The U.S. Court of Appeals for the Federal Circuit affirmed a district court’s expansion of an earlier injunction via a contempt proceeding, but reversed the finding of contempt against Apotex for violating the earlier injunction. Abbott Laboratories v. Torpharm, Inc., et al., Case No. 07-1019 (Fed. Cir., Oct. 11, 2007) (Michel, C.J.; Dyk, J. concurring-in-part and dissenting-in-part.).
Apotex filed a first Abbreviated New Drug Application (ANDA) seeking to manufacture and sell a generic version of Abbott’s Depakote®, an anti-seizure medication. Judge Posner, sitting as trial judge, concluded that Apotex’s filing infringed the claims of the Abbott patents and enjoined Apotex from commercially manufacturing, using, selling or offering for sale generic divalproex sodium in the United States before the expiration of U.S. Patent Nos. 4,988,731 and 5,212,326. Undeterred, Apotex entered into an agreement with NuPharm to file a second ANDA for a new form of its generic divalproex sodium product. Abbott reacted with a new infringement lawsuit against both companies and initiated contempt proceedings against Apotex in the original lawsuit. Since Judge Posner found that the new product had no colorable differences from the product disclosed in the first ANDA, he modified the injunction to expressly cover the product of the new ANDA and held Apotex in contempt for violating the earlier injunction.
Apotex appealed to the Federal Circuit, arguing that the Hatch-Waxman Act did not confer jurisdiction on a district court to consider contempt proceedings for violating an injunction and that a contempt proceeding was an improper venue in which to determine infringement. Apotex also argued that an infringement determination can come only after a full trial under the Federal Rules of Civil Procedure.
A panel majority rejected both arguments and left undisturbed the district court’s decision to hold a contempt hearing and determine potential infringement by a new ANDA filing. The unanimous panel, however, reversed the district court’s contempt ruling, finding that the district court erred as a matter of law in interpreting the language of the original injunction. The Court stated that an injunction that is vague as to the proscribed conduct must be narrowly construed. The injunction in this case prevented Apotex from manufacturing, using, selling and offering for sale a commercial product in the United States. Apotex manufactured and used the product, but did so in Canada. Further, although the filing of a second ANDA constituted an artificial act of infringement under the Hatch-Waxman Act, the injunction did not expressly state that Apotex could not file a second ANDA. Therefore, the district court could not hold Apotex in contempt for violating the injunction. Practice Note: Considering the requirement that a court must construe injunctions narrowly when considering whether activities not expressly stated within the injunction violate that injunction, it behooves patent owners to not seek only broad injunctions but to carefully craft proposed language to specifically ask for exclusion of all potentially infringing activities.