Case: 18-1976 Document: 116 Page: 1 Filed: 12/02/2020
`
`
`
`No. 18-1976, -2023
`
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`GLAXOSMITHKLINE LLC and SMITHKLINE BEECHAM (CORK) LIMITED,
`
`Plaintiffs-Appellants,
`
`v.
`
`TEVA PHARMACEUTICALS USA, INC.,
`
`Defendant-Cross-Appellant.
`
`
`
`
`
`
`Appeal from the U.S. District Court for the District of Delaware (Stark, C.J.)
`No. 1:14-cv-00878-LPS-CJB
`
`PETITION FOR REHEARING EN BANC
`
`
`
`
`Daryl L. Wiesen
`J. Anthony Downs
`Christopher T. Holding
`Elaine Herrmann Blais
`Lana S. Shiferman
`Robert Frederickson, III
`Alexandra Lu
`GOODWIN PROCTER LLP
`100 Northern Ave.
`Boston, MA 02210
`Tel.: 617.570.1000
`Fax.: 617.523.1231
`
`
`
`William M. Jay
`Jaime A. Santos
`GOODWIN PROCTER LLP
`1900 N Street, NW
`Washington, DC 20036
`Tel.: 202.346.4000
`Fax.: 202.346.4444
`Ira J. Levy
`GOODWIN PROCTER LLP
`The New York Times Building
`620 Eighth Avenue
`New York, NY 10018
`Tel.: 212.813.8800
`Fax.: 212.355.3333
`
`Counsel for Defendant-Cross-Appellant Teva Pharmaceuticals USA, Inc.
`December 2, 2020
`
`
`

`

`Case: 18-1976 Document: 116 Page: 2 Filed: 12/02/2020
`
`2.
`
`CERTIFICATE OF INTEREST
`Counsel for Defendant-Cross-Appellant Teva Pharmaceuticals USA, Inc.,
`
`William M. Jay, certifies the following:
`Represented Entities. Provide the full names of all entities represented by
`1.
`undersigned counsel in this case. Fed. Cir. R. 47.4(a)(1).
`Teva Pharmaceuticals USA, Inc.
`Real Party in Interest. Provide the full names of all real parties in interest
`for the entities. Do not list the real parties if they are the same as the entities.
`Fed. Cir. R. 47.4(a)(2).
`N/A
`Parent Corporations and Stockholders. Provide the full names of all parent
`corporations for the entities and all publicly held companies that own 10% or
`more stock in the entities. Fed. Cir. R. 47.4(a)(3).
`Teva Pharmaceuticals Holdings Coöperatieve U.S.; IVAX LLC; Orvet UK;
`Teva Pharmaceuticals Europe B.V.; Teva Pharmaceuticals Industries Ltd.
`Legal Representatives. List all law firms, partners, and associates that (a)
`appeared for the entities in the originating court or agency or (b) are expected
`to appear in this court for the entities. Do not include those who have already
`entered an appearance in this court. Fed. Cir. R. 47.4(a)(4).
`Shaw Keller LLP: John W. Shaw, Karen E. Keller, David M. Fry
`Related Cases. Provide the case titles and numbers of any case known to be
`pending in this court or any other court or agency that will directly affect or
`be directly affected by this court’s decision in the pending appeal. Do not
`include the originating case number(s) for this case. Fed. Cir. R. 47.4(a)(5).
`See also Fed. Cir. R. 47.5(b).
`GlaxoSmithKline LLC et al. v. Glenmark Pharmaceuticals Inc., USA, No.
`1:14-cv-877 (D. Del.)
`
`3.
`
`4.
`
`5.
`
`i
`
`

`

`Case: 18-1976 Document: 116 Page: 3 Filed: 12/02/2020
`
`6. Organizational Victims and Bankruptcy Cases. Provide any information
`required under Fed. R. App. P. 26.1(b) (organizational victims in criminal
`cases) and 26.1(c) (bankruptcy case debtors and trustees). Fed. Cir. R.
`47.4(a)(6).
`N/A
`
`
`
` /s/ William M. Jay
`William M. Jay
`GOODWIN PROCTER LLP
`1900 N Street, NW
`Washington, DC 20036
`(202) 346-4000
`
`December 2, 2020
`
`
`
`ii
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`

