Panel Majority Affirms Injunction for Patent Covering Multiple Freezings to Preserve Liver Cells, Which Judge Gajarsa Says Is Obvious
January 9, 2011
The U.S. Court of Appeals for the Federal Circuit Jan. 9 affirmed a preliminary injunction against a company charged with infringing a patent covering methods for preparing multi-cryopreserved hepatocytes, but Judge Arthur Gajarsa dissented by arguing that the injunction should not have been upheld because the patent is “nothing more than a repetition of steps already known in the art” (Celsis In Vitro Inc. v. CellzDirect Inc., Fed. Cir., No. 2010-1547, 1/9/12).
Likelihood of Success for Plaintiff on Nonobviousness.
In upholding the preliminary injunction, Chief Judge Randall R. Rader first said there was no abuse of discretion in the district court’s finding that plaintiff Celsis In Vitro Inc. had shown a likelihood of success on the infringement defense of obviousness under Patent Act Section 103, 35 U.S.C. § 103. While defendants CellzDirect Inc. and Invitrogen Corporation, now Life Technologies Corporation (LTC), asserted that the patent (7,604,929) was invalid, Rader found evidence showing that this art was unpredictable and taught away from the claimed liver cell preservation techniques. He explained:
As to the scope and content of the prior art, the district court correctly emphasized and found based on the preliminary record that the art was a crowded field for many years and yet there was not one reference to multi-cryopreservation. Moreover, the record shows that the prior art taught away from multiple freezings. A single round of freezing severely damages hepatocyte cells and results in lower cell viability. Celsis provided a sufficient showing at this preliminary injunction stage that, at the time of the invention, a person of ordinary skill would expect a second freezing on those damaged cells to kill even more cells than the first freezing. Celsis provides a helpful analogy. Imagine a runner who finishes one marathon and then immediately begins a second marathon. One would not expect the runner to perform the second in the same time as the first. More likely, the runner would not even finish the second marathon. Similarly, as Celsis’ expert Dr. Strom testified, one would expect lower cell viability and a greater loss of cells after the second cryopreservation than after the first, thus teaching away from multi-cryopreservation.
Further, Rader noted that the G. de Sousa article cited by LTC, entitled Increase of cytochrome P-450 1A and glutathione transferase transcripts in cultured hepatocytes from dogs, monkeys, and humans after cryopreservation, 12 Cell Biology and Toxicology 351 (1996), only discloses a single cryopreservation. “This court has not seen LTC identify any teaching, suggestion, or motivation in the de Sousa article that multiple rounds of freezing would somehow increase rather than decrease cell viability,” he wrote. Rader added that the district court was unpersuaded by what it called the “revisionist history” of LTC’s experts as to why the patent is obvious. “Not one of LTC’s experts testified to actually performing the claimed process or documenting their alleged understanding before the time of the invention, despite having the financial, scientific, and professional incentive to do so,” Rader said, citing the district court’s finding that these experts did not predict the results of the claimed methods at the time of the invention, nor could they find any reference in the prior art suggesting that any other scientist had. Thus, in this preliminary injunction context, he found no clear error in the lower court’s conclusion that a skilled artisan would not have found the invention obvious.
Injunctive Relief Factors Also Favor Celsis.
The test for a preliminary injunction requires a court to weigh four factors: (1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships, and (4) public interest. After finding no error in the district court’s conclusion that Celsis was likely to succeed on the merits as to infringement and nonobviousness, the appellate court then looked at whether Celsis had shown irreparable harm in this case.
