizing that "a showing of a substantial question of invalidity requires less proof than the clear and convincing standard to show actual invalidity"); Novartis, 2007 WL 1695689, at *3 n.8 (indicating that a district court's finding that defendant has raised a substantial defense does not mean that the defendant will carry its burden at trial to prove invalidity based on clear and convincing evidence). "Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial." Amazon.com, 239 F.3d at 1359; see also Ortho-McNeil Pharm., Inc. v. Mylan Labs. Inc., Nos. 04-1689, 06-757, 2006 WL 3019689, at *2 (D.N.J. Oct. 23, 2006).

Breckenridge makes two claims of invalidity: first, that the patents are invalid as obvious under 35 U.S.C. § 103 (Def. Opp'n at 7) and second, that the '983 patent is invalid as failing to comply with its specification pursuant to 35 U.S.C. § 112 (id. at 14). The Court's consideration of both of these arguments follows.

1. Obviousness

A patent may not be obtained from the United States Patent and Trademark Office ("PTO") if the "differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which the subject matter pertains." 35 U.S.C. ยง 103(a). This is a legal question, based on the underlying factual determinations. See, e.g., PharmaStem Therapeutics, Inc. v. ViaCell, Inc., 491 ...


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