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`Case: 18-1976 Document: 116 Page: 4 Filed: 12/02/2020
`
`TABLE OF CONTENTS
`
`
`RULE 35(b) STATEMENT .................................................................................. viii
`
`Page
`
`INTRODUCTION .................................................................................................... 1
`
`BACKGROUND ...................................................................................................... 3
`
`
`
`Congress created “carve-outs” so that narrow method patents
`cannot block generic drugs from being sold for noninfringing
`uses. ...................................................................................................... 3
`Teva follows the carve-out procedure, but the panel majority
`sustains a $235 million jury verdict for induced infringement. ........... 4
`ARGUMENT .......................................................................................................... 10
`
`
`
`
`
`The panel’s multiple departures from longstanding precedent
`threaten any product with a carve-out. ............................................... 10
`A.
`The panel’s decision nullifies the carve-out statute. ................ 10
`B.
`The panel’s decision allows juries to find inducement
`from conduct predating the patent. .......................................... 15
`The panel’s decision hollows out inducement doctrine. .......... 15
`C.
`The grave harm to competition makes this decision
`exceptionally important. ..................................................................... 17
`CONCLUSION ....................................................................................................... 19
`
`
`
`ADDENDUM
`
`CERTIFICATE OF SERVICE
`
`CERTIFICATE OF COMPLIANCE
`
`iii
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`

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`Case: 18-1976 Document: 116 Page: 5 Filed: 12/02/2020
`
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Allergan, Inc. v. Alcon Labs.,
`324 F.3d 1322 (Fed. Cir. 2003) .......................................................................... 12
`AstraZeneca LP v. Apotex Inc.,
`633 F.3d 1042 (Fed. Cir. 2010) .................................................................... 13, 14
`AstraZeneca Pharm. LP v. Apotex Corp.,
`669 F.3d 1370 (Fed. Cir. 2012) ................................................................ 4, 11, 12
`Bayer Schering Pharma AG v. Lupin, Ltd.,
`676 F.3d 1316 (Fed. Cir. 2012) .................................................................... 12, 14
`Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,
`566 U.S. 399 (2012) ........................................................................................ 1, 10
`Dynacore Holdings Corp. v. U.S. Philips Corp.,
`363 F.3d 1263 (Fed. Cir. 2004) .......................................................................... 16
`GlaxoSmithKline LLC v. Teva Pharm. USA, Inc., 313 F. Supp. 3d 582
`(D. Del. 2018) ..............................................................................................passim
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ............................................................................................ 15
`Grünenthal GMBH v. Alkem Labs. Ltd.,
`919 F.3d 1333 (Fed. Cir. 2019) .......................................................................... 12
`Guarantee Co. of N. Am., USA, Inc. v. Ikhana, LLC,
`959 F.3d 1354 (Fed. Cir. 2020) .......................................................................... 19
`Nat’l Presto Indus., Inc. v. W. Bend Co.,
`76 F.3d 1185 (Fed. Cir. 1996) ............................................................................ 15
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`843 F.3d 1315 (Fed. Cir. 2016) .................................................................... 16, 17
`Sanofi v. Watson Labs. Inc.,
`875 F.3d 636 (Fed. Cir. 2017) ............................................................................ 13
`
`iv
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`

