Case Update: CryoLife Appeals Preliminary Injunction to Declaratory Judgment Defendant in Patent Case

CryoLife, Inc. has appealed the preliminary injunction recently issued against it in the United States District Court for the District of Delaware barring sales of its PerClot Topical blood-clotting powder product. CryoLife Inc. v. C.R. Bard Inc. et al., Dkt. Entry No. 121, Notice of Appeal. CryoLife has asked United States Court of Appeals for the Federal Circuit to review the district court’s grant of a preliminary injunction based on CryoLife’s failure to present (1) an alternative non-infringement argument based on Medafor, Inc.’s proposed claim construction and (2) expert analysis to support its invalidity contentions. As security, Medafor has agreed to pay CryoLife $100,000 if the injunction is overturned.

CryoLife originally sought a declaratory judgment that PerClot, brought to market in Fall 2014, did not infringe on Medafor’s Arista, approved in 2006. Both products are powders used to control bleeding. In turn, Medafor sought a preliminary injunction. As we discussed last month, the district court sided with Medafor, enjoining CryoLife’s sale of PerClot—a rare event in a patent case.

The court found that Medafor had shown likely success on the merits of patent infringement and irreparable harm if CryoLife’s product remained on the market. As we noted previously, the injunction demonstrates the risks in failing to present infringement arguments under both parties’ claim constructions (“CryoLife has offered no non-infringement arguments using Medafor’s constructions.”) or to present expert analysis on the issue of invalidity (“CryoLife supports its anticipation and obviousness arguments with reference to a table of invalidity contentions and the barest of attorney argument.”). CryoLife Inc. v. C.R. Bard Inc. et al., Dkt. Entry No. 116, Mem. Order at 5.

On April 1, 2015, CryoLife filed its notice of appeal with the Federal Circuit, the day after the district court entered its Order on Preliminary Injunction. In that order, the court directed that Medafor must pay Cryolife $100,000 in the event that a court finds the preliminary injunction to have been wrongful. This requirement flows from Federal Rule of Civil Procedure 65(c), which provides, “[t]he court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” In the order, the parties stipulated and the court found that Medafor’s representation that it could pay $100,000 in the event the injunction is overturned—a representation with which CryoLife agreed—was adequate security.

Gibbons will continue to monitor developments relating to this preliminary injunction and appeal.

Calvin K. May is an Associate in the Gibbons Business & Commercial Litigation Department. Samuel H. Megerditchian, Counsel in the Gibbons Intellectual Property Department, co-authored this post.