Skinny Label and Induced Infringement: The Saga Continues

Well, we’re a little late to blogging about this, but the significance of the ongoing Teva v. GSK litigation to Hatch-Waxman aficionados makes this case still ripe for blogging.

Six months after the Supreme Court asked the Solicitor General to submit a brief on behalf of the U.S. government in the now-infamous (at least in FDA circles) Teva v. GSK skinny label case, the U.S. Government submitted an Amicus Brief—not only signed by the Solicitor General, but also the lead attorneys representing the USPTO, HHS, and FDA—encouraging the Supreme Court to grant Teva’s Petition for Certiorari to address whether a generic company can be held liable for induced infringement where its label carves out a patent-protected method of using a product.

In the brief, the Government takes a strong position, stating “[t]he court of appeals’ holding that respondents presented sufficient evidence of petitioner’s intent to induce infringement is erroneous and warrants this Court’s review.”  Specifically, the Government explained, “[t]he section viii pathway cannot function properly if FDA and generic manufacturers cannot rely on an NDA holder’s representations to the agency regarding which portions of the brand-name drug’s labeling teach patented methods of use.”  Concerned about the uncertainty of the future of the skinny label after the Federal Circuit decision in this case and the potential for that decision to deter reliance on the skinny label, the Government asks the Supreme Court to grant a writ of certiorari and reverse the judgement of the Federal Circuit.

Agreeing with Judge Prost’s dissents in the Federal Circuit’s initial and rehearing decisions in this case, the Government argues that a generic’s labeling should not be treated as evidence of intent to induce infringement where that generic “plays by the rules of the section viii pathway” (internal citations omitted).  The Government’s concern goes far beyond this case: Like many generic drug sponsors, the Government raises concerns of the implications of the outcome of this case on the skinny label pathway itself.  The issue, according to the Government is that:

[A] jury may conclude that a generic manufacturer’s engagement in the precise conduct that the Hatch-Waxman Amendments contemplate—namely, marketing an FDA-approved generic version of a brand-name drug with labeling that carves out those indications that the brand-name manufacturer has identified to FDA as claimed by a method-of-use patent—is itself evidence of intent to induce infringement of the patented method.

If an FDA-approved carve-out could support an intent to induce infringement claim, the use of the “section viii pathway would be substantially deterred.”  To maintain the legitimacy of the section viii pathway and mitigate the effects of this decision, the Government urges the Supreme Court to hear this case.

While the Government’s concerns in this case are geared more towards the decision’s downstream effect on the skinny-label and generic competition, the Government does not mince words when talking about the facts at issue in Teva v. GSK.  Plainly, the Government brief states “The decision below is incorrect. No reasonable jury could have concluded that the carved-out labeling for petitioner’s generic carvedilol from 2007-2011 was itself evidence of intent to induce infringement.”  Where the generic sponsor has carved-out the specific indication identified in the Orange Book as covered by the method of use patent, the Government argues, the generic labeling “cannot provide the requisite evidence of specific intent to induce infringement . . . .”  Other communications may suffice to show infringement, but carved-out labeling more accurately reflects an intent not to encourage infringement, reasons the Government, extensively citing Judge Prost’s Federal Circuit dissent.  Here, the Government explained, the carved-out labeling was insufficient to show intent to infringe, as that labeling was dictated by FDA regulatory requirements and GSK’s use code.  Instead, the Government takes the position that, to support an inference of intent to induce infringement, independent evidence that the generic sponsor understood its carved-out labeling to encompass patented uses and proof that petitioner expected and encouraged doctors to rely on the labeling should be necessary.

The Government’s brief puts a lot of faith in the existing regulatory system rather than the patent system.  Because FDA cannot review patent claims, the Agency must rely on the brand-name manufacturer’s use code description to permit carve-outs, and the generic sponsor is limited to the use code in proposing use code carve-outs.  Allowing induced infringement claims based on the carve-out, which is governed by the use code, allows for some serious gamesmanship; so rather than sue for induced patent infringement, the Government points to the pathways for resolution under the regulatory system.  The Government suggests that GSK should have submitted a Citizen Petition regarding the carve-out or request that FDA stay the approval of the ANDA for further administrative review.  The Government chastises GSK for failing to use these options (though the availability of these options in this circumstance is questionable, and, more generally, the utility of these options also is questionable).

The Government urges the Supreme Court to take this case because of FDA’s concern that the potential for liability “may discourage manufacturers from invoking the section viii pathway, thereby decreasing the availability of lower-cost generic drugs” even if that liability is rarely imposed.  Further, despite the insistence by the Federal Circuit and GSK that the case is limited to the fact pattern at issue here, the Government is concerned that the facts at issue here—particularly the background facts—are likely to be present in most skinny label cases.  In short, the Government, like Judge Prost, is concerned that the Federal Circuit decision in this case is so extrapolatable that “generics simply won’t play” and “the section viii pathway will be seriously jeopardized.”

It’s important to note here that the Government’s brief was signed by both FDA and the USPTO.  The two have long been encouraged to collaborate more, and it seems that this case has presented a prime opportunity.  That the USPTO, charged with furthering effective IP protection, agrees with FDA with respect to the application of the induced infringement scheme should not be overlooked.  FDA’s signature here is also significant.  The Agency delegated with authority to execute the skinny label pathway is concerned about the viability of the skinny label.  That should legitimize generics’ concerns about the death of the skinny label after this case—particularly if the background facts are similar across skinny label cases, as the government portends.

However, the Government’s suggestion that the facts will be similar across skinny label cases is flatly denied by GSK in the pleadings.  GSK filed a supplemental brief in response to the Government’s brief.  That brief criticizes the government brief for “rewrit[ing]” the “facts of this case and the documented history of the section viii ‘carve-out’ process” in order “to reach the result it wants.”  GSK goes through the factual history of the matter in great detail, arguing that FDA’s regulatory alternatives simply were not available here.   GSK appears to be encouraging the Court to focus only on the specific facts at hand rather than the parade of horribles the government and other amici have represented.  This case, in other words and according to GSK, will not destroy the skinny-label statutory scheme by leaving it open to induced infringement issues; the holding will be limited to the facts of this case because the facts of this case are so special.  But even if it were that significant, GSK points out that “Congress is the proper forum for the government’s policy-driven argument.”

Whether the Court takes up Teva v. GSK is still up in the air.  Given that the Supreme Court takes so few cases, chances are low that the justices ever hear it.  Nevertheless, we’re optimistic that we’ll be hearing more about the case and the skinny label in the near future, whether from the Supreme Court or the inevitable battle in Congress.