Federal Circuit Upholds Finding of Induced Infringement Based on Drug’s Label Instructions

In Sanofi v. Watson Laboratories et al., the Federal Circuit affirmed the United States District Court for the District of Delaware’s ruling that the defendants’ sale of their proposed generic drugs would induce infringement by physicians, as well as the district court’s rejection of the defendants’ obviousness arguments and finding of direct infringement by both defendants. Nos. 2016-2722, 2016-2726, slip op. at 3 (Fed. Cir. Nov. 9, 2017). The patents-in-suit related to a heart rhythm medication, sold as Multaq® by Sanofi. Id. at 2.

Defendants, Watson Laboratories and Sandoz Inc., filed ANDA applications hoping to sell generic versions of Multaq® and certified their belief that Sanofi’s two patents, U.S. Patent Nos. 8,318,800 and 8,410,167, were invalid or not infringed. Id. Upon receiving notice of defendants’ ANDA applications, Sanofi brought suit for infringement. Id. After a three-day bench trial, the district court concluded, in relevant part, that the defendants’ sale of their proposed generic drugs, coupled with their respective product labels, would induce physicians to infringe all but one of the asserted claims. Id. at 3.

On appeal, the Federal Circuit engaged in a lengthy discussion evaluating what it means “to induce” infringement. Id. at 10–16. Under the Patent Act, “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” Id. at 10 (citing 35 U.S.C. § 271(b)). Here, the inducement analysis focused on the connection between the label applied to the drug and a physician’s administration of the drug to the claimed class of patients. Id. at 11. In the pharmacological context, the Federal Circuit reiterated “[w]hen proof of intent to encourage depends on the label accompanying the marketing of a drug, the label must encourage, recommend, or promote infringement.” Id. at 13 (citations and quotations omitted).

In evaluating the record, the Court concluded that the district court relied on the proper standards and arrived at the correct conclusion: “The label [] directs medical providers to information identifying the desired benefit for only patients with the patent-claimed risk factors.” Id. at 14. The Court pointed to ample evidence in the record to support this finding, noting that the defendants’ own expert acknowledged that persons of ordinary skill in the art “look[] to drug labels, in part, for information about the use of a drug in special or specific populations and that it is important for the [person of skill] to look at the label’s indications section to see if a drug is indicated for administration to patients of certain characteristics with a certain intent.” Id. at 15 (quotations omitted).

Finally, the Court summarily rejected Defendants’ argument that Multaq® has “substantial noninfringing uses not forbidden by the proposed labels,” explaining that “there is no legal or logical basis for the suggested limitation on inducement” and pointing out that this is a required element of contributory infringement under section 271(c). Id. at 15. The Court held that there was no reason to have a different inducement rule for drug labels. Id. at 16.

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