`

`Case: 18-1976 Document: 116 Page: 6 Filed: 12/02/2020
`
`
`
`Takeda Pharm. U.S.A., Inc. v. W.-Ward Pharm. Corp.,
`785 F.3d 625 (Fed. Cir. 2015) ...................................................... 4, 12, 13, 14, 15
`Warner-Lambert Co. v. Apotex Corp.,
`316 F.3d 1348 (Fed. Cir. 2003) .................................................................... 11, 12
`Statutes
`21 U.S.C. § 355(j)(2)(A)(viii) .................................................................................... 4
`35 U.S.C. § 271(b) ................................................................................................... 15
`Other Authorities
`Paul Dietze et al., Fed Circ. Ruling Is Troubling for Generic Drug
`Manufacturers, Law360 (Oct. 21, 2020),
`https://www.law360.com/articles/1320956/fed-circ-ruling-is-
`troubling-for-generic-drug-manufacturers .......................................................... 10
`Dani Kass, Generics Worry Fed. Circ. Blew Up ‘Routine’ Labeling
`Practice (Oct. 7, 2020),
`https://www.law360.com/articles/1317312/generics-worry-fed-
`circ-blew-up-routine-labeling-practice ........................................................... 2, 17
`Kyu Yun Kim et al., A Major Decision Evaluating the Effect of a
`Skinny Label in a Post-Launch, Non-Hatch Waxman Litigation,
`Jury Trial World, mondaq (Oct. 15, 2020),
`https://www.mondaq.com/unitedstates/patent/994650/a-major-
`decision-evaluating-the-effect-of-a-skinny-label-in-a-post-launch-
`non-hatch-waxman-litigation-jury-trial-world. .............................................. 2, 17
`Kevin E. Noonan, GlaxoSmithKline LLC v. Teva Pharmaceuticals
`USA, Inc. (Fed. Cir. 2020), Patent Docs (Oct. 8, 2020),
`https://www.patentdocs.org/2020/10/glaxosmithkline-llc-v-teva-
`pharmaceuticals-usa-inc-fed-cir-2020.html .......................................................... 2
`Brenda Sandburg, Rx Drug Promotion: Potential Enforcement
`Worries, Pink Sheet (Nov. 19, 2020),
`https://pink.pharmaintelligence.informa.com/PS143323/Rx-Drug-
`Promotion-Potential-Enforcement-Worries ........................................................ 17
`
`v
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`

`

`Case: 18-1976 Document: 116 Page: 7 Filed: 12/02/2020
`
`
`
`Zachary Silbersher, Can Amarin Benefit from the GSK v. Teva
`Decision Regarding Induced Infringement for Off-Label Sales?,
`Markman Advisors (Oct. 7, 2020),
`https://www.markmanadvisors.com/blog/2020/10/7/can-amarin-
`benefit-from-the-gsk-v-teva-decision-regarding-induced-
`infringement-for-off-label-sales.......................................................... 2, 11, 17, 18
`StreetInsider, GSK v. Teva‘Skinny Label’ Ruling Positive for Amarin
`(AMRN) – Citi (Oct. 5, 2020), https://bit.ly/2UmjyRE ...................................... 18
`
`
`
`
`
`
`vi
`
`

`

`Case: 18-1976 Document: 116 Page: 8 Filed: 12/02/2020
`
`’000 patent
`
`ANDA
`
`CHF
`
`GSK
`
`Hatch-Waxman
`
`
`
`TABLE OF ABBREVIATIONS
`
`U.S. Patent No. RE40,000 (Appx31-45)
`
`Abbreviated New Drug Application (generic drug
`application)
`
`Congestive heart failure
`
`Plaintiffs-Appellants GlaxoSmithKline LLC and
`SmithKline Beecham (Cork) Limited
`
`Hatch-Waxman Amendments to the Federal Food,
`Drug, and Cosmetic Act (formally, Drug Price
`Competition and Patent Term Restoration Act of 1984,
`Pub. L. No. 98-417, 98 Stat. 1585)
`
`JMOL
`
`Post-MI LVD
`
`Judgment as a matter of law
`
`Left ventricular dysfunction following myocardial
`infarction
`
`Section viii
`
`21 U.S.C. § 355(j)(2)(A)(viii)
`
`Teva
`
`Defendant-Cross-Appellant Teva Pharmaceuticals USA,
`Inc.
`
`
`
`
`
`vii
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`

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`Case: 18-1976 Document: 116 Page: 9 Filed: 12/02/2020
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`
`
`RULE 35(b) STATEMENT
`
`1.
`
`
`
`Based on my professional judgment, I believe the panel decision is
`contrary to the following precedents of this Court:
`
`Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003);
`
`AstraZeneca Pharm. LP v. Apotex Corp., 669 F.3d 1370 (Fed. Cir. 2012); Takeda
`
`Pharm. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625 (Fed. Cir. 2015);
`
`Grünenthal GMBH v. Alkem Labs. Ltd., 919 F.3d 1333 (Fed. Cir. 2019); Nat’l Presto
`
`Indus., Inc. v. W. Bend Co., 76 F.3d 1185 (Fed. Cir. 1996); Dynacore Holdings Corp.
`
`v. U.S. Philips Corp., 363 F.3d 1263 (Fed. Cir. 2004); and Power Integrations, Inc.
`
`v. Fairchild Semiconductor Int’l, Inc., 843 F.3d 1315 (Fed. Cir. 2016).
`
`2.
`
`
`
`Based on my professional judgment, I believe this appeal requires an
`answer to precedent-setting questions of exceptional importance:
`
`The questions concern whether induced infringement can be used to nullify a
`
`provision of the Hatch-Waxman Amendments. Congress specified in Hatch-
`
`Waxman that when a drug is no longer patented and is FDA-approved for unpatented
`
`uses, a patent on one method of using the drug cannot be allowed to block the sale
`
`and use of the drug for the other, unpatented purposes. See 21 U.S.C.
`
`§ 355(j)(2)(A)(viii). The statutory mechanism is a “carve-out”: a generic
`
`manufacturer can adopt a “skinny label,” deleting the patented indication and
`
`labeling the product only for unpatented indications, and avoid claims that the label
`
`induces infringement. The questions are: Can the generic manufacturer nonetheless
`
`viii
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`

