Ciba-Geigy Corp. v. Bolar Pharmaceutical Co., Inc.

• Citation: 224 USPQ 349,747 F.2d 844
• Decision Date: 08 January 1985
• Docket Number: Nos. 84-5056,82-5797,CIBA-GEIGY,s. 84-5056
• Parties: CORPORATION, Appellee, v. BOLAR PHARMACEUTICAL CO., INC., Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 844

747 F.2d 844

224 U.S.P.Q. 349

CIBA-GEIGY CORPORATION, Appellee, v. BOLAR PHARMACEUTICAL CO., INC., Appellant.

Nos. 84-5056, 82-5797.

United States Court of Appeals Third Circuit.

Argued June 13, 1984.

Decided Nov. 2, 1984.

As Amended Dec. 21, 1984.

Rehearing and Rehearing In Banc Denied Jan. 8, 1985.

James F. Keegan, Bendit, Weinstock & Sharbaugh, P.A., West Orange, N.J., Robert B. Jones (argued), Fitch, Even, Tabin & Flannery, Chicago, Ill., John C. Dorfman, Dann, Dorfman, Herrill & Skillman, P.C., Philadelphia, Pa., for appellant/petitioner.

Frederick L. Whitmer, Pitney, Hardin, Kipp & Szuch, Morristown, N.J., Randolph S. Sherman (argued), Richard A. DeSevo, Kaye, Scholer, Fierman, Hays & Handler, New York City, for appellees/respondents.

Before HUNTER and HIGGINBOTHAM, Circuit Judges, and GILES, District Judge ^*

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

This is an appeal from a final order of the district court granting appellee CIBA-GEIGY Corporation ("CIBA") a permanent injunction against appellant Bolar Pharmaceutical Company ("Bolar"). CIBA had previously obtained a preliminary injunction against Bolar after an evidentiary hearing before the district court. This court affirmed the preliminary injunction on appeal. After the affirmance, and based on the same record developed in the evidentiary hearing for the preliminary injunction, the district court granted a permanent injunction. The question now presented is whether the district court erred in granting a permanent injunction. Because we believe the district court properly granted CIBA a permanent injunction, we will affirm.

I.

Since our decision affirming the preliminary injunction, Bolar has been eager to take this case to the Supreme Court where Bolar believes this matter would be resolved in its favor. Unfortunately, because Bolar has repeatedly sought a quick determination by the lower courts, this case might be a classic example of the old axiom that "haste makes waste."

Bolar petitioned the Supreme Court for a writ of certiorari after our affirmance of the preliminary injunction. CIBA-GEIGY Corp. v. Bolar Pharmaceutical Co., 719 F.2d 56 (3d Cir.1983). That petition was denied. --- U.S. ----, 104 S.Ct. 1444, 79 L.Ed.2d 763 (1984) Bolar returned to the district court and asked that the district court convert its hearing concerning the preliminary injunction into a final trial on the merits.

On December 23, 1983, Judge Sarokin, after reviewing the prior litigation history and this court's affirmance of his preliminary injunction, entered an order which provided, inter alia:

the parties having consented to converting the hearings held on plaintiff's motion for preliminary injunction to the final trial on the merits; and the Court having concluded that on the present record and for the reasons set forth in its opinion of August 11, 1982, Ciba-Geigy is entitled to final relief;

It is on this 22nd day of December, 1983, ORDERED, ADJUDGED and DECREED

A. That the preliminary injunction issued on October 4, 1982 is made permanent. ¹

CIBA-GEIGY Corp. v. Bolar Pharmaceutical Co., No. 82-788 (D.N.J. Dec. 23, 1983). Bolar, the loser below, petitioned this court for summary affirmance in order to get this case to the Supreme Court. We denied that request.

My reference to the axiom "haste makes waste" concerns the confusion created when a district court converts an opinion granting a preliminary injunction into an opinion granting a permanent injunction without expressly recasting its findings accordingly. The standard for this court reversing the issuance of a preliminary injunction is different from the standard for reversing a permanent injunction. Because the district court did not expressly recast its findings in terms of the legal standard applicable to a permanent injunction, that mechanical task is left to this court. Although we are able to so convert the district court's opinion, we would much prefer that the district court recast its own opinion in the language of the standard it is applying. This would eliminate the possibility of confusion as to what the district court intended and would, in the long run, promote judicial economy.

As tedious as the process might be for us, we believe it is necessary to ensure that the district court's conversion of its preliminary injunction does not become the basis of another appeal.

