Patent Law

Novo Nordisk v. Caraco Pharma (Fed. Cir. 2009)

Unlike most interlocutory orders, the grant or denial of preliminary injunctive relief may be immediately appealed. A district court only awards preliminary injunctive relief after determining that the moving party is likely to win on the merits and is suffering irreparable harm that can be solved by the injunction. Thus, it is no surprise that district courts are reluctant to stay injunctive relief pending appeal. Such a stay may even serve as a signal to the Federal Circuit (1) that the lower court lacks confidence in their decision and (2) that the case does not require any expedited schedule.

In Novo Nordisk v. Caraco, the E.D. Michigan court issued an injunction that would force the patentee to amend its Orange Book listings for its diabetes treatment drug Prandin. The change would make it easier for the generic manufacturer Caraco to obtain FDA approval.

Without substantive opinion, the Federal Circuit has granted a stay of this relief pending full appellate review of the injunction.

Preliminary relief and resulting stays of relief are interesting to study because of the court's willingness to engage in speculation and admit uncertainty. Preliminary relief is granted when the movant shows that it will likely win the case on the merits and that it will suffer irreparable harm if preliminary relief is not granted. Although the appellate court gives deference to a lower court's decision on preliminary relief, it takes a somewhat fresh-look at staying the preliminary relief pending outcome of an appeal. A stay is typically granted based on some evidence that the appellant will likely win the appeal as well as the harm/benefit associated with a temporary stay. To minimize the harm of a stay, the moving party often requests an expedited briefing schedule.

The leading case describing the approach is Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511 (Fed. Cir. 1990). In that case, the court discussed its four-factor equitable analysis modified to focus on stays pending appeal.

In deciding whether to grant this motion, we must apply the four factors that always guide our discretion to issue a stay pending appeal: (1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

(Opinion by Judge Michel)