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`Case: 18-1976 Document: 116 Page: 10 Filed: 12/02/2020
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`
`
`be held liable for induced infringement based on evidence that would be available
`
`in every carve-out case—the skinny label itself and product materials that describe
`
`the generic drug product as the AB-rated generic equivalent of the brand product,
`
`but do not even mention the patented method? And even if the generic manufacturer
`
`were found to have encouraged infringement, can it be held liable for infringement
`
`that it did not cause—e.g., if the direct infringer undisputedly did not see the
`
`communication that supposedly encouraged infringement?
`
`
`/s/ William M. Jay
`William M. Jay
`GOODWIN PROCTER LLP
`1900 N Street, NW
`Washington, DC 20036
`(202) 346-4000
`
`December 2, 2020
`
`ix
`
`

`

`Case: 18-1976 Document: 116 Page: 11 Filed: 12/02/2020
`
`
`
`INTRODUCTION
`
`A divided panel has handed down this Court’s most important infringement
`
`decision in years. After seven unchallenged years on the market, Teva was sued and
`
`found liable to GSK for $235 million in lost profits—for selling an unpatented drug
`
`labeled for unpatented uses. Teva followed the special pathway Congress created
`
`so generic drugs can enter the market while steering clear of method-of-use patents:
`
`it adopted a “skinny label”—one that included only the two unpatented indications
`
`and “carved out” GSK’s patented method. But this Court held, over Chief Judge
`
`Prost’s dissent, that Teva induced infringement despite the carve-out, because Teva
`
`described its skinny-labeled product as the generic equivalent of GSK’s product. If
`
`that can be inducement, as the majority held, every skinny-labeled generic is at risk,
`
`and the carve-out statute is a dead letter.
`
`Congress authorized carve-outs for a crucial purpose: ensuring “that one
`
`patented use will not foreclose marketing a generic drug for other unpatented ones.”
`
`Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 415 (2012).
`
`Otherwise a narrow method claim, like GSK’s, could block generics long after the
`
`drug itself goes off-patent. But the panel’s opinion “nullifies” the carve-out statute.
`
`Dissent 3. Commentators and analysts immediately recognized as much, describing
`
`1
`
`

`

`Case: 18-1976 Document: 116 Page: 12 Filed: 12/02/2020
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`
`
`it as a “monumental,”1 “major decision”2 that “stretche[s]” inducement liability3 in
`
`a “broad range of inducement cases” and threatens the viability of carve-outs.4
`
`Under decades of precedent, merely marketing the skinny-labeled product
`
`does not induce infringement. Inducement requires proof that (1) a defendant
`
`affirmatively encouraged others to infringe, (2) during the term of the patent, and (3)
`
`the encouragement actually led to direct infringement. The panel created conflicts
`
`on all three prongs.
`
`First, the panel emphasized that Teva expected some infringement would
`
`occur, but mere knowledge is “irrelevant” without action to encourage infringement.
`
`Teva marketed a product that it described the same way FDA and all generic
`
`
`1 Zachary Silbersher, Can Amarin Benefit from the GSK v. Teva Decision Regarding
`Induced Infringement for Off-Label Sales?, Markman Advisors (Oct. 7, 2020),
`https://www.markmanadvisors.com/blog/2020/10/7/can-amarin-benefit-from-the-
`gsk-v-teva-decision-regarding-induced-infringement-for-off-label-sales.
`2 Kyu Yun Kim et al., A Major Decision Evaluating the Effect of a Skinny Label in
`a Post-Launch, Non-Hatch Waxman Litigation, Jury Trial World, mondaq (Oct. 15,
`2020), https://www.mondaq.com/unitedstates/patent/994650/a-major-decision-eval
`uating-the-effect-of-a-skinny-label-in-a-post-launch-non-hatch-waxman-litigation-
`jury-trial-world.
`3 Kevin E. Noonan, GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc. (Fed.
`Cir. 2020), Patent Docs (Oct. 8, 2020), https://www.patentdocs.org/2020/10/
`glaxosmithkline-llc-v-teva-pharmaceuticals-usa-inc-fed-cir-2020.html.
`4 Dani Kass, Generics Worry Fed. Circ. Blew Up ‘Routine’ Labeling Practice,
`Law360 (Oct. 7, 2020), https://www.law360.com/articles/1317312/generics-worry-
`fed-circ-blew-up-routine-labeling-practice.
`
`2
`
`