When issuing the findings and opinion on the preliminary injunction, the district court used traditional preliminary injunction language. As an example, it said, "even assuming that SK & F's 'reasonable anticipation' standard does not survive Ives, CIBA-GEIGY has demonstrated a likelihood of success in establishing that Bolar copied its trade dress with the intention, at least in part, to induce or permit illegal substitution." CIBA-GEIGY Corp. v. Bolar Pharmaceutical Co., 547 F.Supp. 1095, 1116 (D.N.J.1982) (emphasis added). At other places in its opinion the district court used similar language couched in a preliminary injunction context.

When the parties agreed to "convert" the hearing on the plaintiff's motion for preliminary injunction to the final trial on the merits, the district court did not expressly change the language of its opinion preliminarily enjoining Bolar. It did so by reference, and the parties agreed to the district court disposing of the case in this manner. This reading is bolstered by the district court's order of December 16, 1983 wherein it stated,

[t]his court having held hearings on April 22, May 12 and June 15, 1982 on the motion of plaintiff Ciba-Geigy Corporation for preliminary injunction, plaintiff being satisfied with the sufficiency of its proof therein for purposes of a trial on the merits, and defendant believing it submitted sufficient evidence and made offers of proof therein to defeat plaintiff's claim at a trial of the merits, it is this 16th day of December, 1983,

ORDERED upon consent and stipulation of the parties that

....

(2) The hearing held on April 22, May 12 and June 15, 1982 on plaintiff's motion for preliminary injunction shall constitute the trial on the merits in this action.

CIBA-GEIGY Corp. v. Bolar Pharmaceutical Co., No. 82-788 (D.N.J. Dec. 16, 1983) (emphasis added).

It is almost absurd to believe that the parties did not realize that the district court had implicitly converted its findings of a "likelihood of success" on the merits to findings of "success" on the merits. Moreover, none of the parties made any suggestion in their briefs or at oral argument on the appeal from the permanent injunction that the findings of the district court should be construed in any fashion different from the manner in which we have construed them. The parties in this case were concerned primarily with the sufficiency of the evidence and with the significance of Inwood Laboratories v. Ives Laboratories ("Ives"), 456 U.S. 844, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) to their case.

CIBA believed it had met its burden of proof under any reading of Ives while Bolar believed that it had presented sufficient evidence to defeat CIBA's claim for the preliminary and final injunction. Indeed both parties were so convinced that they felt little need to alter in any significant respect the briefs they had filed in the appeal of the preliminary injunction. For example, Bolar stated,

[e]xcept for minor changes which reflect the conversion of the preliminary injunction into a permanent injunction, its present brief is substantially identical to [its earlier brief.]

Bolar Motion to Consolidate at 3.

For the above reasons, in analyzing this case we have treated the district court's findings that plaintiff has demonstrated "likelihood of success" on the merits as findings that the plaintiff "succeeded" on the merits.

II.

In 1970 CIBA received a patent on the drug hydrazaline hydrochloride/hydrochlorothiazide, an anti-hypertensive composed of hydralazine hydrochloride, a vasodilator, and hydrochlorothiazide, a diuretic. Until its patent was dedicated to the public in 1981, CIBA retained the exclusive right to produce and market the drug, which it sold under the registered trademark APRESAZIDE. CIBA chose to market its 25 mg./25 mg. dosage in a blue and white capsule, its 50 mg./50 mg. in a pink and white capsule, and its 100 mg./50 mg. dosage in a pink flesh and white capsule.

In August 1976, two months before CIBA first marketed APRESAZIDE, another company, Pfizer, Inc., first marketed another anti-hypertensive, Minipress. Minipress is sold in two dosages, one in pink and white capsules, the other in blue and white capsules. Due to the differences in size, the blue and white Minipress capsule does not resemble the blue and white APRESAZIDE capsule. Although the pink and white Minipress capsule is similar in appearance to the pink and white APRESAZIDE capsule, the drugs are chemically distinct and prescribed to distinct groups of patients.

After CIBA's patents were dedicated to the public, Bolar began to manufacture hydrazaline hydrochloride/hydrochlorothiazide capsules the same size, shape and color as the 25 mg./25 mg. and 50 mg./50 mg. APRESAZIDE capsules. ² Bolar produced the capsules with the intention that they would resemble APRESAZIDE capsules. Bolar capsules are identical to APRESAZIDE capsules except that each is imprinted with the name of its respective manufacturer.

CIBA, in marketing APRESAZIDE, followed normal industry practice. As APRESAZIDE can be obtained only with a prescription, CIBA directed advertising to pharmacists and physicians rather than directly to purchasers of anti-hypertensives. Bolar, in marketing its generic drug, has also followed industry practice by directing its advertising to wholesalers who sell to pharmacists who, in turn, may substitute the generic drug for APRESAZIDE on the advice of the prescribing physician and with the consent of the patient.

A pharmacist, when dispensing APRESAZIDE or its generic...