Nutrition 21 v. U.S., 90-1283

Citation930 F.2d 867,18 USPQ2d 1347
Decision Date29 March 1991
Docket NumberNo. 90-1283,90-1283
Parties, 18 U.S.P.Q.2d 1347 NUTRITION 21, Plaintiff-Appellee, v. The UNITED STATES of America, Plaintiff, v. THORNE RESEARCH, INC., Albert F. Czap, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

William C. Rooklidge, Knobbe, Martens, Olson & Bear, Newport Beach, Cal., argued, for plaintiff-appellee. With him on the brief, were Don W. Martens and Lowell Anderson.

Paul T. Meiklejohn, Seed & Berry, Seattle, Wash., argued, for defendants-appellants. With him on the brief, was Kenneth G. Whitaker.

Before NIES, Chief Judge, and RICH and MAYER, Circuit Judges.

NIES, Chief Judge.

The United States District Court for the Western District of Washington in Nutrition 21 v. Thorne Research Inc., 14 USPQ2d 1244 (1990), granted a preliminary injunction pursuant to 35 U.S.C. Sec. 283 (1988), enjoining the defendants and others "from selling or offering for sale chromium picolinate." Id. at 14 USPQ2d at 1248. The product chromium picolinate is encompassed within claim 1 of U.S. Patent No. 4,315,927 ('927) owned by the United States. The defendants seek relief from the injunction on the ground, inter alia, that the district court erred by failing to set forth adequate findings of fact to support the injunction. We agree. Accordingly, we vacate the injunction.

I Facts

The '927 patent is entitled "Dietary Supplementation with Essential Metal Picolinates." Claim 1 of the '927 patent covers metal picolinates, which include chromium picolinate, the particular compound which Thorne has been preliminarily enjoined from selling. The inventor of '927, Gary W. Evans, a researcher at the U.S. Dept. of Agriculture Human Nutrition Laboratory, assigned his patent to the United States. The United States, in turn, licensed Nutrition 21 to, inter alia, "make, have made, use and sell" chromium picolinate. In June 1989, Nutrition 21 learned that Thorne was offering to sell chromium picolinate in direct competition with Nutrition 21. Thereafter, Nutrition 21 filed suit against Thorne for patent infringement and moved for a preliminary injunction. For further factual background, see the opinion being issued concurrently herewith in Nutrition 21 v. United States, 930 F.2d 862 (Fed.Cir.1991).

II Jurisdiction

Thorne's argument that Nutrition 21 cannot maintain this lawsuit without participation by the United States is rejected by our decision in the companion appeal, 930 F.2d 862. Suffice it here to say, we have concluded that Nutrition 21 may sue Thorne without the United States as a party.

III

Standard for Obtaining Preliminary Injunction

As this court has previously stated:

Whether a preliminary injunction should issue turns upon four factors: 1) the probability that the movant will succeed on the merits; 2) the threat of irreparable harm to the movant should a preliminary injunction be denied; 3) the balance between this harm and the harm that granting the injunction will cause to the other parties litigant; and 4) the public interest.

Pretty Punch Shoppettes v. Hauk, 844 F.2d 782, 783, 6 USPQ2d 1563, 1564 (Fed.Cir.1988) (citation omitted). On appeal, the grant of a preliminary injunction is reviewed to determine whether "the district court abused its discretion, committed an error of law, or seriously misjudged the evidence [underlying its findings of fact]." Smith Int'l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1579, 219 USPQ 686, 691 (Fed.Cir.), cert. denied, 464 U.S. 996, 104 S.Ct. 493, 78 L.Ed.2d 687 (1983).

A district court is specifically required to make findings of fact on which it relies to justify granting a preliminary injunction under Fed.R.Civ.P. 52(a). 1 Sufficient factual findings on the material issues are necessary to allow this court to have a basis for meaningful review. Oakley, Inc. v. Int'l Tropic-Cal, Inc., 923 F.2d 167, 168-169 (Fed.Cir.1991). Otherwise this court has no basis for evaluating what facts entered into the district court's analysis or whether the district court's reasoning comports with the applicable legal standard. Pretty Punch, 844 F.2d at 784, 6 USPQ2d at 1565. As explained below, these required findings of fact are missing from the district court's opinion.