`

`Case: 18-1976 Document: 116 Page: 13 Filed: 12/02/2020
`
`
`
`manufacturers do: as “AB-rated” to the brand product. That does not actively induce
`
`infringement of the patented method.
`
`Second, the panel relied on supposed inducement from before the patent-in-
`
`suit issued, merely because Teva archived a press release on its website. Neither
`
`pre-patent nor passive activity can actively induce.
`
`Third, the panel eliminated the critical causation element. The district court
`
`detailed overwhelming and uncontroverted testimony that Teva’s actions had no
`
`impact on physicians’ prescribing behavior. The majority did not dispute the one-
`
`sided evidence; it said that requiring proof of causation was “an incorrect legal
`
`standard.” Op. 16.
`
`Under the majority’s redefinition of inducement, every generic on the market
`
`with a skinny label is at risk, and no generic will risk using a skinny label in the
`
`future. Copycat litigation has already begun: a generic that launched last month
`
`with a carve-out already faces a new inducement suit, seeking lost profits and an
`
`injunction. The full Court should take up these important issues, restore consistency
`
`to this Court’s precedents, and save the carve-out statute from nullification.
`
`BACKGROUND
`
`
`
`Congress created “carve-outs” so that narrow method patents cannot
`block generic drugs from being sold for noninfringing uses.
`
`Carve-outs are a key way of bringing low-cost generic drugs to market.
`
`Congress determined that method-of-use patents alone must not prevent the sale of
`
`3
`
`

`

`Case: 18-1976 Document: 116 Page: 14 Filed: 12/02/2020
`
`
`
`generic products for noninfringing uses. Accordingly, a generic company can
`
`submit a “Section viii statement” informing FDA that it will omit (“carve out”) any
`
`reference to a patented indication from its product’s labeling. See 21 U.S.C.
`
`§ 355(j)(2)(A)(viii). This procedure prevents brand companies from “maintain[ing]
`
`de facto indefinite exclusivity over a pharmaceutical compound by obtaining serial
`
`patents for approved methods of using the compound.” AstraZeneca Pharm. LP v.
`
`Apotex Corp., 669 F.3d 1370, 1380 (Fed. Cir. 2012).
`
`Congress knew that carve-outs “would result in some off-label infringing
`
`uses.” Takeda Pharm. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 631
`
`(Fed. Cir. 2015). That is because when physicians prescribe drugs for patented uses,
`
`pharmacies may fill those prescriptions with generic versions (indeed, state law often
`
`requires it). Id. at 633. Hatch-Waxman “enable[s] the sale of drugs for non-patented
`
`uses” even if some off-label sales would naturally occur. Id. at 631.
`
` Teva follows the carve-out procedure, but the panel majority sustains a
`$235 million jury verdict for induced infringement.
`
`This case is about an off-patent drug, carvedilol (brand-name Coreg), with
`
`substantial noninfringing uses. The patent-in-suit covered only one narrow method
`
`of treating congestive heart failure (CHF), which represented less than 18% of
`
`carvedilol prescriptions. Op. 5, 18.
`
`1.
`
`Carvedilol is FDA-approved for (1) managing hypertension, (2)
`
`treating mild-to-severe CHF, and (3) treating heart dysfunction following a heart
`
`4
`
`

