The Supreme Court of the United States has agreed to resolve a question of patent infringement liability: can advertising a product as a “generic”—without more details—give rise to liability for induced infringement? The decision could have far-reaching implications beyond patent infringement to impact all types of civil cases.
The dispute in Hikma Pharmaceuticals USA Inc. v. Amarin Pharma, Inc. (Docket No. 24-889) concerns generic drug manufacturers’ liability for induced patent infringement. The Supreme Court granted certiorari on two issues, the first of which is limited to the pharmaceutical industry: whether generic drug manufacturers may advertise their products as “generics” for name-brand drugs whose uses are still under patent. When patents protect name-brand drugs’ uses for specific medical issues, generics are often approved for other uses—which are not protected by the patent. These limited FDA approvals “carve out” the patented uses from the generic’s label; they are sometimes called “skinny labels” and are permitted under the federal Hatch-Waxman Act. It is well understood that generic drugs can be prescribed off-label, including for uses still under patent by name-brand drugs.
The Supreme Court will decide whether advertising a skinny-label generic as a “generic” for the brand-name drug—that is, without limiting the advertising to the generic’s approved uses—can make the generic’s manufacturer liable for induced patent infringement. “Skinny label” generics are a compromise struck under federal law, permitting generics to enter the market while still respecting brand-name drugs’ patent rights. If marketing them creates unavoidable liability, generic manufacturers will be disincentivized from entering the market.
More broadly, the second question presented in Hikma v. Amarin applies to induced patent infringement writ large. That question asks whether a patent owner’s claim for induced patent infringement is adequately pleaded without any allegation that the inducer instructed, encouraged or even referenced the patented use.
Induced patent infringement, 35 U.S.C. § 271(b), requires that a third party infringe the patent following the defendant’s inducement of that third party’s acts. The defendant must induce the third party with knowledge that the induced acts amount to infringement. Inducement involves the defendant’s “recommending, encouraging, or promoting an infringing use.” Takeda Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 631 (Fed Cir. 2015). The Supreme Court will now decide how, and how specifically, those elements must be pleaded.
The decision on review by the Court of Appeals for the Federal Circuit held that Hikma, the generic drug’s manufacturer, could be liable for induced infringement based on its advertising of a generic drug. The Federal Circuit reasoned that Amarin plausibly pleaded induced infringement of its name-brand drug Vascepa® by Hikma’s generic drug label and marketing materials. Hikma’s marketing materials included broad statements that its drug was “generic Vascepa®” without limitation to the “skinny label” approved uses. And in touting the potential market for its generic product, Hikma’s marketing materials included sales and usage data for brand-name Vascepa® generally—again, not limited to the specific uses for which Hikma’s generic was approved. The Federal Circuit ruled that Amarin’s allegations survived a motion to dismiss by Hikma.
Importantly, Amarin’s allegations depend on the impact of Hikma’s marketing statements on third parties who might infringe by using the generic to treat a patented medical issue. The Federal Circuit held that the impacts of Hikma’s statements were questions of fact and thus could not be resolved at the pleading stage. The Federal Circuit reasoned that, based on the totality of the circumstances, Amarin had plausibly alleged that Hikma’s messaging impacted physicians and other third parties with the requisite recommendation, encouragement or promotion of infringing uses.
In resolving this question of induced infringement, the Supreme Court is expected to balance weighty considerations including the First Amendment’s freedom of speech, the rights of patent holders against infringers and the Hatch-Waxman Act’s statutory framework for generic drug approvals. The decision is expected to have ramifications for all types of patents, from computer software to automobile parts. And because the matter is being heard at the pleading stage, the decision could impact the pleading standards for all types of civil cases.
The Supreme Court had previously declined to take up this question, despite an opportunity to do so in 2022. In GlaxoSmithKline v. Teva, the Court declined to take it up despite the executive branch urging them to. Here, too, the executive branch suggested that the Court take the case to reverse the Federal Circuit. It is not clear why the Court has now taken an interest in this issue, but the grant of certiorari suggests an appetite to reverse the Federal Circuit and extinguish liability for these claims.
The case has not yet been set for oral argument but is expected to be heard this spring. An opinion is expected by the end of June. If you have any questions, please contact your Dinsmore intellectual property attorney.