Petition for Writ of Certiorari — Teva Pharmaceuticals USA, Inc., Petitioner v. GlaxoSmithKline LLC, et al.

Supreme Court briefJul 11, 2022

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IN THE

Supreme Court of the United States

TEVA PHARMACEUTICALS USA, INC.,

Petitioner,

GLAXOSMITHKLINE LLC,

SMITHKLINE BEECHAM (CORK) LIMITED,

Respondents.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Federal Circuit

PETITION FOR A WRIT OF CERTIORARI

DARYL L. WIESEN

CHRISTOPHER T. HOLDING

ELAINE HERRMANN BLAIS

ROBERT FREDERICKSON, III

GERARD J. CEDRONE

WILLIAM E. EVANS

GOODWIN PROCTER LLP

100 Northern Avenue

Boston, MA 02210

WILLIAM M. JAY

Counsel of Record

GOODWIN PROCTER LLP

JAIME A. SANTOS

1900 N Street, NW

Washington, DC 20036

(202) 346-4000

wjay@goodwinlaw.com

July 11, 2022

Counsel for Petitioner

QUESTION PRESENTED

Congress passed the Hatch-Waxman Act to “speed

the introduction of low-cost generic drugs to the market.” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,

566 U.S. 399, 405 (2012). The Act embodies a carefully

crafted legislative compromise. On the one hand, Congress bolstered patent terms for brand-name drug

companies. On the other, it ensured that once a brand

drug is no longer patented, the fact that some of the

drug’s uses remain patented “will not foreclose marketing a generic drug for other unpatented [uses].” Id.

at 415. Instead, a generic manufacturer can sell its

product with a “skinny label” that “carves out” any

patented uses found in the brand drug’s labeling—

and thereby avoid inducing infringement of the

brand manufacturer’s patent rights. See 21 U.S.C.

§ 355(j)(2)(A)(viii). To aid in this process, brand manufacturers must provide a sworn statement to FDA

identifying “the specific section(s)” of their labeling

“that describes the method of use” claimed by their patents. 21 C.F.R. § 314.53(c)(2)(i)(O)(2), (c)(2)(i)(P)(2).

Those are the sections that generic manufacturers

then carve out of their labeling in order to obtain FDA

approval despite the brand manufacturer’s remaining

patents.

The question presented is:

If a generic drug’s FDA-approved label carves out

all of the language that the brand manufacturer has

identified as covering its patented uses, can the generic manufacturer be held liable on a theory that its

label still intentionally encourages infringement of

those carved-out uses?

PARTIES TO THE PROCEEDING

All parties appear in the caption of the case on the

cover page.

RULE 29.6 STATEMENT

Petitioner Teva Pharmaceuticals USA, Inc., is directly owned by Teva Holdco US, Inc., and is an indirect, wholly owned subsidiary of Teva Pharmaceutical

Industries Ltd. Teva Pharmaceutical Industries Ltd.

is the only publicly traded company that owns 10% or

more of Teva Pharmaceuticals USA, Inc.

RELATED PROCEEDINGS

U.S. District Court for the District of Delaware:

GlaxoSmithKline LLC v. Teva Pharmaceuticals

USA, Inc., No. 14-cv-878 (Apr. 25, 2018)

U.S. Court of Appeals for the Federal Circuit:

GlaxoSmithKline LLC v. Teva Pharmaceuticals

USA, Inc., Nos. 2018-1976 and 2018-2023 (Aug. 5,

2021), reh’g denied (Feb. 11, 2022)

