Addressing a preliminary injunction filed by a defendant in a declaratory judgment action, the U.S. Court of Appeals for the Federal Circuit vacated and remanded a lower court’s denial of a preliminary injunction on claim construction grounds, stating that equitable factors needed to be addressed on remand.  Aria Diagnostics, Inc. v. Sequenom, Inc., Case No. 12-1531 (Fed. Cir. Aug. 9, 2013) (Rader, C.J.)

Aria sought a declaration that its fetal DNA diagnostic test did not infringe any claim of Sequenom’s exclusively licensed patent.  Sequenom counter-claimed for infringement and sought a preliminary injunction to prevent Aria from making, using or selling its test.  The asserted claim recited “[a] method for detecting a paternally inherited nucleic acid of fetal origin” in a pregnant woman’s blood.  The claimed method comprised the step of “amplifying” the paternally inherited nucleic acid.  After construing these and other claim terms, the district court found a substantial question of non-infringement and denied Sequenom’s motion for a preliminary injunction.

The Federal Circuit vacated the ruling, finding that the lower court read additional limitations into the claims without finding justification in the plain claim language or intrinsic evidence.  These errors were so apparent, the Federal Circuit indicated, that it need not address “flexibility” in case law setting out the proper standard of review for claim construction in the context of a preliminary injunction.  The Federal Circuit nonetheless acknowledged a difference in authority on the issue.

The Federal Circuit reasoned that the paternally inherited nucleic acid that forms the object of the patent’s independent claims need not be “known in advance,” as the district court had decided.  The patentee could have so limited the claims by adding those words to the claim language, yet it did not.  The Federal Circuit further explained that “it is ‘not enough that the only embodiments, or all of the embodiments, contain a particular limitation to limit a claim term beyond its ordinary meaning.’”

The Federal Circuit also reasoned that “amplifying” a paternally inherited nucleic acid—as that term arose in the claims—required only that the amount of the paternally inherited DNA increase.  The Federal Circuit found that the district court erred by defining “amplifying” to require an increase in the proportion of paternally inherited nucleic acid relative to other DNAs in a blood sample.  The Federal Circuittook a strict view of the requisite claim terms, noting that those terms did not specifically state that “amplif[ication]” affected the relative quantity of other DNAs present in the sample.  The Federal Circuit placed an emphasis on claim language primacy.

Finally, turning to the issues directly related to injunctive relief, the Federal Circuit took issue with the district court’s analysis of the Winter v. Natural Resources Defense Council balancing test.  That Supreme Court of the United States test considers whether, on balance, four factors weigh in favor of imposing a preliminary injunction: (i) the movant’s likelihood of success on the merits, (ii) the likelihood that the movant will suffer irreparable harm, (iii) the balance of equities, and (iv) the public interest.  Here the Federal Circuit dispensed the following remand instructions:

• It rejected the lower court’s assumption that damages could compensate Sequenom for any loss of market share or price erosion as lacking supporting factual findings.  The Federal Circuit explained that, “[i]n the face of that kind of universal assumption, patents would lose their character as an exclusive right as articulated by the Constitution and become at best a judicially imposed and monitored compulsory license.”

• On the relative importance of whether a preliminary injunction would put Aria Diagnostics out of business, the Federal Circuit demanded an equally sympathetic look at harms potentially visited on Sequenom: “this court has seen no comparison of difficulties or losses [Aria] might experience weighed against the harms Sequenom might suffer without protection of its legal exclusive rights.”

• After taking judicial notice of a new fact tending to show that an injunction was not contrary to the public interest, the Federal Circuit instructed the district court on remand to consider “this and other evidence pertaining to the public interest anew.”