A Question of Patent Invalidity Must Be ‘Substantial’ to Defeat Preliminary Injunction, Appeals Court Says

The U.S. Court of Appeals for the Federal Circuit recently issued a precedential decision affirming a district court’s decision to maintain a preliminary injunction against an accused patent infringer. The appeals court in Natera, Inc. v. NeoGenomics Lab'ys, Inc. restated the established three-part test for preliminary injunctions: likelihood of success, irreparable harm, and public interest. For patent cases, the Federal Circuit has split the likelihood of success part of the test into two subparts: infringement and invalidity.

The defendant in Natera attempted to overturn a preliminary injunction by asserting that a “mere ‘vulnerability’ of the patent to an invalidity challenge” is enough to show that the plaintiff is unlikely to succeed. The Federal Circuit rejected this analysis and reaffirmed that a “substantial question of invalidity” is required to defeat a preliminary injunction.

The defendant’s obviousness challenge to the asserted patent was based on “little more than conclusory argument with no meaningful supporting documentation” and failed to raise a “substantial” question of invalidity, the court said. Importantly, the plaintiff presented “significant evidence” regarding barriers to success that undermined the defendant’s obviousness challenge and later arguments on appeal. The Federal Circuit rebuffed the defendant’s attempts to raise additional arguments that were not raised with the district court.

Conversely, the Federal Circuit issued a decision a few months prior affirming a district court’s decision not to issue a preliminary injunction due to the plaintiff’s failure to show the asserted patent was likely to withstand the defendant’s invalidity challenge. In Biomedical Device Consultants & Lab'ys of Colorado, LLC v. ViVitro Labs, Inc., the defendant presented an expert declaration supporting each basis of invalidity, and the plaintiff’s responsive evidence and arguments failed to overcome the substantial merit of the defendant’s invalidity positions.

In this case, the Federal Circuit found the plaintiff’s asserted “substantial and compelling” evidence of non-obviousness amounted to nothing more than a single statement by the plaintiff’s president and failed to demonstrate that that district court abused its discretion in denying the injunction.

The Biomedical decision also notes that “vulnerability” of a patent to being invalidated at the preliminary injunction stage means something less than the clear and convincing proof required to show invalidity at trial. However, the Natera and Biomedical decisions together make clear that a “substantial” question of invalidity cannot be raised or negated without meaningful supporting evidence. Parties would be well served to consider establishing this type of evidence early in a case where a request for preliminary injunction is expected.

The Natera decision also highlights the significance of presenting substantial evidence in support of the other preliminary injunction factors. The plaintiff presented evidence that demand for the competing products was the result of using the patented method, and that the patented method was critical to overcoming previous challenges in the industry in support of a finding of irreparable harm. The plaintiff also presented evidence that it could fill the demand for the equivalent product such that a preliminary injunction against the accused infringing product would negatively impact the public. By contrast, the evidence presented by the defendant was conclusory and could not overcome the plaintiff’s arguments.

For more information, please contact the Barnes & Thornburg attorney with whom you work or Kyle Forgue at 312-214-4841 or kyle.forgue@btlaw.com.

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