TABLE OF CONTENTS

Introduction ................................................................ 1

Opinions Below ........................................................... 3

Jurisdiction ................................................................. 3

Statutory and Regulatory Provisions Involved ......... 4

Statement .................................................................... 4

A. Congress enacts § 271(b), making

“actively induc[ing] infringement of a

patent” itself an act of infringement. ............. 4

B. Congress enacts the skinny-label

statute so that narrow method-of-use

patents do not block the sale of generic

drugs with unpatented uses. .......................... 5

C. Eight manufacturers launch a generic

equivalent of GSK’s unpatented drug

Coreg® with a skinny label omitting the

only use GSK said was claimed by its

remaining patents......................................... 10

D. GSK sues Teva for $750 million for

inducing infringement of the carved-out

use. ................................................................ 12

E. The Federal Circuit resurrects the jury

verdict............................................................ 15

Reasons for Granting the Writ ................................. 20

The Federal Circuit’s distortion of

inducement doctrine and nullification of

Hatch-Waxman’s carve-out provision

warrant this Court’s review. ........................ 22

iii

A. The skinny-label statute and

§ 271(b)’s active-inducement

element speed generic launch by

providing predictability and

security to generic manufacturers......... 22

B. The decision below fundamentally

undermines Congress’s objectives

and defies settled principles of

inducement law. ..................................... 28

C. The decision below has far-reaching

consequences warranting this

Court’s attention. ................................... 32

II. The Court should review this case

without delay. ............................................... 36

Conclusion ................................................................. 39

Appendix A: Opinion of the U.S. Court of Appeals for the Federal Circuit (Aug. 5, 2021) ....... 1a

Appendix B: Opinion of the U.S. Court of Appeals for the Federal Circuit (Oct. 2, 2020) ...... 88a

Appendix C: Order of the U.S. District Court

for the District of Delaware (March 28,

2018) ................................................................ 147a

Appendix D: Memorandum Opinion of the U.S.

District Court for the District of Delaware

(March 28, 2018) .............................................. 149a

Appendix E: Order of the U.S. Court of Appeals

for the Federal Circuit on Petition for Rehearing En Banc (Feb. 11, 2022...................... 182a

Appendix F: Statutory and Regulatory Provisions Involved .................................................. 211a

