On March 29, 2023, the Solicitor General of the United States asked the Supreme Court to review a Federal Circuit judgment in a Hatch-Waxman case between Teva and GSK. In its decision below, the Federal Circuit held that Teva could be held liable for inducement based on language in its “skinny label” and reinstated a $235 million jury award to GSK that the district court had set aside. The question at the heart of the case—as framed by Teva—is: “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?”
In a recent filing, the Solicitor General told the Supreme Court that “[t]he decision below subverts the balance struck by Congress, creates significant uncertainty for [the] FDA and generic manufacturers, and invites gamesmanship by brand-name manufacturers.” The Solicitor General’s caution echoes similar concerns expressed by not only Teva in its pending petition for writ of certiorari, but also the judges on the Federal Circuit who dissented in the decision below, numerous legal commentators, and generic manufacturers.
Under the Hatch-Waxman Act, a generic manufacturer may seek approval to market a generic drug product by filing an abbreviated new drug application with the FDA. The Act lays out three pathways for a generic to plan its launch of a generic version of the reference drug. One of the pathways—which is at issue here—is the Hatch-Waxman Act’s carve-out or “skinny label” provision. If all patents on the reference drug molecule have expired and only method of use patents remain in force, a generic can submit a statement to the FDA that it will launch with a “skinny label” that carves out any patented use. As Teva’s argument goes, brands are required to identify the patented uses of their drugs to the FDA, and generics can and routinely do use that information to determine what to carve out from their labels. Here, the FDA sent Teva a redlined label showing what to carve out based on the patented use that GSK had previously identified to the FDA. Teva argues that its adherence to the FDA’s instructions on what to exclude from its skinny label should have provided it with a safe harbor. Stressing the significance of the dispute, Teva warns that the Federal Circuit decision below will have “profound implications” absent the Supreme Court’s intervention as generics may be exposed to liability for induced infringement “based on stray sections of the label providing information about unpatented uses.”
GSK has opposed Teva’s request for Supreme Court review. According to GSK, Teva’s warnings about the consequences of the decision below are overstated, arguing that this dispute “concerns circumstances highly unlikely to be repeated . . . .” GSK argues that Teva has framed the question presented incorrectly and ignored “the substantial evidence supporting the finding that its carve-out, or partial, label encourages a patented use . . . .” GSK also argues that the FDA’s rules concerning disclosure of patent information and use codes for Orange Book listing have changed and, thus, the regulatory issues in the case are moot.
Given the criticism of and concerns regarding the Federal Circuit’s decision below, whatever decision the Supreme Court makes regarding Teva’s petition will send ripples throughout the drug industry. If the Supreme Court denies the petition, to many that may signal the end of the skinny label safe harbor. If the Supreme Court grants the petition, it will have an opportunity to clarify whether an FDA-approved skinny label may evidence specific intent to induce infringement and identify what other facts may be relevant for determining induced infringement.
Editor: Brenden S. Gingrich
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