Induced Infringement
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The Skinny Label That Wasn’t—Federal Circuit Reinstates Induced Infringement Verdict

The US Court of Appeals for the Federal Circuit vacated the district court’s grant of judgment as a matter of law (JMOL) of non-infringement where substantial evidence supported the jury’s verdict of induced infringement by an attempted “skinny label” that nonetheless encouraged doctors to engage in a patented use. GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., Case Nos. 18-1876, -2023 (Fed. Cir. Aug. 5, 2021) (Moore, C.J.) (Prost, J., dissenting).

GlaxoSmithKline LLC (GSK) sells a drug called carvedilol (brand name Coreg®), which is approved for three indications: Hypertension, congestive heart failure (CHF) and left ventricular dysfunction following a myocardial infarction (post-MI LVD). In 2002, Teva filed an abbreviated new drug application (ANDA) for US Food and Drug Administration (FDA) approval of its generic carvedilol for all three indications. At that time, GSK’s patent on the carvedilol compound was still in force; Teva certified that it would not launch its product until the patent expired in 2007. GSK also had a second patent on a method of treating CHF using carvedilol and a second agent. In 2002, Teva sent GSK a Paragraph IV notice contending that the claims of that patent were invalid over prior art. Rather than sue Teva, GSK applied for reissue of the patent. In 2004, Teva received FDA “tentative approval” for its ANDA “for the treatment of heart failure and hypertension,” which was to become effective at the expiry of the compound patent in 2007.

In January 2008, the method-of-use patent reissued with claims directed to a method of decreasing mortality caused by CHF by administering carvedilol with at least one other therapeutic agent. Just before its launch in 2007, Teva certified to the FDA that its label would not include the indication listed in the Orange Book as covered by the original method-of-use patent (i.e., “decreasing mortality caused by congestive heart failure”), and thus included only the hypertension and post-MI LVD indications. Teva’s press releases stated that its generic carvedilol was “indicated for treatment of heart failure and hypertension.” In 2011, the FDA asked Teva to revise its labeling to be identical with GSK’s. Teva obliged (listing again the CHF indication) and took the position that it did not need to provide certification for the reissued patent because it received final approval of its ANDA before the patent reissued. GSK sued.

GSK won a jury verdict that the challenged patents had not been shown to be invalid and that Teva was liable for induced infringement. At trial, GSK contended—and the jury heard evidence—that post-MI LVD is a form (and fell within the Court’s construction) of CHF such that Teva’s attempted skinny label nonetheless encouraged doctors to engage in a patented use. After trial, however, the district court granted JMOL of non-infringement because the CHF and post-MI LVD indications were different. On appeal, the Federal Circuit found that substantial evidence supported the implied jury, finding that post-MI LVD is a form of CHF such that the label with the post-MI LVD indication induced infringement of the reissued [...]

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The Future of Skinny Labeling in Patent Litigation Will be Reconsidered

The US Court of Appeals for the Federal Circuit has now vacated its prior ruling finding induced infringement based on so-called skinny labeling on a pharmaceutical product. GlaxoSmithKline LLC v. Teva Pharmaceuticals USA Inc., Case no.18-1876 (Fed. Cir. Feb. 9, 2021) PER CURIAM. The case concerns communications regarding generic approvals and “skinny labels,” which permit companies to sell pharmaceutical products that omit certain patented uses.

On Oct. 2, 2020, a panel of the Federal Circuit (PROST, C.J ., NEWMAN and MOORE, JJ.) issued an opinion finding that Teva induced infringement of a patent covering GlaxoSmithKline’s (GSK’s) drug Coreg® (carvedilol). In a per curiam Order, the Court has now vacated that opinion and set a new round of oral arguments that was held on February 23.

Teva had requested an en banc rehearing the case, which was denied in the Order vacating the Oct. 2, 2020 opinion while ordering panel rehearing limited to the following issue:

Whether there is substantial evidence to support the jury’s verdict of induced infringement during the time period from January 8, 2008 through April 30, 2011.