TABLE OF AUTHORITIES

Cases

A.C. Aukerman Co. v. R.I. Chaides Constr. Co.,

960 F.2d 1020 (Fed. Cir. 1992) ............................... 37

AstraZeneca Pharms. LP v. Apotex Corp.,

669 F.3d 1370 (Fed. Cir. 2012) ................................. 7

Bayer Schering Pharma AG v. Lupin, Ltd.,

676 F.3d 1316 (2012) ...................... 26, 27, 30, 31, 34

Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,

563 U.S. 902 (2011) ................................................ 38

566 U.S. 399 (2012) .............................. 6, 7, 8, 22, 23

Eli Lilly & Co. v. Medtronic, Inc.,

496 U.S. 661 (1990) ................................ 6, 22, 36, 37

Global-Tech Appliances, Inc. v. SEB S.A.,

563 U.S. 754 (2011) .......................................... 24, 25

HZNP Medicines LLC v. Actavis Labs. UT, Inc.,

940 F.3d 680 (Fed. Cir. 2019) ................. 4, 26, 30, 31

Metro-Goldwyn-Mayer Studios Inc. v. Grokster,

Ltd.,

545 U.S. 913 (2005) ............................ 4, 5, 20, 24, 25

Otsuka Pharm. Co. v. Torrent Pharms. Ltd., Inc.,

99 F. Supp. 3d 461 (D.N.J. 2015) ........................... 27

Takeda Pharms. U.S.A., Inc. v. W.-Ward

Pharm. Corp.,

785 F.3d 625 (Fed. Cir. 2015) ........... 7, 25, 26, 27, 31

Tegal Corp. v. Tokyo Electron Co.,

248 F.3d 1376 (Fed. Cir. 2001) ............................... 25

Warner-Lambert Co. v. Apotex Corp.,

316 F.3d 1348 (Fed. Cir. 2003) ............... 5, 22, 27, 35

Water Techs. Corp. v. Calco, Ltd.,

850 F.2d 660 (Fed. Cir. 1988) ................................... 4

Statutes

21 U.S.C. § 355(b)(1)(A)(viii)(I) ................................... 8

21 U.S.C. § 355(b)(1)(A)(viii)(II) .................................. 8

21 U.S.C. § 355(j)(2)(A)(iv) .......................................... 5

21 U.S.C. § 355(j)(2)(A)(v).......................................... 28

21 U.S.C. § 355(j)(2)(A)(vii)(I) ..................................... 6

21 U.S.C. § 355(j)(2)(A)(vii)(II) .................................... 6

21 U.S.C. § 355(j)(2)(A)(vii)(III)................................... 6

21 U.S.C. § 355(j)(2)(A)(vii)(IV) ................................... 6

21 U.S.C. § 355(j)(2)(A)(viii) .................................. 6, 24

21 U.S.C. § 355(j)(4)(F) ................................................ 5

28 U.S.C. § 1254(1) ...................................................... 3

35 U.S.C. § 251........................................................... 11

35 U.S.C. § 271(b) .............................................. 2, 4, 24

35 U.S.C. § 271(e)(1) .................................................. 36

35 U.S.C. § 271(e)(2)(A) ............................................... 6

Drug Price Competition and Patent Term

Restoration Act of 1984,

Pub. L. No. 98-417, 98 Stat. 1585 ............................ 5

Pub. L. 593, 66 Stat. 792 (1952) .................................. 4

Regulations

21 C.F.R. § 314.53(c)(2)(i)(O) ..................... 8, 23, 28, 33

21 C.F.R. § 314.53(c)(2)(ii)(P) ...................................... 8

21 C.F.R. § 314.53(c)(2)(ii)(P)(3) .................................. 8

21 C.F.R. § 314.94(a)(7)(i)............................................ 5

68 Fed. Reg. 36,676 (June 18, 2003) ....................... 8, 9

Other Authorities

Cong. Rsch. Serv., R46221, Drug Pricing and

Pharmaceutical Patenting Practices (2020),

https://sgp.fas.org/crs/misc/R46221.pdf ................. 35

Paul Dietze et al., Fed Circ. Ruling Is

Troubling for Generic Drug Manufacturers,

Law360 (Oct. 21, 2020), https://www.law360.

com/articles/1320956 .............................................. 16

Judith A. Johnson, Cong. Rsch. Serv., R44703,

Generic Drugs and GDUFA Reauthorization:

In Brief (2017) ......................................................... 23

Dani Kass, Generics Worry Fed. Circ. Blew Up

‘Routine’ Labeling Practice, Law360 (Oct. 7,

2020), https://www.law360.com/articles/

1317312/generics-worry-fed-circ-blew-uproutine-labeling-practice ........................................ 17

Dani Kass, GSK Redo Doesn’t Cure Generics’

‘Skinny Label’ Uncertainty, Law360 (Aug. 9,

2021), https://www.law360.com/articles/

1410679/gsk-redo-doesn-t-cure-genericsskinny-label-uncertainty ........................................ 19

Kyu Yun Kim et al., A Major Decision

Evaluating the Effect of a Skinny Label in a

Post-Launch, Non-Hatch Waxman Litigation,

Jury Trial World, Mondaq (Oct. 15, 2020),

https://www.mondaq.com/unitedstates/

patent/994650/a-major-decision-evaluatingthe-effect-of-a-skinny-label-in-a-post-launchnon-hatch-waxman-litigation-jury-trial-world ...... 17

vii

Daniel Knauss et al., Fed. Circ. Teva Ruling

May Shake Up Skinny Label Strategies,

Law360 (Sept. 1, 2021), https://www.law360.

com/articles/1417824/fed-circ-teva-rulingmay-shake-up-skinny-label-strategies .................. 19

Sara W. Koblitz, Ding Dong Is the Skinny

Label (Effectively) Dead?, FDA Law Blog

(Sept. 7, 2021), https://www.thefdalawblog.

com/2021/09/ding-dong-is-the-skinny-labeleffectively-dead ....................................................... 18

Letter from Janet Woodcock, Acting

Commissioner of Food and Drugs, to Andrew

Hirshfeld, U.S. Patent and Trademark Office

2-5 (Sept. 10, 2021), https://pink.pharmaintell

igence.informa.com/-/media/supporting-docum

ents/pink-sheet/2021/09/fda-letter-to-pto.pdf ........ 35

Peter S. Menell, Patent Case Management

Judicial Guide § 8-5 (3d ed. 2015) ......................... 37

Kevin E. Noonan, GlaxoSmithKline LLC v.

Teva Pharmaceuticals USA, Inc. (Fed. Cir.

