SCOTUS to Hear Skinny Label Dispute

The skinny label has hit the big time.  Last week, the Supreme Court agreed to hear Hikma v. Amarin to address the burning question of whether a carve-out induces infringement.  As of now, the Federal Circuit has been very clear that a carve-out can induce infringement but whether it does is a fact-specific inquiry under basic patent law.  But that patent law conflicts with an FDA law that expressly permits a carve-out (also called a “skinny label”), leaving generic manufacturers in a bit of a quagmire as to whether the use of a carve-out in and of itself can constitute induced infringement.  Hikma v. Amarin gets to the heart of the question because it involves a Motion to Dismiss rather than a finding of induced infringement, rendering the relevant question how much is necessary to plead induced infringement rather than find induced infringement.  This is significant because the specter of going to court may be enough to dissuade generic companies from using the carve-out, regardless of whether a court finds that, on the specific facts, labeling or statements actually do induce infringement.

As a quick refresher, Amarin sued Hikma in 2022 alleging that Hikma’s generic of Amarin’s Vascepa induced infringement of Amarin’s method of use patents because Hikma’s labeling does not adequately carve out Amarin’s protected cardiovascular indication.    As we explained back in 2022, the District Court of Delaware rejected that suit, granting a Motion to Dismiss finding that Amarin’s failed to state a claim.  Though we didn’t blog on it at the time, this case was appealed, and the Federal Circuit reversed, concluding that Amarin’s allegations plausibly state a claim for induced infringement.

Hikma appealed, arguing that the Federal Circuit’s decision “effectively nullifies” the skinny label when it found that “accurately calling a generic drug the ‘generic version’ of a branded drug and citing public information about the brand (e.g., annual sales) now exposes a generic drugmaker to potential damages for inducing infringement of patents . . . [when] the generic drug is labeled only for an unpatented use.”   Hikma argued that the Supreme Court should grant certiorari because the Federal Circuit decision, in which the Court admitted that Hikma fully carved out the patented uses, creates a “very permissive pleading standard for induced infringement,” which would allow induced infringement allegations to apply to every generic drug with a carve-out, regardless of the claims the generic sponsor makes.  Amarin disagreed with this position, arguing instead that the Federal Circuit correctly decided the case because its “complaint gives rise to a disputed question of fact about whether Hikma’s statements communicated to healthcare providers that they should prescribe Hikma’s generic drug for a patented use.”  Amarin also disputed the impact of the case.

Adding fuel to the fire, the Solicitor General submitted a brief (at the Court’s invitation) urging the Court to take the case.   There, the Solicitor General explained that the Federal Circuit decision “subverts Congress’s balance between competing interests” and that the carve-out “cannot function as Congress intended if a generic manufacturer’s anodyne descriptions of its product create a serious risk of massive patent liability.”

Allegations of induced infringement arising from a carve-out are not new.  They’ve been kicking around for more than 10 years, when GSK brought suit against Teva for inducing infringement of Coreg.  The Supreme Court, however, declined to hear that case, leaving the Federal Circuit’s fact-specific inquiry for any allegation of induced infringement arising from a carve-out in place.

As we noted when the Federal Circuit issued its first decision in GSK v. Teva, these skinny label cases highlight “the delicate balance that Congress tried to walk between intellectual property rights and facilitating generic drug access when passing the Hatch-Waxman Amendments, and how that balance can be upset by a single court decision.”   This remains true.  That one single decision now, however, will come from the highest court rather than the Federal Circuit.