IV Likelihood of Success on the Merits

In the proceedings below, Thorne raised substantive issues respecting the validity and enforceability of the '927 patent based on evidence of record. The presumption of validity of a patent is a procedural device that places the burden of going forward and the ultimate burden of persuasion at trial on one attacking the validity of a patent. See 35 U.S.C. Sec. 282 (1988); Roper Corp. v. Litton Systems, Inc., 757 F.2d 1266, 1270, 225 USPQ 345, 347 (Fed.Cir.1985). However, at the preliminary injunction stage, because of the extraordinary nature of the relief, the patentee carries the burden of showing likelihood of success on the merits with respect to the patent's validity, enforceability, and infringement. In Atlas Powder Co. v. Ireco Chemicals, 773 F.2d 1230, 1233, 227 USPQ 289, 292 (Fed.Cir.1985), while rejecting a requirement that the patentee must establish validity "beyond question," the court held The burden upon the movant should be no different in a patent case than for other kinds of intellectual property, where, generally, only a "clear showing" is required.... Requiring a "final adjudication," "full trial," or proof "beyond question" would support the issuance of a permanent injunction and nothing would remain to establish the liability of the accused infringer. That is not the situation before us. We are dealing with a provisional remedy which provides equitable preliminary relief. Thus, where a patentee "clearly shows" that his patent is valid and infringed, a court may, after a balance of all the competing equities, preliminarily enjoin another from violating the rights secured by the patent.

(Emphasis in original); accord, Roper, 757 F.2d at 1271-72, 225 USPQ at 348-49; Smith Int'l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1580-81, 219 USPQ 686, 692 (Fed.Cir.1983).

The entirety of the district court's analysis of the issue of the nonobviousness of the invention is the following:

Although Thorne has presented some evidence to attack the validity of the patent, it is not convincing. No affidavits of independent scientists were presented to support contentions of prior art or obviousness.

* * * * * *

Nutrition 21 has a license to a patent which is presumptively valid, and which Thorne has not effectively challenged at this juncture. Thus Nutrition 21 would likely prevail on the merits.

Nutrition 21 v. Thorne Research, Inc., 14 USPQ2d at 1247.

The record contains explicit evidence that the inventor, Gary Evans, overcame a rejection of his claims, at least in part, on the basis of a now admittedly inaccurate affidavit which represented to the PTO that the claimed picolinates formed complexes which were structurally different from the salts formed by the nicotinates disclosed in the prior art Hochberg patent (U.S. Patent No. 2,974,043). Nutrition 21 does not dispute the inaccuracy of Evans' prior representation. Indeed, Nutrition 21 submitted to the district court an affidavit prepared by Evans purporting to distinguish nicotinates and picolinates for other reasons, e.g., that nicotinates form a different kind of complex than the claimed picolinates.

In addition, the record contains relevant prior art not considered by the PTO, namely, Abstract 19, with respect to which the district court made no findings. Nutrition 21 argues that the district court's lack of findings on Abstract 19 may be attributed to Thorne's failure to provide evidence explaining the complex organic chemistry discussed in the abstract. However, the burden was on Nutrition 21 to make a persuasive showing of validity at this stage. Moreover, Nutrition 21 submitted a declaration of Evans which, according to Nutrition 21, explains "why Abstract No. 19 does not teach what Thorne claims it teaches, why the disclosure of Abstract No. 19 was merely cumulative to that of Abstract No. 2501, which was disclosed to the Patent and Trademark Office, and why the claimed invention would not have been obvious over Abstract No. 19." Whether this would be sufficient is unknown. The court made no findings and, moreover, misplaced the burden of proof. See Atlas Powder, 773 F.2d at 1233, 227 USPQ at 292.

Unenforceability Due to Inequitable Conduct

Thorne also challenged Nutrition 21's likelihood of success on the merits on the ground that the patent should be held unenforceable by reason of the inventor's inequitable conduct during prosecution. Thorne asserts that Evans' affidavit to the PTO discussed above was knowingly false and that material prior art references were withheld with intent to mislead. There is some evidence from which it might be inferred that Evans knew at the time that the information supplied to the PTO was wrong. However, the district court failed to make any findings on Thorne's inequitable conduct defense. Nutrition 21 argues that the district court did not make findings because Thorne failed to present a prima facie case of inequitable conduct. It is not plain to us, on the basis of the record, that Thorne's inequitable conduct defense is entirely lacking in substance. In any event, the district court could not sub silentio reject it.

Irreparable Harm

With respect to irreparable harm, the district court stated:

A clear showing of validity and infringement creates a rebuttable presumption of irreparable harm. Roper, 757 F.2d at 1271-72 [emphasis supplied by district court]. Related to the determination of irreparable harm is any delay by the patent holder in seeking injunctive relief. It is, however, "but one factor to be considered by a district court in its analysis of irreparable harm ..." Hybritech [Inc. v....

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