CAFC Affirms Preliminary Injunction Against Myco Industries, Finding No Clear Error or Abuse of Discretion

On February 3, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed a preliminary injunction granted by the U.S. District Court for the Eastern District of Michigan, holding that the trial court did not abuse its discretion or clearly err in its factual findings.

Myco Industries, Inc. started marketing, the AB Max, a device for treating blepharitis in February 2019. The following month, BlephEx, LLC filed a patent application, which issued as U.S. Patent No. 10,449,087 (the ‘087 patent) on October 22, 2019. The ‘087 patent discloses “an instrument for removing debris from an eye during the treatment of an ocular disorder.” The day the ‘087 patent issued, BlephEx sued Myco in the Eastern District of Michigan, alleging that Myco’s AB Max infringed claim 16 of the ‘087 patent. Shortly thereafter, the district court enjoined “Myco and those acting on its behalf from, inter alia, selling, distributing, or offering to sell or distribute the AB Max Product.” Myco appealed.

The ‘087 Patent

According to the ‘087 patent, blepharitis treatment historically involved self-administered, at-home treatment “in which the patient would physically scrub the eyelid margin with a cotton swab, fingertip, or scrubbing pad to remove debris, oil, and scurf.” However, the ‘087 patent states that “patients routinely fail to totally cleanse” the eyelid with this home-treatment method. To solve this problem, the inventor of the ‘087 patent disclosed “a swab attached to an electromechanical device for eyecare professionals to use to clean patients’ eyelid margins and eyelashes.”

Preliminary Injunction Affirmed

The district court concluded that all factors weighed in favor of granting BlephEx’s motion for a preliminary injunction, finding that “(1) BlephEx had a strong likelihood of success on the merits; (2) BlephEx would suffer irreparable harm in the absence of preliminary relief; (3) preliminary relief would not unduly harm others; and (4) an injunction would serve the public interest.” Further, the district court noted that BlephEx established that its infringement claims had a strong likelihood of success. Additionally, the court found Myco failed to demonstrate a substantial question of patentability for the ‘087 patent.

Myco raised three main arguments on appeal. First, Myco argued that it presented a substantial question of the validity of claim 16 of the ‘087 patent on both grounds of obviousness and anticipation. Additionally, Myco argued that the preliminary injunction upset the status quo and that it was overbroad. Ultimately, the Federal Circuit affirmed the injunction finding the district court did not abuse its discretion or commit clear error in any of its factual findings.

Patentability

Myco urged the CAFC to vacate the injunction because, in its view, claim 16 of the ‘087 patent is vulnerable to an invalidity challenge based on U.S. Pat. Pub. No. 2013/0031768 (Nichamin). Myco argued that it did present a substantial new question of anticipation based upon Nichamin Figures 2 and 3, which in its view depict a single embodiment. The CAFC was unpersuaded, concluding that the district court did not clearly err in finding that Figures 2 and 3 depict separate embodiments. The CAFC reasoned that since “neither figure shows ‘a swab operably connected to an electromechanical device’ where the swab contacts a portion of the eyelid margin as required by claim 16, Myco’s argument that Figures 2 and 3 depict the same anticipating embodiment fails to raise a substantial question of validity.” Citing Net MoneyIN, the CAFC noted “it is not enough that the prior art reference…includes multiple, distinct teachings that the artisan might somehow combine to achieve the claimed invention to show anticipation.” Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008).

In its reply, Myco for the first time argued that a prior art reference that lacks “an express discussion of the actual combination” “may still anticipate if that reference teaches that the disclosed components or functionalities may be combined and one of skill in the art would be able to implement the combination.” The CAFC did not consider this argument because it was not presented to the district court and therefore not preserved for appeal. However, the CAFC did signal that this argument would not be persuasive even if raised in the lower court.

