On May 15, 2023, the United States Supreme Court denied certiorari in Teva Pharmaceuticals USA, Inc. v. GlaxoSmithKline LLC,1 a case pertaining to the practice of “skinny labeling” by generic drug manufacturers whereby the generic omits patented uses from its label and instead seeks approval only for unpatented uses to avoid liability for infringement. The question presented to the Court was:
If a generic drug’s FDA-approved label carves out all of the language that the brand manufacturer has identified as covering its patented uses, can the generic manufacturer be held liable on a theory that its label still intentionally encourages infringement of those carved-out uses?
While the High Court’s decision is significant for refusing to consider such a high-profile case that some—including Teva and the U.S. Solicitor General—argue has enormous implications for generic pharmaceutical manufacturers, others agree with GSK that the Federal Circuit’s decision was simply the product of a highly factual record and hardly “eviscerates” the concept of induced infringement.3
GlaxoSmithKline (“GSK”) owns U.S. Patent No. 5,760,069 (“’069 Patent”), which covers a method of treating congestive heart failure using the branded drug product Coreg®. In 2007, generic pharmaceutical company Teva Pharmaceuticals (“Teva”) filed an ANDA seeking approval to market a generic version of Coreg®, along with a section viii statement4 carving out portions of the existing label related to the patented method of treating congestive heart failure.
In 2014, GSK filed suit against Teva in the U.S. District Court for the District of Delaware alleging induced infringement. The complaint alleged, inter alia, that despite the carved-out skinny label, Teva’s actions of marketing and distribution induced doctors to prescribe the generic drug for the patented indication of congestive heart failure, thus supporting GSK’s claim of infringement of the ’069 patent.5 A Delaware jury sided with GSK, awarding the pharmaceutical company a $235 million verdict.6
Following post-trial submissions, the district court granted Teva’s renewed motion for judgment as a matter of law of noninfringement and vacated the damages award, concluding that GSK failed to prove that Teva’s alleged inducement actually caused physicians to prescribe Teva’s product for infringing uses.7 But the U.S. Court of Appeals for the Federal Circuit vacated the grant of JMOL in 2021,8 finding that Teva’s skinny label “did not successfully carve out the patented use,”9 and that Teva’s press releases, marketing materials and distribution did induce doctors to prescribe Teva’s generic drug for congestive heart failure.
Fast forward to 2023, the U.S. Solicitor General submitted a brief urging the Supreme Court to grant Teva’s petition for certiorari.10 The Solicitor’s brief argued that in view of the Federal Circuit’s decision, “a jury may conclude that a generic manufacturer’s engagement in the precise conduct that the Hatch-Waxman Amendments contemplate” (i.e., marketing a generic pharmaceutical with a carved-out label for patented indications) “is itself evidence of intent to induce infringement of the patented method.”11 Additionally, the Solicitor added that this decision is crucial to defining the limits of the Hatch-Waxman Amendments — which incentivize generic pharmaceutical companies to enter the market — and “may significantly deter” use of the section viii pathway.12
Notwithstanding the views of the Solicitor General, the Supreme Court refused to review the Federal Circuit’s decision finding that Teva did in fact induce doctors to infringe GSK’s ’069 patent. The Supreme Court did not explain its decision to not hear the case, but did note that Justice Kavanaugh would have granted the cert.
As set forth by the Federal Circuit, it is still the law that “generics could not be held liable for merely marketing and selling under a ‘skinny’ label omitting all patented indications, or for merely noting (without mentioning any infringing uses) that FDA had rated a product as therapeutically equivalent to a brand-name drug.”13 However, in view of the Federal Circuit’s opinion and the Supreme Court’s refusal to grant certiorari, district courts should continue to scrutinize allegations of induced infringement as related to the generic practice of skinny labeling. Particularly, district courts must closely analyze whether a generic’s label has properly “carved out” a patented use such as to avoid liability for infringement, and whether, in view of its labeling, the generic has taken action to actually cause others to infringe.