By Tom Irving and Michelle E. O’Brien
As the co-authors predicted in their presentation at the IPO annual meeting last year, today the Supreme Court denied certiorari in Teva Pharms. USA, Inc. v. GlaxoSmithKline LLC, Case No. 22-37. The materials presented during that meeting, which were prepared with the assistance of Stacy Lewis of Finnegan, can be found here.
In a post-launch (not Hatch-Waxman) case, GSK asserted at the district court that Teva’s partial and full labels infringed its RE40,000 patent covering its Coreg® product, arguing that both labels included a post-MI LVD indication and failed to effectively “carve out” the patented method. Expert testimony by GSK explained how Teva’s labels conveyed to doctors that the treatment decreased mortality caused by congestive heart failure (CHF). Expert testimony also explained how the post-MI LVD indication falls within the definition of CHF. The jury found that Teva had willfully infringed the patent during both the partial and full label periods and awarded GSK $235 million in damages. When the court granted Teva’s motion for judgment as a matter of law (JMOL) reversing the jury’s finding, GSK appealed.
In the first Federal Circuit decision, the court vacated the district court’s grant of JMOL and reinstated the jury verdict and damages award. The Federal Circuit found that substantial evidence, including Teva’s label, promotional materials, catalogues, and press releases, supported the verdict. Judge Prost filed a lengthy dissent and Teva petitioned for rehearing en banc. Panel rehearing was granted, and the decision was vacated.
In the second Federal Circuit decision, the court acknowledged Teva’s argument that the previous decision “could be broadly read to impose liability on ANDA filers that carve out patented uses under section viii when seeking approval to market generic drug products, in direct contravention of the Hatch-Waxman Act.” However, the court pointed out that “[t]his is a case in which substantial evidence supports a jury finding that the patented use was on the generic label at all relevant times” and therefore “Teva failed to carve out all patented indications.” The court therefore again vacated the grant of JMOL and reinstated the jury verdict and damages award.
In its attempt to convince the Supreme Court that the case merited review, Teva stated the question in its cert petition as:
If a generic drug’s FDA-approved label carves out all of the language that the brand manufacturer has identified as covering its patented uses, can the generic manufacturer be held liable on a theory that its label still intentionally encourages infringement of those carved-out uses?
The authors were puzzled by Teva’s question because, like the Federal Circuit, we viewed this as an issue of whether substantial evidence supported the jury verdict. We thought Teva missed the mark.
And on the doomsday policy arguments asserted by Teva, GSK explained in its brief that “[t]he fact-bound nature of the decision is why the decision below does not spell the end of carve-outs.” Consistent with its position at the district court, GSK pointed out that “[a]s long as generics fully and truly carve out the patented use, they can continue to enjoy the carve-out statute’s protection.”
Although the U.S. Solicitor General also weighed in on the public policy aspect saying that the Federal Circuit’s decision threatens the availability of lower-cost generic drugs, the Supreme Court apparently agreed with the authors and GSK that the facts of the case supported the finding and outcome, and that the case was not the proper avenue to address the public policy concerns raised by Teva and supported by the Solicitor.