Federal Circuit Reverses Course on Skinny Labels
Traditionally, generic drug companies have been able to obtain FDA approval for less than all of the FDA approved indications of a drug, a “carve out” commonly referred to as a “skinny label.” A safe harbor currently allows generic manufacturers to use this strategy to avoid liability for inducing infringement of the brand manufacturers’ patents. 2 The extent of this safe harbor was recently tested in GlaxoSmithKline v. Teva Pharmaceuticals. 3
The case involves an Orange Book patent for carvedilol for the congestive heart failure (CHF) indication approved by FDA. Teva had carved out this patent-protected indication leaving the hypertension indication, resulting in a “skinny label” for its “AB” rated generic version. FDA then compelled the Teva to amend its labeling to include the CHF indication. The lower court did not find Teva liable for inducing infringement of the Orange Book patent held by GlaxoSmithKline, but the Federal Circuit reversed resulting in an induced infringement verdict in favor of GlaxoSmithKline against Teva. The Circuit Court ruling was based on alleged evidence from the generic company’s website and other promotional material presented at trial. This case demonstrates the importance of Website evaluation and cautions manufacturers to avoid creating detrimental evidence. The decision had the potential to discourage the development of generic versions of any brand drug where there is a remaining patent-protected indication. The ruling in GlaxoSmithKline v. Teva Pharmaceuticals was widely noted to have broad legal implications for all stakeholders, including brand and generic manufacturers, Plan Sponsors and patients. For those reasons, the ruling came under substantial scrutiny.
In response to the Circuit Court’s decision, the generic drug industry, Mr. Waxman, namesake of the Hatch Waxman Act, and other scholars issued strong criticism. On February 9, 2021, the original Federal Circuit panel vacated its ruling and has decided to rehear the appeals on the merits to determine if the evidence supports the $235 million verdict. 4 The re-hearing is scheduled for February 23, 2021. Meanwhile, another skinny label case with some new twists has been filed and is also being closely watched by industry. 5
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Elements required to prove induced infringement are: 1) the accused actively encouraged infringement (circumstantial evidence via advertisements), 2) the accused knew the acts they induced constituted patent infringement, and 3) the encouraging acts resulted in direct patent infringement (actually occurred).
Case 18-1976. Decided Oct 2, 2020. Appeal from U.S. District Ct. for DE in No. 1:14-cv-00878-LPS-CJB.
U.S. Court of Appeals for the Federal Circuit.
Amarin v. Hikma Pharmaceuticals, Inc., 20-cv-1630, U.S. Dist. Ct. for DE.