Locke Lord QuickStudy: Federal Circuit Places “Skinny Labels” Back in Danger

August 6, 2021

On October 2, 2020, the Federal Circuit issued a precedential opinion vacating a district court’s judgment as a matter of law and reinstating a jury verdict finding of induced infringement of a patented use that had been carved out of a generic applicant’s label. GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 976 F.3d 1347 (Fed. Cir. 2020). We previously analyzed this opinion and its impact in Federal Circuit Places “Skinny Labels” in Danger and followed up on Teva’s petition for an en banc rehearing in Federal Circuit Hints at Reversed Course on “Skinny Labels.

At issue in the case is whether Teva’s marketing of carvedilol first with a skinny label, and later an amended label including the carved out indication as required by FDA, induced infringement of GSK’s reissue patent, RE40,000 (“the ’000 patent”). Id. at 1357.  Teva initially carved out the congestive heart failure (“CHF”) indication from the Indication section of its proposed label. Id. at 1361. Years later, in 2011, Teva revised the Indication section of its label to include the CHF indication at FDA’s direction. Id. at 1363.

On appeal to the Federal Circuit, the majority, citing only to circumstantial evidence (press releases and product catalogs published by Teva before the issuance of the ’000 patent which remained on Teva’s website throughout the life of the ’000 patent), found the evidence substantial enough to support the jury’s finding of induced infringement during the skinny label period.  Id. at 1351, 1368. The majority, citing to precedent not directed to skinny labels, further held that “the ‘content’ of Teva’s skinny label alone was sufficient to prove induced infringement.” Id. at 1355, 1358.  Chief Judge Prost penned a lengthy dissent strenuously disagreeing with the majority.

On February 9, 2021, following a petition by Teva for en banc rehearing, the Federal Circuit issued an order vacating its October 2, 2020 opinion, stating that the panel would rehear the issue of “whether there is substantial evidence to support the jury’s verdict of induced infringement during the time period from January 8, 2008 through April 30, 2011.” Oral arguments were held on February 23, 2021.

On August 5, 2021, the Federal Circuit issued a precedential opinion again vacating the district court’s judgment as a matter of law and reinstating the jury verdict finding of induced infringement though stating the affirmance was limited to the specific facts of the case. GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., Nos. 2018-1976, 2018-2023, slip op. ‎‎(Fed. Cir. Aug. 5, 2021). The majority made their findings based largely on the same circumstantial evidence as in their original opinion, including press releases and product catalogs ‎published by Teva ‎before the issuance of the ’000 patent, none of which make any mention of ‎treating CHF.  Id. at 27-32.‎ The majority went to great lengths to explain how this constituted “substantial evidence” that the jury may have relied on in reaching its verdict. According to Judge Prost’s lengthy dissent (who stepped down as Chief Judge in the interim), the “new opinion does little to assuage, and even exacerbates, concerns raised by the original.” Id. at 78.

Despite Teva’s removal of what GSK represented to FDA to be the patented use from the Indications section of its label, the majority found that Teva “failed to carve out all patented indications.” Id. at 10. In doing so, the majority pieced together language from several sections of Teva’s label:  Indications, Clinical Study, and Dosage and Administration.  Id. at 15. According to Judge Prost, at no point did the majority point to evidence of how these disparate disclosures would have induced infringement. Id. at 60. Judge Prost further wrote that majority failed to connect these disparate disclosures to any evidence of intent on the part of Teva. Id. at 70.

Teva’s appeal brief and amici briefs argued that the original opinion nullifies the carve-out statute‎, allows juries to find inducement from conduct predating the patent, and ‎hollows out inducement doctrine‎. The majority attempted to sidestep these concerns, stating: “This narrow, case-specific review of substantial evidence does not upset the careful balance struck by the Hatch-Waxman Act regarding section viii carve-outs.” Id. at 10-11. Judge Prost took an entirely different view, opining: “Indeed, it’s unclear what Teva even did wrong—or, put another way, what another generic in its shoes should do differently.” Id. at 75.

Based on the majority opinion and dissent, there will likely be further litigation defining ‎the extent, if any, to which generic applicants may be held liable for infringement relating to ‎indications carved out of their skinny labels, as well as what it means for something to truly be carved out of a label. At this time, ANDA applicants choosing ‎to rely on section viii carve outs as a means of avoiding patented indications or uses will need to ‎consider carefully whether information such as press releases, product catalogs, or a piecemeal interpretation of their skinny label ‎could put them at risk for an infringement claim regardless of whether their labeling revisions may have been approved by FDA as part of a skinny label.‎