The U.S. Court of Appeals for the Federal Circuit recently addressed a multitude of issues and vacated an injunction against Abbott Laboratories while upholding in part a ruling that Abbott infringed an Innogenetics patent for detecting and classifying hepatitis C virus genotypes. Innogenetics, N.V. v. Abbott Laboratories, Case Nos. 07-1145, -1061 (Fed. Cir., Jan. 17, 2008) (Moore J.).

Innogenetics’ patent claims a method of genotyping hepatitis C virus (HCV) based on distinct genetic sequences that can be found in the 5 prime untranslated region (5’ UTR) of the HCV genome. Innogenetics sued Abbott, asserting that Abbott’s genotyping assay kits infringe its claims.

After the district court granted summary judgment of literal infringement and excluded proffered evidence regarding Abbott’s obviousness and anticipation defenses, it also granted a judgment as a matter of law (JMOL) that a prior art patent did not anticipate claim 1 of the ’704 patent and granted a permanent injunction, Abbott appealed. Innogenetics cross-appealed, challenging the district court’s JMOL overturning the jury verdict of willful infringement.

The Federal Circuit agreed with the district court’s construction of the claim limitation “detecting a complex as formed” as detecting the formation of probe-target complexes, regardless of whether the method detects the hybridized complex itself or through fluorescence emitted immediately after it is destroyed. As a result, the Court also affirmed the JMOL entered against Abbott for literal infringement, finding that Abbott had not raised any plausible arguments on appeal. The Court next concluded that the district court did not abuse its discretion in precluding Abbott’s expert’s testimony on obviousness which was vague, conclusory and did not offer any motivation for one skilled in the art to combine the particular references to practice the claimed method. The Court also found that the district court had not abused its discretion in denying Abbott a new trial on the issue of obviousness, even in the face of the lower court’s inaccurate preclusion order. Applying Seventh Circuit law, which requires a “miscarriage of justice” or a verdict that, on the record, “cries out to be overturned or shocks our conscience,” the Court found that Abbott had not offered a satisfactory explanation for waiting until the conclusion of trial to alert the court to the inaccurate order and only ordered speculation with regard to the evidence a new expert would have proffered. The Federal Circuit also affirmed the restriction placed on Abbott’s anticipation expert testimony because disclosure of an anticipatory prior art reference on the very last day of discovery had stripped Innogenetics of any meaningful opportunity to prepare a rebuttal.

However, the Court remanded for a new trial on the question of anticipation, finding that the lower court had improperly precluded Abbott’s anticipation expert testimony on the basis that the expert was using a different definition of “method of genotyping” when the meanings were the same except for semantic differences. As for the cross-appeal, the Court affirmed the grant of JMOL of no willful infringement, citing Seagate and the lack of “objective recklessness” in Abbott’s development and sale of its genotyping products. Finally, the Court noted that the reasonable royalties awarded to Innogenetics included an upfront entry fee that contemplates or is based upon future sales by Abbott in a long term market. The Court likened this running royalty to a “compulsory license” and vacated the district court’s grant of a permanent injunction prohibiting future sales of Abbott’s genotyping assay kits.