2020), Patent Docs (Oct. 8, 2020), https://

www.patentdocs.org/2020/10/glaxosmith

kline-llc-v-teva-pharmaceuticals-usa-inc-fedcir-2020.html........................................................... 17

Zachary Silbersher, Can Amarin Benefit from

the GSK v. Teva Decision Regarding Induced

Infringement for Off-Label Sales?, Markman

Advisors (Oct. 7, 2020), https://www.mark

manadvisors.com/blog/2020/10/7/can-amarinbenefit-from-the-gsk-v-teva-decision-regard

ing-induced-infringement-for-off-label-sales ......... 16

viii

Khadijah M. Silver, Teva’s Generic Label Not

Skinny Enough To Protect from $234M

Damages to GSK, MedCityNews (Aug. 6,

2021), https://medcitynews.com/2021/08/

tevas-generic-label-not-skinny-enough-toprotect-from-234m-damages-to-gsk ....................... 18

Ed Silverman, ‘Skinny Label’ for Generic

Version of a Pricey Cancer Drug Cut Costs for

Consumers, Stat (Jan. 11, 2022), https://

www.statnews.com/pharmalot/2022/01/11/

skinny-label-generic-gleevec-cancer ...................... 32

U.S. Dep’t of Health & Human Servs.,

Comprehensive Plan for Addressing High

Drug Prices (Sept. 2021), https://aspe.hhs.

gov/sites/default/files/2021-09/Drug_Pricing_

Plan_9-9-2021.pdf ................................................... 35

U.S. Food & Drug Admin., Approved Drug

Products with Therapeutic Equivalence

Evaluations (Orange Book) (2022), https://

www.fda.gov/drugs/drug-approvals-anddatabases/approved-drug-products-thera

peutic-equivalence-evaluations-orange-book .......... 8

U.S. Food & Drug Admin., Orange Book

Preface § 1.2 (42d ed. 2021), https://www.fda.

gov/drugs/development-approval-processdrugs/orange-book-preface ..................................... 14

Bryan S. Walsh et al., Frequency of First

Generic Drug Approvals With ‘Skinny Labels’

in the United States, 181 JAMA Intern Med.

995 (2021), https://jamanetworks.com/

journals//article-abstract/2777965 ......................... 10

Webster’s New International Dictionary (2d ed.

1945) ........................................................................ 24

Teva Pharmaceuticals USA, Inc., respectfully petitions for a writ of certiorari to review the judgment of

the United States Court of Appeals for the Federal

Circuit.

INTRODUCTION

A divided panel of the Federal Circuit has blown a

hole in the carefully calibrated regime governing the

modern prescription-drug marketplace. The result is

to allow a narrow patent on one way of using a drug

to completely block any generic competition, potentially for years—precisely the opposite of what Congress prescribed.

In the Hatch-Waxman Act, Congress created an innovative pathway to bring low-cost generic drugs to

market. When a brand-name drug has both patented

and unpatented uses, its manufacturer must tell FDA

the specific sections of its labeling that describe the

patented uses. That allows generic manufacturers to

carve out those sections and adopt a “skinny label”—

one labeled for only unpatented uses.

Using a skinny label lets generic manufacturers

launch skinny-labeled products without fear of crippling liability. Under the Patent Act, active and intentional encouragement of an infringing method can

lead to liability for “inducing” infringement. But

skinny labels intentionally omit infringing methods.

The upshot: the Hatch-Waxman Act ensures that a

patent on one of a drug’s uses will not block generics

from entering the market for other uses.

This pathway worked as intended for almost 40

years—until the Federal Circuit rewrote the inducement standard in this case. Teva launched a generic

version of an off-patent medication that had one

patented use and two unpatented uses. It used a

skinny label that carved out all the language that respondent GSK, the brand-name manufacturer, had

identified under penalty of perjury as covering its single patented use. Seven years later, right before the

last remaining patent on that use expired, GSK sued

Teva, and a jury awarded GSK $235 million. The district court appropriately set aside that verdict.

A divided panel of the Federal Circuit then resurrected the verdict in an unusual set of proceedings

that produced two oral arguments, two petitions for

rehearing en banc, one sua sponte grant of panel rehearing, two panel opinions (with different rationales

and each accompanied by a vigorous dissent), and a

denial of rehearing en banc that inspired three separate dissents. The panel majority held that even

though Teva’s skinny label carved out GSK’s sole patented use, Teva could nonetheless be held liable for

inducement based on stray sections of the label

providing information about unpatented uses.

