The Federal Circuit recently held[1] in a 2-1 decision that there was substantial evidence supporting a jury finding that Teva was liable for induced infringement for an indication carved out of its skinny label for its generic version of carvedilol.

The case concerned GSK’s United States Patent No. 4,503,067 (“the ’067 patent”) and Reissue Patent No. RE40,000 (“the ’000 patent”). The ’067 patent covers carvedilol and related compounds, and expired March 5, 2007.  The FDA initially approved carvedilol for hypertension, and GSK marketed it under the brand name Coreg®.  In May 1997, the FDA approved carvedilol for congestive heart failure (“CHF”). The method was patented in the ’000 patent, which reissued in January 2008 and claims a method of decreasing mortality caused by CHF by administering carvedilol together with one or more of an ACE inhibitor, a diuretic, or digoxin.  In 2003, the FDA approved this same combination for use by patients suffering from left ventricular dysfunction following a myocardial infarction.

In March 2002, Teva applied for FDA approval for its generic carvedilol, certifying in its ANDA under Paragraph III of the Hatch-Watch Waxman Act that it would not launch its product until after the ’067 patent expired in March 2007.  Teva received tentative approval in 2004 for its generic for treatment of left ventricular dysfunction following myocardial infarction and hypertension after the expiration of the ’067 patent.  Upon the expiration of the ’067 patent, Teva launched its generic carvdilol with a skinny label indicating only left ventricular dysfunction following myocardial infarction and hypertension.  Teva’s press releases and marketing materials stated that its carvedilol was an AB-rated generic of Coreg® tablets.

In 2011, the FDA required Teva to amend its label to be identical to Coreg®’s labeling, and Teva amended its label to include the indication for treatment of CHF.  In response, GSK filed suit alleging infringement of the ’000 patent during both the 2008-2011 “skinny label” period and during the post-amendment “full label” period.

Teva argued that since it had carved out CHF from its initial 2007 label, citing the carve-out authorization in 21 U.S.C. § 355(j)(2)(A)(viii), it could not be found to induce prescribing physicians to infringe the ’000 patent, at least not before Teva amended its label.  However, the jury found that Teva induced infringement of the ’000 patent both before and after amending its label to add CHF as an indication as required by the FDA.

The district court granted Teva’s motion for judgment as a matter of law (JMOL), finding that the jury’s verdict was not supported by substantial evidence for either the skinny- or full-label periods.  The district court found that GSK failed to prove that Teva’s alleged inducement—as opposed to other factors such as information from sources available to physicians (e.g., the American Heart Association, the American College of Cardiology, and various publications) and GSK’s Coreg® Label—actually caused physicians to directly infringe by prescribing generic carvedilol for CHF.  The district court noted that cardiologists had testified that they knew of the various uses of carvedilol before the FDA required Teva to amend its label.  As a result, the district court held that a reasonable factfinder could only have found that these alternative, non-Teva factors were what caused the doctors to prescribe generic carvedilol for an infringing use, during both the skinny- and full-label periods.

The Federal Circuit reversed the JMOL as to both time periods.  The Federal Circuit cited trial evidence, including Teva’s press releases and product catalogs, showing that Teva’s marketing during the skinny label period did not differentiate the uses for which its product was approved compared to Coreg®.  GSK’s experts testified that such marketing would lead doctors to believe that Teva’s carvedilol product was approved for the same uses as GSK’s product, including CHF.

Regarding the district court’s reasoning that “physicians already knew how to use carvedilol for treating CHF” and thus infringement was not “caused” by Teva, the Federal Circuit stated that “[t]he district court applied an incorrect legal standard, for precedent makes clear that when the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met.”  The Federal Circuit also noted the content of an FDA-approved label can be used to establish inducement to infringe, without clarifying whether its statement referred to the skinny label or the later full label.  The Federal Circuit found, based on the totality of the trial record, that the jury had substantial evidence to support the jury’s conclusion that Teva intended to induce doctors to prescribe Coreg® to treat CHF as claimed in the ’000 patent.  The court remanded the case to the district court for reinstatement of the jury verdicts of infringement and damages.

Chief Judge Prost dissented, stating that the majority’s decision undermined Congress’s purpose for the generic approval system “by allowing a drug marketed for unpatented uses to give rise to liability for inducement and by permitting an award of patent damages where causation has not been shown.”  The dissent emphasizes that “no communication from Teva encouraged doctors to use generic carvedilol to practice the patented method.”

This case raises issues over the extent to which generic manufacturers can rely on a skinny label to avoid a finding of induced infringement.  The holding indicates that mere marketing of a generic drug as “AB-rated” or equivalent to a branded product may lead to a finding of inducement where the branded drug is approved for a patented use that has been carved out of the generic/biosimilar’s label.  Generic and biosimilar manufacturers may wish to consider taking affirmative steps to inform physicians that their product is not approved for the patented use in order to reduce the likelihood of finding inducement.