U.S. Supreme Court Weighs In on "Skinny Labels" and Inducement

Background

In Hatch-Waxman Act litigation, which typically occurs before a generic drug is approved by the FDA, innovator pharmaceutical companies often look to the generic producer's labeling to show that its instructions will induce healthcare practitioners to infringe the innovator's patents covering the drug's intended uses. The long-held standard for inducement requires "active" encouragement by the generic manufacturer. This gets complicated when a branded drug has multiple FDA-approved indications, as a generic drugmaker may "carve out" one or more of the approved uses from its labeling to avoid the innovator's patents, a practice called "skinny labeling." Without express infringing instructions in the generic's labeling, the patent holder must provide additional, typically circumstantial, evidence to assert induced infringement.

In this dispute, Hikma sought FDA approval for a generic version of Amarin's Vascepa^®, which is approved for severe hypertriglyceridemia ("SH") and cardiovascular ("CV") risk reduction. To avoid Amarin's patents covering the CV use, Hikma pursued a "section viii carve-out" and sought approval only for the SH indication. After Hikma launched its generic, Amarin sued for induced infringement of the CV patents under § 271(b), targeting: (i) Hikma's initial inclusion of CV indication language in the proposed labeling even though it was later carved out; (ii) press releases calling the product "generic Vascepa^®" and citing total Vascepa^® sales figures (i.e., including CV indication sales); and (iii) Hikma's website describing the drug as AB rated (i.e., therapeutically equivalent) for "hypertriglyceridemia," which is broader than the SH indication. The Delaware District Court dismissed the case, but the Federal Circuit reversed, finding it "at least plausible that a physician could read" Hikma's labeling, website, and press releases as "an instruction or encouragement to infringe."

The Supreme Court's Opinion

The Supreme Court unanimously reversed, holding that Amarin failed to state a claim for active inducement under 35 U.S.C. § 271(b). The Court criticized the Federal Circuit's focus on whether the relevant statements "could be read by medical providers as instructions to infringe."

Focusing on whether the alleged inducer took active steps to encourage direct infringement, the Court clarified that inducement requires "purposeful, culpable expression and conduct" that is affirmative rather than passive. The Court found each of Amarin's allegations insufficient to sustain its claim for induced infringement.

First, the Court found that identity between generic and brand labeling is required by law and cannot, alone, establish liability. Further, the Court noted that calling a generic "equivalent" to the brand is "normal industry practice," meaning that Hikma's press releases calling its product a "generic equivalent of Vascepa^®" did not invoke liability.

Second, the Court considered Amarin's assertion that Hikma never clarified that its drug was approved only for the SH indication, which could lead healthcare practitioners to understand that the "generic equivalent" was approved for the same indications as the branded product (i.e., also the CV indication). Regardless of whether a prescriber could be or was in fact confused in this way, the Court found that "mere omissions, inactions, or nonfeasance" by Hikma did not amount to evidence of active steps to induce the infringing use. Nevertheless, the Court indicated that active inducement can be achieved through implicit or explicit encouragement, but that the inducement must be "clear" and "affirmative."

Third, even though Hikma's labeling included information about potential side effects for people with CV disease and noted that the drug was sometimes prescribed for off-label use, "vague statements combined with speculation about how medical providers may act" do not constitute "active" inducement. So, too, for the statements on Hikma's website that its drug was "AB rated" and used to treat hypertriglyceridemia.

And finally, Hikma's press releases citing total Vascepa^® sales for both the SH and CV indications were the "vaguest of vague" statements, according to the Court. A prescriber would have to review those press releases, understand that the figures referred to sales for both indications, and "draw from this fact a subtle encouragement" to prescribe Hikma's generic in an infringing manner—a chain of events too tenuous to support Amarin's claim.

Recap

Although the Court found Hikma's statements insufficient for Amarin to plausibly allege "active inducement," it did not foreclose the possibility of off-label infringement theories. Rather, this post-marketing decision reiterates that, to survive dismissal on a "skinny label" inducement claim, the patentee must allege affirmative acts encouraging the carved-out, infringing use. Innovators facing generic competitors operating under "skinny labels" can expect increased scrutiny of § 271(b) claims even in traditional, pre-marketing cases brought under the Hatch-Waxman Act. Therefore, innovators should monitor generic labeling, marketing, and promotional materials for implicit or explicit affirmative encouragement of infringing use.