`

`Case: 18-1976 Document: 116 Page: 15 Filed: 12/02/2020
`
`
`
`attack (“post-MI LVD”). Dissent 8. The patent on the carvedilol compound expired
`
`in 2007. Op. 3. GSK also obtained two patents claiming methods of treating CHF.
`
`Op. 4.
`
`GSK spent nearly $1 billion promoting Coreg as “a heart failure drug.”
`
`Appx11114-11115, Appx10508-10509. Using carvedilol became the “standard of
`
`care” for treating symptomatic CHF—detailed in textbooks, taught to medical
`
`students, and incorporated into the CHF guidelines of the American College of
`
`Cardiology and American Heart Association. Dissent 14; Appx10385, Appx11147-
`
`11152.
`
`Teva and thirteen other manufacturers sought FDA approval to market generic
`
`carvedilol after the patent on the compound was set to expire. Teva originally
`
`submitted a Paragraph IV certification that GSK’s method-of-treatment patents were
`
`invalid. GSK did not sue; it put one patent into reissue proceedings to narrow the
`
`claims, and it delisted the other from FDA’s Orange Book. Dissent 9, 12.
`
`In 2004, FDA tentatively approved Teva’s ANDA with all three indications.
`
`But in 2007, with expiration of the compound patent approaching, Teva decided to
`
`carve out the CHF indication. Its “skinny label” included only the unpatented
`
`indications—hypertension and post-MI LVD. Dissent 8-9.
`
`5
`
`

`

`Case: 18-1976 Document: 116 Page: 16 Filed: 12/02/2020
`
`
`
`Eight companies launched skinny-labeled generic carvedilol in September
`
`2007. GSK did not sue. By 2008, generic carvedilol was selling at $.02 and Coreg
`
`at $2.33 per pill, and GSK had less than 8% of the market. Dissent 12; Appx6769.
`
`In 2008, GSK’s patent reissued as the ’000 patent. The new, narrower method
`
`claimed only some uses of carvedilol to treat CHF—i.e., administered daily, with
`
`one of three specific ACE-inhibitors, for more than six months, for the specific
`
`purpose of decreasing mortality caused by CHF. Op. 5. Only a small fraction of
`
`carvedilol prescriptions—at most 17.1%—were for infringing uses. Op. 18. GSK
`
`did not then assert its reissue patent.
`
`In 2011, after GSK’s original method-of-use patents had been delisted, FDA
`
`directed Teva to amend its carvedilol label to add the information that had previously
`
`been carved-out, and Teva did so. Op. 6.
`
`2.
`
`In 2014, eleven months before the ’000 patent expired, GSK sued Teva
`
`for inducing infringement. Op. 6. GSK sought nearly $750 million in lost profits—
`
`ten times Teva’s revenue from all carvedilol sales ($74.5 million, for a net loss of
`
`$13 million). Dissent 13 & n.3.
`
`GSK sought to prove inducement to the jury through its expert, Dr.
`
`McCullough, who GSK represented would “absolutely” testify that he read and
`
`relied upon Teva’s labels in making infringing prescriptions. Dissent 14. But on the
`
`stand, Dr. McCullough testified that he did not read Teva’s label before he started
`
`6
`
`

