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Federal Circuit Finds Teva Liable for Induced Infringement

Generic drugs can’t
Promote patented uses
In their marketing

The Federal Circuit has reinstated a jury’s verdict finding that Teva infringed GlaxoSmithKline’s

(GSK’s) patented method of using its Coreg® product.

GSK sued Teva for infringement of its Reissue Patent No. RE40,000, based on a compound originally patented in 1985.

As the court noted,

GSK markets and sells the medicinal product carvedilol, a beta-blocker, under the brand name Coreg®. The Food and Drug Administration (FDA) has approved carvedilol for three indications of use. By 1997, the FDA had approved carvedilol for treatment of hypertension and congestive heart failure (CHF). Then, in 2003, the FDA approved carvedilol for a third use: to reduce cardiovascular mortality in patients suffering from left ventricular dysfunction following a myocardial infarction, i.e., the “post-MI LVD” indication. …

In March 2002, Teva filed an Abbreviated New Drug Application (ANDA) for FDA approval of its generic carvedilol for all three indications. It certified, under Paragraph III of the Hatch-Waxman Act,1 that it would not launch its product until the ’067 patent on the carvedilol compound expired in March 2007.

The Hatch-Waxman Act allows generic drug companies (like Teva) to omit from their product labeling approved indications that are covered by the original inventor’s patents, and which are on the labeling for the original versions of the drugs. These abbreviated labels are called “skinny labels” and they can be used to support a defense of non-infringement.

After the jury’s verdict of infringement and its award of damages, the district court granted Teva’s motion for judgment as a matter of law of non-infringement. The Federal Circuit vacated this judgment.

Under 35 U.S.C. § 271(b), “Whoever actively induces infringement of a patent shall be liable as an infringer.”

As the court noted,

A finding of inducement requires establishing “that the defendant possessed specific intent to encourage another’s infringement.” … This requires a plaintiff to show “that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.”

GSK argued that there were indications on Teva’s labels that instructed doctors to prescribe the drug in a way that violated GSK’s patent rights.

The court pointed out that

Our precedent has consistently held that, when a product is sold with an infringing label or an infringing instruction manual, such a label is evidence of intent to induce infringement.

Also, the court found that Teva had marketed its product in a way that encouraged infringement:

As this record reflects, … substantial evidence supports that Teva actively induced by marketing a drug with a label encouraging a patented therapeutic use. They did not “omit[] all patented indications” or “merely note[] (without mentioning any infringing uses) that FDA had rated a product as therapeutically equivalent to a brand-name drug.”

The court agreed with GSK that

substantial evidence supports the jury’s verdict that Teva’s partial label encouraged an infringing use … and that Teva’s marketing materials encouraged prescribing carvedilol in a manner that would cause infringement of the ’000 patent.

The decision is potentially important in the generic pharmaceutical and biosimilar industries.

An important takeaway is that a generic drug maker must take extra care not to mention any infringing uses on its “skinny” labels and not mention such infringing uses in its marketing materials.

As Bloomberg reports, the decision makes things more difficult for generic drug makers:

“It’s going to force them to be much more careful,” Dmitry Kashtedt, a George Washington University law professor, said. “This opinion makes clear that a label, if it’s not particularly carefully written, even if it tries to avoid infringing, it can still be read as a user manual, which is a classic way to induce infringement.”

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