Beyond Skinny Labels: Supreme Court Clarifies Limits of Induced Infringement Claims

On June 4, in Hikma Pharmaceuticals USA Inc. v. Amarin Pharma, Inc., the Supreme Court unanimously reversed the Federal Circuit, holding that a complaint for induced infringement must “plausibly allege” that the generic drug manufacturer took affirmative steps to encourage a third party’s direct infringement of the patented method of use.

Background

In 2012, the FDA initially approved Amarin’s icosapent ethyl drug, Vascepa^® for treating severe hypertriglyceridemia (SH-indication), and Amarin obtained method-of-use patents covering this indication. In 2019, the FDA approved Vascepa^® for a second indication, certain cardiovascular uses in statin-treated patients (CV-indication), prompting Amarin to obtain additional method-of-use patents for this new use.

The Dispute

The dispute arose when Hikma sought FDA approval for a generic version of Vascepa^® and submitted an Abbreviated New Drug Application (ANDA) with a Paragraph IV certification in compliance with the Hatch-Waxman Act. A Paragraph IV certification asserts either that the generic manufacturer’s ANDA will not infringe on the brand-name drug’s existing patents or that the relevant method-of-use patent is invalid entirely. Hikma opted for the latter, and Amarin’s SH-indication method-of-use patents were then invalidated by a district court. Hikma subsequently obtained FDA approval for a section viii skinny label of the SH-indication. A skinny label is a carve-out mechanism that allows a generic manufacturer to obtain FDA approval to enter the market for non-patented indications. Hikma’s skinny label excluded the patented CV-indication and only claimed the SH-indication.

Nevertheless, Amarin alleged that Hikma actively induced others to infringe its CV-indication patents because Hikma removed a limitation from its skinny label, used a study that had a similar patient population, advertised to a similar target population, and cited the FDA rating on its website. The district court granted Hikma’s motion to dismiss, but the Federal Circuit held that a medical professional could plausibly find instructions to infringe in Hikma’s skinny label. Hikma petitioned for a writ of certiorari.

The Supreme Court’s Holding

Under 35 § U.S.C. 271(b), three elements are required to be liable for induced infringement of a patent: (1) direct infringement by a third party; (2) specific intent or knowledge of infringement; and (3) active steps to encourage infringement. Here, the Supreme Court focused on the third element of “active steps” and applied the well-established federal plausibility pleading standards. The Supreme Court held that a brand-name manufacturer must plausibly allege that the generic drug manufacturer took action to encourage infringement of the patented method of use. Amarin’s arguments failed to meet this standard. Moreover, the Supreme Court emphasized that plausibility requires clear factual allegations that support a reasonable inference of inducement. On the facts alleged, general promotional statements, product descriptions, and allegations of equivalence were insufficient to plausibly show affirmative steps to induce infringement. Additionally, allegations concerning FDA ratings and therapeutic equivalence, alone, did not plausibly establish that affirmative conduct induced infringement.

Why It Matters

Recent Federal Circuit skinny-labeling cases have suggested that induced infringement may be plausibly alleged where a medical professional could read the generic manufacturer’s label as instruction or encouragement to infringe. However, the Supreme Court emphasized that the focus of induced infringement claims against a generic drug manufacturer is whether they actively encouraged a third-party’s infringement. As such, the outcome of this case has the potential to affect litigation pertaining to induced infringement in other industries.

For more information on this topic, please contact Fitch Even associate Lindsay Boehme, author of this alert.

Fitch Even summer associate Isabel Liokumovich contributed to this alert.