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`Case: 18-1976 Document: 116 Page: 17 Filed: 12/02/2020
`
`
`
`administering carvedilol, that nothing changed in his prescribing practices after
`
`generic launch, and that generic substitution happened “automatic[ally]” at
`
`pharmacies. Dissent 14-15.
`
`The jury nonetheless awarded GSK $235 million in damages.
`
`3.
`
`The district court (Stark, C.J.) granted Teva JMOL. Appx1-27 (313 F.
`
`Supp. 3d 582 (D. Del. 2018)). The court concluded that there was no evidence
`
`Teva’s skinny label caused physicians to infringe, both because it did not encourage
`
`the patented method-of-use, and because both sides’ physician witnesses testified
`
`that they did not read Teva’s label before prescribing carvedilol. Appx13-15.
`
`The court also examined the other materials GSK introduced: press releases
`
`(both predating the patent) announcing tentative and final FDA approval,5 and
`
`product catalogs that described generic carvedilol as the AB-rated generic equivalent
`
`of Coreg. None included the elements of the claimed method. And as the district
`
`court recognized, accurately stating that generic carvedilol was AB-rated by FDA—
`
`found therapeutically equivalent, as labeled, to Coreg—did not even arguably
`
`advocate infringement of the patented method. Appx15-16.
`
`
`5 The 2004 press release announced FDA’s “tentative approval,” stating that
`“Carvedilol Tablets are the AB-rated generic equivalent of GlaxoSmithKline’s
`Coreg® Tablets and are indicated for treatment of heart failure and hypertension.”
`Appx6347. Only later did Teva carve-out CHF. Subsequently, the 2007 press
`release announced final approval of Teva’s “Generic version of GlaxoSmithKline’s
`cardiovascular agent Coreg® (Carvedilol) Tablets.” Appx6342.
`
`7
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`Case: 18-1976 Document: 116 Page: 18 Filed: 12/02/2020
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`Furthermore, even if these materials could have encouraged infringement, the
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`district court concluded, a “vast amount of evidence” from both parties’ experts
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`showed that they had not caused infringement. Appx20. GSK provided no evidence
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`that physicians had relied on Teva’s label, product guides, or press releases in
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`prescribing carvedilol. And overwhelming evidence showed that doctors’
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`prescribing decisions were driven by other sources, including GSK’s promotion and
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`cardiologists’ standards of care. Appx18-21.
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`The district court also concluded that GSK did not present substantial
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`evidence to support causation after Teva amended its label, because GSK conceded
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`that after the label amendment, physicians’ practices and GSK’s market share were
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`unaffected. Appx24.
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`4.
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`This Court disagreed, over Chief Judge Prost’s 33-page dissent. For
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`evidence of inducement, it pointed to Teva’s labels (including the skinny label),6
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`product catalogs, and pre-patent press releases, and to testimony that Teva expected
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`to “get sales” resulting from CHF prescriptions. Op. 14, 16.
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`As to causation, the majority held that the district court “applied an incorrect
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`legal standard,” and that GSK was not required to prove that Teva actually
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`influenced doctors. Op. 16. The majority stated that once a plaintiff proves that a
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`6 The majority did not suggest that the skinny label actually instructed the patented
`method.
`
`8
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`Case: 18-1976 Document: 116 Page: 19 Filed: 12/02/2020
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`defendant marketed “an identical product” with the expectation that it would
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`(sometimes) be used for “infringing activity, the criteria of induced infringement are
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`met.” Id.
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`Chief Judge Prost dissented. She observed that “Teva did everything right—
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`proceeding precisely as Congress contemplated” by “launch[ing] its low-cost
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`generic carvedilol for unpatented uses using a skinny label” that “never stated that
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`[Teva’s product] was approved, or could be used, to treat CHF.” Dissent 8, 10. She
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`explained that the majority contradicted longstanding circuit precedent holding that
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`a generic label that carves out the patented method-of-use cannot induce
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`infringement, Dissent 19-20; that inducement requires an affirmative act that
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`encourages others to infringe an already-issued patent, Dissent 23-25; and that an
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`inducer’s communications must actually cause others to infringe to support
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`inducement liability, Dissent 21, 27-32.
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`Chief Judge Prost recognized that the practical implications were enormous:
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`the majority’s decision both “nullifies Congress’s statutory provision for skinny
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`labels,” by “creating infringement liability for any generic entering the market with
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`a skinny label,” and “discourages generics from entering the market in the first
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`instance.” Dissent 3, 17-19, 32-33.
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`9
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`Case: 18-1976 Document: 116 Page: 20 Filed: 12/02/2020
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`ARGUMENT
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`
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`The panel’s multiple departures from longstanding precedent threaten
`any product with a carve-out.