Background

GSK’s patent covers a method of using carvedilol, the active ingredient in Coreg®, for the treatment of congestive heart failure. In 2007, the FDA approved Teva’s application to market generic carvedilol tablets. To obtain that approval prior to the expiration of the patent (or prevailing on noninfringement, invalidity, or unenforceability of the patent in litigation), Teva had “carved out” certain patent-protected left ventricular dysfunction uses and only included claims to treat hypertension, i.e., claims not covered by the GSK patent. That original patent expired in 2007, but it was reissued in 2008.

Teva had deliberately omitted congestive heart failure in its label until the FDA made it add that indication in 2011. In accordance with the Order, the February 23 oral argument focued on alleged infringement in the period before the label change, i.e., the period 2008 and 2011. The outcome is expected to turn on associated activities and statements made by Teva that went beyond the approval of the generic drug with skinny labeling, where Teva did not explicitly claim that their product was for the patent-protected uses.




Federal Circuit Restores Induced Infringement Verdict Against Teva

Addressing the issue of whether a generic pharmaceutical company can be found to induce infringement even when all patented uses have been “carved out” of the label (resulting in a so-called “skinny label”), the US Court of Appeals for the Federal Circuit held that circumstantial evidence of inducement was sufficient. The Court relied on evidence that defendant stated its drug was a “complete replacement” for plaintiff’s drug covered by the asserted patent. GlaxoSmithKline LLC et al. v. Teva Pharmaceuticals USA Inc., Case Nos. 18-1976, -2023 (Fed. Cir. Oct. 2, 2020) (Newman, J.) (Prost, C.J., dissenting). The Court reinstated a jury verdict against Teva Pharmaceuticals, ordering it to pay GlaxoSmithKline (GSK) $235 million.

GSK brought suit against Teva in 2014 in response to Teva’s attempt to market a generic form of carvedilol, developed and marketed by GSK under the brand name Coreg®. Coreg® was US Food and Drug Administration (FDA) approved for three separate indications: hypertension, congestive heart failure (CHF), and left ventricular dysfunction following a myocardial infarction (post-MI LVD). After March 2007, however, no GSK Orange-Book-listed patent covered the hypertension or post-MI LVD indications. A reissue patent that issued in January 2008 remained in force for CHF.

In 2002, Teva filed an abbreviated new drug application (ANDA) with the FDA. Before Teva’s carvedilol product was finally approved in September 2007, Teva amended its ANDA and proposed label to “carve out” the CHF indication according to 21 USC § 355(j)(2)(A)(viii)—often referred to as a “section viii carve-out.” Thus, Teva’s carvedilol “skinny label” was only indicated for hypertension and post-MI LVD, neither of which was, at that time, covered by any GSK patent.

After a trial, the jury found that Teva had willfully induced infringement of GSK’s patent and awarded GSK $235 million in damages. The district court then granted Teva’s motion for judgment as a matter of law, concluding that the inducement verdict was not supported by substantial evidence. GSK, the district court reasoned, had failed to prove by a preponderance of the evidence that Teva’s alleged inducement (as opposed to other factors) had actually caused even at least one physician to prescribe generic carvedilol for CHF. GSK appealed.

On appeal, the Federal Circuit overturned the grant of judgment as a matter of law, reasoning that the “intent element” of inducement may be proven through circumstantial evidence. The Court noted that the jury had received evidence of, e.g., “Teva’s promotional materials [referring] to Teva’s carvedilol tablets as AB rated equivalents of the Coreg® tablets,” press releases identifying Teva’s product as “Generic Coreg® Tablets,” Teva’s Monthly Prescribing References, and testimony from GSK’s cardiologist witness that physicians are “completely reliant” on information provided by the generic companies. The majority concluded that this was “ample record evidence . . . to support the jury verdict of inducement.”

Chief Circuit Judge Prost authored a lengthy dissent warning of the broad implications of the majority’s ruling, including contravening the congressional design and intent of the generic approval system, and potentially stifling innovation by giving rise to [...]

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