Locke Lord QuickStudy: Federal Circuit Dissent Declares “No ‎Skinny-Label Generic is Safe”‎

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, followed up on Teva’s petition for an en banc rehearing in Federal Circuit Hints at Reversed Course on “Skinny Labels”, and analyzed the Federal Circuit’s revised opinion in Federal Circuit Places “Skinny Labels” Back in Danger.

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.”

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., 7 F.4th 1320 ‎‎(Fed. Cir. 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 1335-38.‎ The majority went to great lengths to explain how this constituted “substantial evidence” that the jury may have relied on in reaching its verdict. By piecing together language from several sections of Teva’s label, the majority found that Teva “failed to carve out all patented indications.” Id. at 1326, 1329. Judge Prost (who stepped down as Chief Judge in the interim) penned another lengthy dissent strenuously disagreeing with the majority.

On February 11, 2022, the Federal Circuit issued a precedential order denying Teva’s renewed petition for en banc rehearing. The order was accompanied by a concurrence by Chief Judge Moore joined by Judges Newman, O’Malley, Taranto, Chen, and Stoll, a dissent by Judge Prost joined by Judges Dyk and Reyna, as well as separate dissents from Judges Dyk and Reyna.  The concurrence alleges that the dissents advance legal positions that Teva “has not asserted or developed,” including whether a skinny label can show inducement. GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., Nos. 2018-1976, 2018-2023, slip op. at 5-6 ‎‎(Fed. Cir. Feb. 11, 2022). Additionally, the concurrence states that Teva never argued, but the dissents advance, “that GSK’s representations to the FDA constituted a bar to admission of the partial label or to satisfaction of the inducement liability standard during the partial label period,” that “there was a conflict between the FDA regulatory framework and patent law,” and that “the partial label was not evidence relevant to or otherwise impermissible for deciding inducement.” Id. at 6. Instead, the concurrence took the position that the question on appeal has been whether substantial evidence supported the jury’s verdict that Teva actively encouraged infringement. Id

Despite denying Teva’s renewed petition, the concurrence expressed sympathy for Teva’s position. Id. at 9 (“It would be troubling to hold Teva liable for relying on GSK’s representations to the FDA.”). The concurrence opined that the district court should address an equitable estoppel defense on remand based on the “textbook structure” of (1) GSK “misrepresent[ing] its patent rights” to FDA; (2) Teva “faithfully follow[ing]” that representation; and (3) GSK suing Teva despite its representations to FDA. Id. at 9-12.

The dissents maintained, in the spirit of Judge Prost’s previous dissents, that it was the Court’s responsibility to grant rehearing for this issue of “exceptional importance” and what the dissents perceive as a major deviation from Congress’s intent in passing the Hatch-Waxman Act.  Id. at 13, 16-17, 27. In contrast to the concurrence, Judge Prost’s dissent explains at length how the issue of whether a skinny label can show inducement “was, and remains, the dispute” and points out that equitable estoppel was never raised by any party. Id. at 18-22; see also id. at 25-26 (“Teva fairly raised these issues in its briefing and petition for rehearing.”) (Dyk, C.J., dissenting). The dissents went on to express their doubt that the facts of this case fit a theory of equitable estoppel. Id. at 21, 25.

As with Judge Prost’s previous dissents, Teva’s briefing, and numerous amici briefs, the dissents express concern that “[n]ow, no skinny-label generic is safe,” that “there cannot be infringement liability for using a label required by the FDA during the partial label period at issue in this case,” and “that the majority opinion could be read to support such a finding of induced infringement where evidence as to intent is scant at best.” Id. at 15, 23, 28. The concurrence sought to sidestep these concerns by arguing that “district courts have already recognized the majority’s decision [to be] narrow and fact dependent.” Id. at 7.