Rader could find no error in the district court’s ruling that Celsis had indeed shown that it would be irreparably harmed in the absence of a preliminary injunction. He explained:
The district court found that the permanent, irreparable harm to Celsis would include price erosion, damage to ongoing customer relationships, loss of customer goodwill (e.g., when an effort is later made to restore the original price), and loss of business opportunities. As the district court explained: “There is no effective way to measure the loss of sales or potential growth – to ascertain the people who do not knock on the door or to identify the specific persons who do not reorder because of the existence of the infringer.” …
Based on the record before the district court, this court sees no error in the district court’s finding that Celsis would suffer irreparable harm absent a preliminary injunction. Price erosion, loss of goodwill, damage to reputation, and loss of business opportunities are all valid grounds for finding irreparable harm. Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1362 (Fed. Cir. 2008); Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1382-83 (Fed. Cir. 2006). Thus, contrary to LTC’s assertions, the district court did not err as a matter of law in relying on such evidence.
Agreeing with the district court that the balance of hardships and public interest also favored Celsis, the Federal Circuit affirmed the preliminary injunction.
Judge Sharon Prost Rader joined the opinion.
Gajarsa in Dissent: Injunction Is Flawed Since Patent Is Obvious.
However, Judge Arthur Gajarsa insisted that the injunction never should have issued because the ‘929 patent is invalid for obviousness under KSR Int’l. Co. v. Teleflex Inc., 550 U.S. 398 (2007), and other authority. In his view, the patent simply applies two known techniques—thawing cryopreserved hepatocytes and using density gradient fractionation to separate viable and non-viable cells—and repeats them to obtain 70 percent viability of hepatocytes. “Repeating known steps to obtain a desired result is not inventive,” Gajarsa said, citing Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324 (Fed. Cir. 2009). He continued:
The majority attempts to complicate the simplicity of the claimed invention by asserting that the art was unpredictable while simultaneously asserting that a person of ordinary skill in the art would have predicted low viability of hepatocytes that had been frozen and thawed twice. See Majority Op. at 10-11. The majority cannot have it both ways. To the extent the art was unpredictable—an issue on which the district court was silent—this alone does not require a holding that the invention is not obvious. See Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1364 (Fed. Cir. 2007) (“[O]bviousness cannot be avoided simply by a showing of some degree of unpredictability in the art so long as there was a reasonable probability of success.”).
The majority also faults LTC for failing to point out an explicit teaching, suggestion, or motivation to multi-cryopreserve hepatocytes. Majority Op. at 11. This is directly contrary to the Supreme Court’s opinion in KSR, which the majority fails to recognize. KSR explicitly rejected the rigid application of the teaching-suggestion-motivation test, explaining that “the analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.” 550 U.S. at 418. The majority fails to follow KSR’s mandate in deciding that LTC’s obviousness defense lacked substantial merit.
Under the flexible approach of KSR, there is a substantial question of obviousness concerning the ’929 patent. The patent spells out clearly—as does Celsis’ brief—that there was a need in the art to multi-cryopreserve hepatocytes. The basic approach to determine whether hepatocytes could be frozen multiple times and remain viable was simply to pursue it. Celsis did and found that the hepatocytes were viable. This process is not entitled to be deemed an invention.…
Gajarsa also pointed out that the district court failed to appreciate that, for purposes of defeating the preliminary injunction, LTC only needed to show that the patent was vulnerable by raising a substantial question as to the validity of the ‘929 patent. Such a showing at this stage “requires less proof than the clear and convincing showing necessary to establish invalidity itself,” he stressed, quoting Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343 (Fed. Cir. 2001). Gajarsa said that LTC met this threshold by relying on the patent and admissions from Celsis’ expert to show that all of the claim elements were present in the prior art. “From there, based on the need for multi-cryopreserved hepatocytes, Celsis repeats the well-known steps to obtain its desired result.”
According to Gajarsa, the district court abused its discretion in finding that Celsis showed a likelihood of success on the merits, and the majority “perpetuates this error, and in so doing applies the wrong standard for obviousness.”
Celsis In Vitro was represented by Adam G. Kelly of Loeb & Loeb, Chicago.
Life Technologies Corp. was represented by Francis M. Wikstrom of Parsons Behle & Latimer, Salt Lake City.
Read the opinion in Celsis In Vitro Inc. v. CellzDirect Inc.