“Noting that the district court applied an incorrect legal standard, the CAFC explained that the ‘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.’”
In GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., the United States Court of Appeals for the Federal Circuit (CAFC) on Friday reversed a district court’s motion for judgment as a matter of law (JMOL) for Teva, finding that Teva was liable for induced infringement of GlaxoSmithKline’s (GSK’s) patent directed to a method of treating Congestive Heart Failure (CHF) using carvedilol.
The Fight for Carvedilol
GSK was the owner of United States Patent No. 4,503,067 (the ’067 patent), which expired on March 5, 2007 and United States Patent No. 5,760,069 (the ’069 patent), which was directed to a method of treating CHF using a combination of carvedilol and “one or more of an angiotensin-converting enzyme (ACE) inhibitor, a diuretic, and digoxin.” The ’069 patent was listed in the FDA’s Orange Book for “decreasing mortality caused by congestive heart failure” and the claimed combination was approved under the name Coreg® in 2003 “for use by patients suffering from left ventricular dysfunction following a myocardial infarction.”
Teva applied for FDA approval of “its generic carvedilol, certifying in the Abbreviated New Drug Application (ANDA) under Paragraph III of the Hatch- Waxman Act that its product would not be launched until the ’067 patent expired in March 2007.” In the application for approval, Teva certified that the ’069 patent was “invalid, unenforceable, or not infringed” and, particularly stated that the claims of the ’069 patent were invalid for anticipation or obviousness. The FCA tentatively approved Teva’s ANDA “for treatment of heart failure and hypertension.” Subsequently in 2003, GSK filed an application to reissue the ’069 patent, for the purposes of adding the following limitation to the claims: “wherein the administering comprises administering to said patient daily maintenance dosages for a maintenance period to decrease a risk of mortality caused by congestive heart failure, and said maintenance period is greater than six months.” The reissue application issued as Reissue Patent No. RE40,000 (the ‘000 patent).
In 2014, GSK filed a suit against Teva and Glenmark Pharmaceuticals USA. A jury found that Teva induced infringement of claims 1-3 of from the issue date of the ‘000 patent. The jury determined damages based on “a combination of lost profits and royalty and found that the infringement was willful.” However, the district court granted Teva’s motion for judgment as a matter of law (JMOL), “stating that the verdict of induced infringement was not supported by substantial evidence because ‘GSK failed to prove by a preponderance of the evidence that Teva’s alleged inducement, as opposed to other factors, actually caused the physicians …to directly infringe, by prescribing generic carvedilol and to do so for the treatment of mild to severe CHF.” GSK appealed to the CAFC, arguing that the district court erred in both law and in fact in granting Teva’s JMOL.
CAFC: The Jury Was Properly Instructed
Applying the standard of the Third Circuit, the CAFC reviewed the district court’s judgment to determine if the district court properly determined that the record was “critically deficient of the minimum quantum of evidence to sustain the [jury] verdict.” On appeal, GSK argued that the district court erred because Teva marketed carvedilol with knowledge and intent of its infringing use, which met the legal requirements of active inducement of infringement. GSK also argued that the district court erred in law because the precedent established that “induced infringement may be shown by evidence that the accused inducer promoted the infringing use with knowledge that such use directly infringes the patent claims.” Teva responded that it was not liable for inducing infringement because “cardiologists already knew of carvedilol and its uses, and Teva did not directly ‘cause’ them to infringe.”
Citing Global-Tech Appliances, Inc. v. SEB S.A., the CAFC explained that the Supreme Court has held that copying of a patented product is evidence of inducing infringement and such inducement is not negated by the direct infringers’ knowledge of the infringing subject matter. The CAFC also cited Warsaw Orthopedic, Inc. v. NuVasive, Inc. in explaining that the element of intent in induced infringement may be proven through circumstantial evidence.
After considering the evidence that was presented to the jury, the CAFC found that the jury was correctly instructed that it could find inducement if Teva “continued to take an action that began before the ’000 patent issued, after the ‘000 patent was issued on January 8, 2008, intending to cause the physicians to directly infringe by administering Teva’s carvedilol product.” The CAFC also noted that the jury properly considered evidence, including Teva’s press releases, expert testimony, and product catalogs. Noting that the district court applied an incorrect legal standard, the CAFC explained that the “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.”
Thus, the CAFC concluded that there was substantial evidence to support the jury’s verdict of induced infringement throughout the term of the ‘000 reissue patent. The CAFC also considered Teva’s arguments regarding damages and concluded that the jury instructions were in “conformity to law” and damages were sustained. The jury’s grant of JMOL was reversed and the CAFC remanded the case to the district court for reinstatement of the jury’s verdicts of infringement and damages.
Chief Judge Prost Dissents
Chief Judge Prost authored a dissenting opinion, wherein she expressed the majority’s opinion undermined a critical balance between patent protection and public access once a patent expires “by allowing a drug marketed for unpatented uses to give rise to liability for inducement and by permitting an award of patent damages where causation has not been shown.” Noting that the district court was correct in granting Teva’s JMOL, Prost noted that the district court carefully considered the evidence GSK presented and concluded that the evidence showed that not even a single doctor was induced to infringe the ‘000 patent based on Teva’s actions. She further pointed out that it was undisputed that Teva’s label did not include treating CHF or the patented method. Prost concluded by explaining that “Teva did everything right [by] using a skinny label [and] taking care not to encourage infringing uses” but it ended up more costly for Teva to sell an unpatented drug for unpatented uses than it would have been to stay out of the market altogether.
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