## Facts

- Eli Lilly and Company owned U.S. process patents covering steps to synthesize a cephalosporin intermediate known as “Compound 6,” used in one route to make the antibiotic cefaclor.
- Biochimica Opos, S.p.A. manufactured cefaclor abroad and sold it to U.S. distributors (American Cyanamid, Biocraft, and Zenith) for importation and sale in the United States.
- Lilly alleged Opos used Lilly’s patented process to make Compound 6 during foreign manufacture, making the imported cefaclor infringing under 35 U.S.C. § 271(g).
- Section 271(g) imposes liability for importing a product made by a U.S.-patented process, but excludes liability if the product made by the patented process is “materially changed” by subsequent processes (or becomes a trivial and nonessential component).
- At the preliminary-injunction stage, the district court found that, even assuming Compound 6 was made by the patented process, it underwent multiple later reaction steps before becoming cefaclor and was materially changed in structure and function.
- The district court denied Lilly’s motion for a preliminary injunction, finding insufficient likelihood of success on the merits and insufficient proof of irreparable harm.
- Lilly appealed the denial to the Federal Circuit.

## Issues

1. Whether the district court abused its discretion in finding Lilly unlikely to succeed on its § 271(g) infringement theory given the “materially changed” exception.
2. Whether the district court clearly erred in finding Lilly failed to show irreparable harm absent a preliminary injunction.
3. Whether, under the four-factor preliminary-injunction test, denial of preliminary relief was warranted on the record developed at the evidentiary hearing.

## Decision

- The Federal Circuit affirmed the district court’s denial of a preliminary injunction.
- The court held Lilly did not meet the burden to overturn the denial of preliminary relief under abuse-of-discretion review.
- The court accepted the district court’s conclusion that Lilly had not shown a sufficient likelihood of success under § 271(g), in light of evidence that the patented-process output (Compound 6) was materially changed before importation of cefaclor.
- The court also upheld the district court’s determination that Lilly did not establish irreparable harm.
- A concurring opinion agreed in the affirmance while emphasizing additional analysis concerning § 271(g) and “materially changed” for chemical intermediates.

## Legal Principles

- A preliminary injunction is an extraordinary remedy; the movant must show (1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships in its favor, and (4) that the public interest supports relief.
- Denial of a preliminary injunction is reviewed for abuse of discretion; reversal requires a clear error of judgment, legal error, or clearly erroneous factual findings.
- Under 35 U.S.C. § 271(g), importing a product made by a U.S.-patented process can infringe, but there is no liability if the product made by the patented process is materially changed by subsequent processes before importation.
- Failure to establish either likely success on the merits or irreparable harm independently supports denial of preliminary injunctive relief.

## Conclusion

The Federal Circuit affirmed denial of preliminary injunctive relief because the district court reasonably found that the accused imported cefaclor was likely outside § 271(g) due to material changes from the patented-process intermediate and that Lilly did not prove irreparable harm warranting an injunction.


Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568 (Fed. Cir. 1996)