## Facts

- Celsis In Vitro, Inc. (Celsis) owned U.S. Patent No. 7,604,929 covering methods for preparing “multi‑cryopreserved” hepatocytes (liver cells) that can be frozen and thawed at least twice while maintaining greater than 70% viability after the final thaw.
- The claimed method generally involved: (1) starting with hepatocytes that have already been frozen and thawed, (2) using density‑gradient fractionation to separate viable from non‑viable cells, (3) recovering the viable cells, and (4) cryopreserving the recovered viable cells again to create the multi‑cryopreserved preparation.
- The claims also recited that the method achieves the preparation without requiring a density‑gradient step after the second thaw and without plating the cells between the first and second cryopreservations.
- The patented approach increased the supply of usable hepatocytes for research and enabled “pooled” products combining hepatocytes from multiple donors who died at different times.
- Celsis sold a pooled hepatocyte product, LiverPool, that it alleged practiced the ’929 patent.
- CellzDirect, Inc. and Invitrogen Corporation (later Life Technologies Corporation) sold pooled multi‑cryopreserved hepatocyte products that Celsis alleged were made using the patented method.
- Celsis sued for infringement in the U.S. District Court for the Northern District of Illinois and moved for a preliminary injunction to stop defendants’ sales during the litigation.
- The district court granted a preliminary injunction, and defendants took an interlocutory appeal to the Federal Circuit.

## Issues

1. Did the district court abuse its discretion in granting a preliminary injunction by finding Celsis likely to succeed on the merits, including by concluding defendants failed to raise a substantial question of invalidity (especially obviousness)?
2. Did the district court clearly err in finding that Celsis would likely suffer irreparable harm absent an injunction?
3. Did the district court abuse its discretion in weighing the balance of hardships and the public interest in favor of an injunction?

## Decision

- The Federal Circuit affirmed the preliminary injunction.
- The court held the district court did not abuse its discretion in finding a likelihood of success on the merits because defendants did not raise a substantial question that the asserted claims were invalid for obviousness on the record presented at the preliminary‑injunction stage.
- The court agreed that the evidence supported irreparable harm, including likely price erosion, loss of market share in a small market, harm to customer relationships and goodwill, and difficulty quantifying lost opportunities tied to a specialized research product.
- The court agreed that the balance of hardships favored Celsis, including because defendants proceeded in the market with notice of Celsis’s patent position.
- The court agreed that the public interest favored issuance of the injunction, emphasizing the general public interest in protecting patent rights where the record supports likely validity and infringement.
- Judge Gajarsa dissented, concluding that defendants raised a substantial question of obviousness that should have defeated preliminary injunctive relief.

## Legal Principles

- A patent preliminary injunction requires the movant to show: (1) likelihood of success on the merits, (2) likely irreparable harm without an injunction, (3) the balance of hardships favors the movant, and (4) the public interest favors an injunction.
- On appeal, the grant of a preliminary injunction is reviewed for abuse of discretion; underlying factual findings are reviewed for clear error; legal conclusions are reviewed de novo.
- At the preliminary‑injunction stage, an accused infringer can defeat the “likelihood of success” showing by raising a substantial question as to infringement, validity, or enforceability.
- In assessing obviousness at this stage, the court may consider whether the prior art taught away from the claimed combination and whether the patentee showed unexpected results and objective evidence such as commercial success or industry praise.
- Evidence of likely price erosion, loss of market share, and damage to goodwill and customer relationships—especially in a limited, specialized market—can support a finding that monetary damages may not adequately remedy the harm.
- When a competitor enters the market with knowledge of the asserted patent, a district court may give reduced weight to hardships that flow from being enjoined.

## Conclusion

The Federal Circuit affirmed the district court’s preliminary injunction because the record supported findings that Celsis was likely to prove infringement and withstand defendants’ obviousness challenge at the preliminary stage, that continued competition threatened non‑compensable harms such as price erosion and loss of goodwill in a small research market, and that the equities and public interest favored maintaining the status quo while the case proceeded.


Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922 (2012)