Appealed from the United States District Court for the Northern District of Illinois, Judge Richard A. Posner 
| In Abbott Laboratories v. Torpharm, Inc., the Federal Circuit considered whether the district court had discretionary authority to entertain a contempt proceeding against the Defendants-generic drug manufacturers who the district court found had infringed Plaintiff Abbott's drug patents. Having found that the district court appropriately exercised its discretion, the Federal Circuit ruled that the district court had erred by finding Defendants in contempt. In this patent litigation, the allegedly infringing conduct involved the filing of two Abbreviated New Drug Applications ("ANDAs"). The district court (Judge Posner, sitting by designation), found that Defendants' first ANDA, filed in 1997, infringed Abbott's patents under 35 U.S.C. § 271(e)(2)(A). This district court accordingly entered an injunction prohibiting Defendants "from commercially manufacturing, using, selling, or offering to sell generic divalproex sodium which the Court has found to be infringing . . . ." After the district court's finding of infringement, Defendants attempted to design around Abbott's patents. Defendants then worked in concert with a third party to file a second ANDA in 2005. In response, Abbott filed new actions for infringement against both the third party and Defendants, and also filed a "Motion to Enforce Its Injunction Order" before Judge Posner. Judge Posner found Defendants in contempt for violating the injunction based on the second ANDA. He found that the new product did not differ from the original product (the subject of the first ANDA) and that the new product would therefore infringe Abbott's patent claims. Judge Posner extended the injunction to the new ANDA but did not impose sanctions. On appeal, Defendants argued that the Hatch-Waxman Act does not grant the district court subject matter jurisdiction to conduct contempt proceedings. Defendants also argued that the contempt proceedings were improper because infringement should have been decided at trial under the Federal Rules of Civil Procedure. The Federal Circuit found first that the district court had subject matter jurisdiction to entertain the contempt proceeding. The court found that Hatch-Waxman suits should be treated no differently than other infringement suits, and that "well-established principles of equity" give district courts the authority to enforce their own injunctions through contempt proceedings. The Federal Circuit next found that the district court did not abuse its discretion in holding a contempt proceeding. Contempt proceedings are not appropriate if "more than a colorable difference" exists between the original infringing product and the newly accused product. The Federal Circuit found that the district court did not abuse its discretion by finding that the subject matter of the first ANDA and the second ANDA had no colorable difference, and that the filing of the second ANDA would infringe Abbott's claims. As a result, the Federal Circuit found that the district court had discretionary authority to expand the original injunction to the second ANDA. The Federal Circuit disagreed with the finding of contempt, however, based on the language of the injunction. The injunction only prohibited Defendants "from commercially manufacturing, using, selling, or offering to sell generic divalproex sodium," not from filing a second ANDA. The accused conduct therefore did not fall within the plain terms of the injunction, and the Federal Circuit reversed the finding of contempt. Judge Dyk dissented, arguing that contempt proceedings were not appropriate. Citing the Supreme Court's 1885 decision in California Artificial Stone Paving Co. v Molitor, Judge Dyk argued that "contempt . . . should not be resorted to where there is fair ground of doubt as to the wrongfulness of the defendant's conduct." 113 U.S. 609, 618 (1885). In Judge Dyk's opinion, the majority's finding that Defendants did not violate the injunction required the conclusion that there was a "fair ground of doubt" as to whether Defendants' conduct was wrongful. Judge Dyk concluded that "[s]ummary contempt proceedings therefore were inappropriate." |