`
`The panel’s decision contradicts multiple lines of settled precedent,
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`eviscerates the Section viii carve-out statute, and throws inducement doctrine into
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`disarray. Even a generic manufacturer that does “everything right” risks a jury
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`verdict awarding up to six years of lost profits, and has no hope of summary
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`judgment or JMOL. Dissent 2. The same evidence deemed “sufficient” here—e.g.,
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`knowledge that third parties might infringe or truthful references to FDA’s
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`“therapeutic equivalence” rating—will be available in any carve-out case. The
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`effects of these departures from precedent are seismic.
`
`A. The panel’s decision nullifies the carve-out statute.
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`The entire point of the carve-out statute is to allow access to generic drugs
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`with non-infringing uses. “[O]ne patented use”—especially one as narrow as
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`GSK’s—cannot be allowed to block competitors from “marketing a generic drug for
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`other unpatented ones.” Caraco, 566 U.S. at 415. But by upholding massive liability
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`for distributing an unpatented product, even without having encouraged the patented
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`method, the panel enabled just such a block. Its holding directly contradicts this
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`Court’s carve-out precedent in multiple respects—without trying to distinguish it.7
`
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`7 Commentators have noted that “[s]urprisingly, the majority’s decision does not
`even discuss the statutory framework permitting skinny labeling.” Paul Dietze et
`
`10
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`Case: 18-1976 Document: 116 Page: 21 Filed: 12/02/2020
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`1.
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`Crucially, “mere knowledge of possible infringement by others does
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`not amount to inducement; specific intent and action to induce infringement must be
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`proven.” Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1364 (Fed. Cir.
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`2003). For exactly that reason, this Court squarely rejected the notion that a carved-
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`out product induces infringement based on “market realities”—i.e., “even if [the]
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`generic drug is formally approved only for unpatented uses, pharmacists and doctors
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`will nonetheless substitute the generic for all indications.” AstraZeneca, 669 F.3d
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`at 1380. A generic manufacturer’s “knowledge is legally irrelevant” if a physician
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`writes an infringing prescription “without inducement.” Warner-Lambert, 316 F.3d
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`at 1364 (emphasis added). That is especially true “where a product has substantial
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`noninfringing uses,” as carvedilol did. Id. at 1365; Op. 18.
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`The majority flouted that rule. It focused on testimony that Teva “expect[ed]”
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`to “get sales” representing carvedilol prescribed for the carved-out indication. Op.
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`14. And it wrongly equated that expectation with encouraging “direct infringing
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`activity.” Op. 16. That testimony is no different from the evidence of pharmacy
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`substitution and other “market realities” advanced in AstraZeneca and Warner-
`
`Lambert, which this Court rejected because it “would, in practice, vitiate [Section
`
`
`al., Fed Circ. Ruling Is Troubling for Generic Drug Manufacturers, Law360 (Oct.
`21, 2020), https://www.law360.com/articles/1320956/fed-circ-ruling-is-troubling-
`for-generic-drug-manufacturers; accord Silbersher, supra (“majority opinion
`strangely fails to address” the carve-out precedents).
`
`11
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`viii] by enabling … infringement claims despite the [carve-out].” AstraZeneca, 669
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`F.3d at 1380; see Warner-Lambert, 316 F.3d at 1364-65 (rejecting inducement
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`argument even “assuming that [the generic] is ‘counting on’ sales for off-label
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`uses”); Takeda, 785 F.3d at 633. The panel’s decision will equally “vitiate” Section
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`viii: plaintiffs can offer this type of testimony in literally every carve-out case.
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`Dissent 20, 32.
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`2.
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`The panel struck a second blow to Section viii with its equally limitless
`
`view of active inducement. It relied on Teva’s skinny label, without disputing that
`
`the CHF indication was fully carved-out, and on accurate descriptions of Teva’s
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`product as an AB-rated generic equivalent to Coreg. These facts will exist in literally
`
`any carve-out case. Again the panel refused to acknowledge, much less distinguish,
`
`the caselaw it shredded.
`
`For a generic to induce infringement with a skinny-labeled product, it “must
`
`encourage, recommend, or promote infringement” of the patented method. Takeda,
`
`785 F.3d at 631 (rejecting inducement claim where label mentioned but did not
`
`instruct the patented use); accord Warner-Lambert, 316 F.3d at 1364; Allergan, Inc.
`
`v. Alcon Labs., 324 F.3d 1322, 1333-34 (Fed. Cir. 2003); Grunenthal GMBH v.
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`Alkem Labs. Ltd., 919 F.3d 1333, 1336 (Fed. Cir. 2019); see also Bayer Schering
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`Pharma AG v. Lupin, Ltd., 676 F.3d 1316, 1321, 1324 (Fed. Cir. 2012). And in the
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`rare case where this Court has found inducement, the key was the label’s content
`
`12
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`(which carved out too little); plaintiffs cannot rely “