Myco also argued that that the level of skill in the art is “extremely high,” agreeing with BlephEx that an ordinary artisan would possess a doctorate degree with at least two to five years of experience. Therefore, Myco asserted that the “highly skilled ordinary artisan would ‘at once envisage’ the claimed combination from Nichamin’s teaching.” The CAFC was unconvinced, reasoning that “mere supposition” about what a highly skilled artisan may do is not sufficient to establish a substantial question of patentability.

Next, Myco asserted that the “applicator” found in Figure 3 of Nichamin can be a swab. However, the CAFC concluded that “[n]one of the paragraphs identified by Myco on appeal describe a swab that is both operably connected to an electromechanical device and used to contact the eyelid margin as required by claim 16” of the ‘087 patent. Therefore, it was not a clear error for the lower court to also come to this conclusion.

It was also Myco’s contention that the district court improperly deferred to the patent examiner in noting the patent examiner considered Nichamin during prosecution of the ‘087 patent. The CAFC found this argument “unavailing.” Citing Stone Basket Solutions, the court explained “when prior art ‘is listed on the face’ of a patent, ‘the examiner is presumed to have considered it.” Stone Basket Innovations, LLC v. Cook Med. LLC, 892 F.3d 1175, 1179 (Fed. Cir. 2018).

Obviousness

In addition to its allegation of anticipation, Myco urged the CAFC to find, based on Nichamin’s description, that it would have been obvious to one skilled in the art to attach a swab to the device disclosed in Nichamin. The CAFC noted Myco offered no evidence to support its contention and provided no additional explanation. Myco argued that “common sense” would have led one skilled in the art to “use a swab with Nichamin’s device,” therefore no evidence beyond the reference itself was necessary. The CAFC recognized that generally expert testimony is not required at the preliminary injunction stage, or even beyond if the technology is simple enough. However, according to the CAFC, this was not the case here. Myco repeatedly argued that the level of skill in the art is high it, and that this therefore lowered its burden to show obviousness at trial and at the preliminary injunction stage. This, the CAFC reasoned is incorrect, noting Myco did not provide anything beyond “conclusory attorney argument” in support of its obviousness claim. While the CAFC did not find expert testimony to be required, it did explain that more than the conclusory arguments presented was required.

Status Quo

Myco’s status quo argument rested on the idea that the purpose of a preliminary injunction is to preserve the status quo, but here, the preliminary injunction upset the status quo. In Myco’s view, the status quo was “the state of the world before the ‘087 patent issued,” that is, “a market where both BlephEx and Myco competed and sold their products” and where BlephEx could not assert infringement of claim 16 because it had not been granted.

The CAFC rejected Myco’s characterization of the status quo, reasoning that the ‘087 patent was granted before BlephEx filed suit against Myco. Therefore, “the status quo when the preliminary injunction was filed was a state in which the ‘087 patent had been granted and could be asserted.” To further rebuff Myco’s contention, the CAFC recognized that maintaining the status quo is not the sole purpose of preliminary injunctions. Citing Atlas Powder Co., the CAFC explained “preliminary injunctions also serve to prevent ongoing trespasses during the pendency of an infringement case”. See Atlas Powder Co. v. Ireco Chems., 773 F.2d 1230, 1232 (Fed. Cir. 1985). Similarly, the CAFC reasoned, maintenance of the status quo does not override the four preliminary injunction factors, rather it is inherent in the consideration of the four factors, but in some cases preliminary injunctions will justifiably upset the status quo. Therefore, the CAFC concluded that the district court appropriately considered the status quo in its analysis.

Scope

Lastly, Myco argued that the preliminary injunction was overbroad because it enjoined all U.S. sales of the AB Max product even though BlephEx only asserted infringement to one method of use. Myco urged that the injunction should only prevent “Myco from instructing or encouraging users to use the AB Max to contact the eyelid margin to remove debris.” The CAFC also rejected this argument, finding that though Myco alleged the AB Max may be used for non-infringing purposes, it provided no evidence that it has ever actually been used for such purposes. Therefore, the CAFC concluded that the district court did not abuse its discretion in barring all domestic sales. Accordingly, the CAFC affirmed the preliminary injunction.

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