Long Live the Skinny Label
The skinny label is back from the dead. While back in 2021, it seemed like the skinny label was effectively dead after the Federal Circuit twice held Teva liable for induced infringement of GSK’s labeling in GSK v. Teva, the Supreme Court breathed new life into it last week—and just as the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet was starting a hearing on “Medicines and IP: Balancing Innovation and Access,”, with a focus on skinny labeling—with its unanimous decision in Hikma v. Amarin. In Hikma v. Amarin, the Supreme Court made clear that an innovator must plausibly allege that a generic actively encouraged infringing uses; allegations that a physician could read a statement to induce infringement is not sufficient to survive a Motion to Dismiss.
A quick refresher on the background of the case: Hikma received approval of a skinny labeled version of Amarin’s Vascepa (icosapent ethyl) carving out the use “as an adjunct statin therapy in patients with elevated triglyceride levels and established or risk factors for cardiovascular disease” (the “CV indication”). The indication remaining in the Hikma labeling was as adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia (the “SH indication”). Hikma, in marketing its skinny labeled generic Vascepa, stated that its product is the “generic equivalent to Vascepa” and that Vascepa “is indicated, in part” for the SH indication while citing to sales numbers for Vascepa in all indications. Hikma also stated that its generic icosapent ethyl is “AB rated” in the “Therapeutic Category: Hypertriglyceridemia.”
Amarin sued Hikma for induced infringement, arguing that Hikma’s labeling “teaches CV risk reduction” due to “a notice regarding side effects for patients with CV disease” and an absence of a statement that the generic “should not be used for the CV indication….” Amarin further argued that the totality of Hikma’s statements across several documents encouraged infringing uses. Hikma filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for induced infringement, and the District Court dismissed the case, holding that Amarin did not sufficiently plead that Hikma “took affirmative steps to induce” infringement. (In an interesting twist, Amarin also sued an insurer, HealthNet, for including Hikma’s product on its formulary for the CV indication. While that part of the case survived the Motion to Dismiss, HealthNet ultimately settled with Amarin, meaning that we still don’t have clarity into liability for induced infringement for inclusion of a skinny-labeled generic on a formulary).
But the Federal Circuit reversed. It held that Hikma’s label, standing alone, does not induce infringement but it was “‘at least plausible that a physician could read’ the label, website, and press releases ‘as an instruction or encouragement to prescribe [Hikma’s generic] for any of the approved uses of icosapent ethyl.’”
Hikma appealed to the Supreme Court, and in a surprising but exciting turn of events, the Supreme Court agreed to hear the case. In yet another surprising turn of events, the Supreme Court issued a unanimous 9-0 decision finding that Amarin failed to state a claim for active inducement in violation of 35 U.S.C. § 271(b)—so its complaint cannot withstand Hikma’s Rule 12(b)(6) Motion to Dismiss—and reversed the Federal Circuit decision.
The Court took a pretty simple approach to deciding this case, applying the “well-established federal pleading standards” under Twombly and Iqbal that require a plaintiff to “state a claim to relief that is plausible on its face” with “more than a sheer possibility that a defendant has acted unlawfully.” Looking to the third element of an induced infringement claim—the inducer took “active steps” to “encourage direct infringement”—the Court required affirmative steps rather than passive steps to promote infringement and rejected Amarin’s argument that it merely needs to allege “a plausible chain of events through which statements made by Hikma could lead a healthcare provider . . . to prescribe or dispense Hikma’s drug to reduce a patient’s cardiovascular risk.” This is because, the Court held, Amarin failed to allege “more than sheer possibility” that Hikma actively induced Amarin’s method of use patents. “So the question is not merely whether the statements could be ‘plausibly underst[oo]d’ to induce infringement, but whether they plausibly constitute ‘affirmative steps to bring about the desired result’ of infringement.”
Looking to Hikma’s actual conduct, the Court explained that “it’s not plausible that Hikma ‘designed’ [its] statements to ‘stimulate others to commit’ infringement.” Claiming that the product is “equivalent” to its Reference Listed Drug, a warning and disclaimer in product leaflets, and vague statements of sales figures were “implausibly roundabout ways to induce medical providers to infringe.” The Court was concerned that “[t]reating them otherwise,” could turn any statement—even warning against the patented method of use—into active inducement of infringement.
The Court poignantly “decline[d] to put generic manufacturers between a rock and a hard place by turning adherence to the law and industry standards into building blocks for illegal conduct.” Relatively innocuous statements (like that the product is AB-rated or generic) are not sufficient to allege induced infringement, nor are “mere omissions, inactions, or nonfeasance.” Case law, said the Court, “leaves generic manufacturers more breathing room than that.”
That the case was dismissed (after being dismissed and reinstated) at the pleading stage is significant: Litigating a case is expensive and the threat of induced infringement may be sufficient to reduce reliance on the skinny label. If these cases can be dismissed at the pleading stage based on whether a defendant actively encouraged infringement through its statements (rather than how others may understand those statements), generic companies will not be undertaking as big of a risk as if they are forced to litigate the entire claim. Indeed, generic companies are breathing a sigh a relief, as the skinny label lives to see another day.