GlaxoSmithKline LLC v. Teva Pharms. USA, Inc.

Case Name: GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., No. 2018-1976, -2023 (Fed. Cir. Oct. 2, 2020) (Circuit Judges Prost, Newman, and Moore presiding; Opinion by Newman, J.; Dissent by Prost, C.J.) (Appeal from D. Del., Stark, C.J.) 

Drug Product and Patent(s)-in-Suit: Coreg® (carvedilol); U.S. Patent No. RE40,000 (“the ’000 patent”)

Nature of the Case and Issue(s) Presented: U.S. Patent No. 4,503,067 (“the ’067 patent”) claimed carvedilol and expired in 2007. Carvedilol was initially approved for the treatment of hypertension. In May 1997, the FDA approved carvedilol for the additional treatment of congestive heart failure (“CHF”) and U.S. Patent No. 5,760,069 (“the ’069 patent”) was issued in June 1998 to cover the method of such a treatment. Teva filed its ANDA, which included a Paragraph III certification as against the ’067 patent and a Paragraph IV certification as against the ’069 patent, in 2002. Teva received FDA “tentative approval” for this ANDA in 2004, “for treatment of heart failure and hypertension,” to become effective on expiration of the ’067 patent, and issued a press release to this effect.

In November 2003, GSK filed an application to reissue the ‘069 patent, and the ’000 patent was issued in early 2008. The limitations added by reissue included: “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.” When the ’067 patent expired, Teva launched its ANDA product. The indications listed in Teva’s ANDA product were: (i) “Left Ventricular Dysfunction following Myocardial Infarction . . .;” and (ii) “Hypertension … .” In 2011, the FDA required Teva to amend its carvedilol label to be identical to that of GSK’s Coreg labeling, and Teva made that change, adding the indication for treatment of heart failure

GSK sued Teva in July 2014 for induced infringement of the ’000 patent. Trial was to a jury. Teva argued that since it had omitted—via a section viii “carve out”—from its initial label the indication for treatment of congestive heart failure, it could not be found to induce prescribing physicians to infringe the ’000 patent, at least not before Teva amended its label. Teva also argued that to establish liability for induced infringement, GSK had to prove that Teva directly communicated with the direct infringers and “caused” them to directly infringe the method in the ’000 patent. The jury found that Teva willfully induced infringement and assessed damages in the amount of approximately $235 million, for both the pre- and post-amendment periods. Teva moved for judgment as a matter of law, arguing that “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.” The district court concluded that “substantial evidence does not support the jury’s finding on causation, and therefore does not support its verdict that Teva is liable for induced infringement, during both the skinny and full label periods.” GSK appealed, and the Federal Circuit vacated and remanded.

Why GSK Prevailed: In its 2004 press release, Teva acknowledged that its ANDA product was an AB-rated equivalent of GSK’s Coreg. Witnesses for both sides testified that cardiologists knew of carvedilol and the uses established for Coreg. GSK’s witness testified that an AB rating led doctors to believe that the generic was “therapeutically interchangeable” and that if a prescribing doctor were to write “Coreg” on a prescription, the patient would get the generic unless the doctor were to explicitly write “dispense as written” or “DAW.” Moreover, Teva’s expert admitted that the “carve out” strategy was a legal one, not a commercial one, and that Teva would still get sales where the doctor prescribed carvedilol for CHF. GSK’s regulatory expert also testified about what it meant to be AB rated: “if the generic drug is used in accordance with its label, you would expect it to have the same clinical effect” as the brand drug. Teva’s product catalog also explicitly compared Teva’s carvedilol with Coreg, thereby implying the use of the brand product.

The Federal Circuit dismissed Teva’s argument that its 2004 and 2007 press releases were not evidence of inducement because the ’000 patent had not issued until 2008, by relying on the fact that the 2007 press release, and other promotional material that predated the issuance of the ’000 patent, remained on Teva’s website throughout the life of the ’000 patent. 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.”

Therefore, the Federal Circuit found that the district court, in granting JMOL, applied an incorrect legal standard in determining that there was not legally sufficient evidence to support that Teva encouraged infringement. On the contrary, the Federal Circuit found that “there was ample record evidence of promotional materials, press releases, product catalogs, the FDA labels, and testimony of witnesses from both sides, to support the jury verdict of inducement to infringe the designated claims for the period of the ’000 reissue patent.” The majority opinion also noted that the dissenting opinion make new factual findings concerning the Teva press releases and product catalogs.

On the issue of damages, on appeal, Teva did not challenge the amount of damages awarded by the jury, but argued that, on correct instructions, Teva would have incurred no damages, or at most only a reasonable royalty. According to Teva, the jury should have been instructed that GSK must prove that, for every infringing sale made by Teva, the direct infringer would have purchased the prescribed carvedilol as GSK’s Coreg, and not from another generic producer. The district court declined to present that instruction. The Federal Circuit found that the jury instructions were in conformity to law and sustained the damaged verdict, which were not otherwise challenged by Teva.

Chief Judge Prost penned a substantive and lengthy dissent rooted in policy. She wrote that the majority opinion undermined the “critical balance” found in ANDA litigation “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.” Teva’s “skinny label” approach, according to the dissenting opinion, was enacted by Congress for exactly the circumstances that existed in this case, namely, that the “lone method covered in the ’000 patent would not foreclose access to more affordable carvedilol.” Teva waited until the carvedilol compound expired before launching its ANDA product. By that time, GSK could not rely on Teva’s ANDA as an artificial act of infringement and had to prove induced infringement by showing “that Teva actually caused doctors to directly infringe the ’000 patent.” According to Chief Judge Prost, no communication from Teva encouraged doctors to use generic carvedilol to practice the patented method, and no evidence showed that doctors relied on Teva’s label. “This holding is no small matter: it nullifies Congress’s statutory provision for skinny labels—creating liability for inducement where there should be none. Contrary to Congress’s intent, the Majority thereby allows one patented method to discourage generics from marketing skinny labels—thus, slowing, rather than speeding, the introduction of low-cost generics.”