GSK vs. Teva: Induced Infringement, Skinny Labels and Fat Damages

October 6, 2020

Last week, in GlaxoSmithKline (GSK) v. Teva, the Federal Circuit reversed the district court’s granting of judgment as a matter of law (JMOL) of no induced infringement by Teva. The JMOL had reversed a jury verdict finding of induced infringement by Teva. The Federal Circuit also sustained the jury’s award of $234 million to GSK.

So what happened, and what does it mean (if anything)?

Factual Background
The claims at issue were method of treatment claims. Claim 1 read in part: “A method of decreasing mortality caused by congestive heart failure in a patient in need thereof which comprises administering a therapeutically acceptable amount of carvedilol in conjunction with one or more other therapeutic agents…” GSK listed the patent-at-issue in the Orange Book with use code U-233 (“decreasing mortality caused by congestive heart failure”). Carvedilol is the generic name for Coreg®. Teva was not accused of direct infringement of the method claims. Rather, GSK accused Teva of inducing (indirect) infringement.

Initially, Teva had a skinny label (see 21 U.S.C. § 355(j)(2)(A)(viii)) when it began selling carvedilol, carving out GSK’s patented use. Subsequently, Teva amended its label to include the patented use.

Teva argued, and the district court agreed in granting JMOL, that no induced infringement occurred during either label period because Teva did not instruct physicians on how to use carvedilol. Rather, physicians already knew how to use it.

Federal Circuit Decision
Induced infringement, like beauty, is in the eye of the beholder. It simply requires acts (with intent) which provide encouragement to a third party to commit direct infringement.

The Federal Circuit found that there was enough evidence for a jury to have found that Teva’s actions had the required intent and provided such encouragement, indicating: “The district court applied an incorrect legal standard [in granting JMOL], for precedent makes clear that when the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met. There was ample record evidence of promotional materials, press releases, product catalogs, the FDA labels, and testimony of witnesses from both sides, to support the jury verdict of inducement to infringe…” The identified activity occurred during both label periods and focused on links between Teva’s carvedilol and Coreg®.

In a dissenting opinion, Chief Judge Prost found that Teva’s actions did not rise to the level of induced infringement. The dissent focused on Teva’s activities and whether they were specifically linked to the method claimed in GSK’s patent (for example, whether Teva advertised or marketed its carvedilol specifically for the treatment method in GSK’s patent).

Possible lessons learned include:

1. Skinny Labels Could Lead To Jury Trials:
a. Generally speaking, ANDA trials are bench trials (equitable in nature, no damages). So this case was an atypical ANDA case in that sense. The fact that Teva initially had a skinny label when it entered the market (so GSK did not initiate par. IV litigation) and damages began to accrue made a jury trial possible. Why does this possibly matter? Appellate courts afford jury decisions deference given that the jury was the trier of fact. Indeed, the Federal Circuit noted that its standard of review here was that “when trial is to a jury, the district court should grant JMOL ‘sparingly’ and ‘only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability.’”

2. Skinny Labels May Not Provide Generic Manufacturers “Carte Blanche” To Market For Any Use Including The Carved-Out Patented Use
a. The Federal Circuit found induced infringement for the period of time during which Teva had a skinny label. Accordingly, a skinny label, by itself, did not preclude finding induced infringement by Teva. Stated another way, a skinny label does not appear to shield a generic manufacturer from induced infringement liability, so the generic manufacturer may wish to carefully consider how it markets its product and how such marketing may or may not conform to the skinny label.

3. Which Is More Important: Statements Linking Generic Product With Brand Product (Majority Opinion Focus) Or Statements Linking Generic Product With Patented Method (Dissent Focus)?
a. This question may have to wait for another day, perhaps when the Federal Circuit addresses the issue in a typical, non-jury ANDA litigation where jury deference is not an issue.