The majority’s decision eviscerates the element of

inducement liability that has for 70 years distinguished between inducement and non-inducement—

the requirement that a defendant actively encourage

an infringing use, 35 U.S.C. § 271(b), rather than

merely “mention” or “describe” claim elements. And

it “nullifies Congress’s statutory provision for skinny

labels—creating liability for inducement where there

should be none[,] [c]ontrary to Congress’s intent.”

Pet.App.112a (Prost, C.J., dissenting). Where there

was once “equilibrium to the skinny-label system,”

there is now complete unpredictability. Id. at 87a.

That unpredictability discourages generics from coming to market—“throw[ing] a wrench into Congress’s

design” for speeding up generic launch of low-cost

drug products. Id. at 49a.

The consequences of the majority’s decision are

enormous. Generic versions of no-longer-patented

drugs with patented uses launch with a skinny label

almost half the time, saving patients and the federal

government billions. Now all those launches are at

risk. Generic manufacturers that make pennies per

pill could collectively face billions of dollars in liability

for doing “everything right—proceeding exactly as

Congress contemplated.” Id. at 118a. The U.S.

healthcare system cannot sustain that type of competition-killing uncertainty. Given the importance of

this issue to patients, payors (including the federal

government), and prescription-drug competition, this

Court should grant review.

OPINIONS BELOW

The Federal Circuit’s opinion (Pet.App.1a-87a) is

reported at 7 F.4th 1320. The panel’s prior vacated

opinion (Pet.App.88a-146a) is reported at 976 F.3d

1347. The order denying rehearing en banc and the

opinions concurring in, and dissenting from, that order (Pet.App.182a-210a) are reported at 25 F.4th 949.

The district court’s opinion (Pet.App.149a-181a) is reported at 313 F. Supp. 3d 582.

JURISDICTION

The court of appeals entered judgment on August

5, 2021. A petition for rehearing en banc was denied

on February 11, 2022 (Pet.App.182a). On May 3,

2022, the Chief Justice extended the time to file a petition for a writ of certiorari until July 11, 2022. The

jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

The relevant statutory and regulatory provisions

are reproduced in the appendix, infra, at 211a-215a.

STATEMENT

A. Congress enacts § 271(b), making “actively

induc[ing] infringement of a patent” itself an

act of infringement.

One way to establish patent infringement is to establish that the defendant actively induced another to

infringe. Section 271(b) of the Patent Act, enacted in

1952, 1 provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.”

35 U.S.C. § 271(b). To prove inducement (under both

knowingly aided and abetted by “affirmative steps”

taken by the defendant “to encourage direct infringement” (iii) with the “affirmative intent that the product be used to infringe.” Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 936 (2005)

(citing Water Techs. Corp. v. Calco, Ltd., 850 F.2d 660,

668 (Fed. Cir. 1988)); Global-Tech Appliances, Inc. v.

SEB S.A., 563 U.S. 754, 760 (2011).

The law of inducement is clear that “mere

knowledge about a product’s characteristics or that it

may be put to infringing uses is not enough.” HZNP

Medicines LLC v. Actavis Labs. UT, Inc., 940 F.3d

680, 701 (Fed. Cir. 2019); accord Grokster, 545 U.S.

at 937. And in the context of unpatented products

with both patented and unpatented uses, the active1 Pub. L. 593, 66 Stat. 792, 811.

encouragement requirement is critical—it “overcomes

the law’s reluctance to find liability when a defendant

merely sells a commercial product suitable for some

lawful use.” Grokster, 545 U.S. at 936.

B. Congress enacts the skinny-label statute so

that narrow method-of-use patents do not

block the sale of generic drugs with unpatented uses.

The Drug Price Competition and Patent Term Restoration Act of 1984 2—commonly known as the HatchWaxman Act (or simply “Hatch-Waxman”)—reflects a

“grand compromise between two competing sets of interests” held by brand-name and generic manufacturers. Henry Waxman C.A. Amicus Br. 2 (Dkt. No. 170)

(quotation marks omitted). It bolstered patent protection for brand manufacturers while creating a faster

pathway for generic manufacturers to secure marketing approval for their products. Under the Act, if a

generic manufacturer files an abbreviated new drug

application (ANDA) demonstrating that its drug is

therapeutically bioequivalent to a brand-name “reference” drug, it need not duplicate the clinical trials already performed by the brand manufacturer to

demonstrate the drug’s safety and effectiveness. See

Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348,

1358 (Fed. Cir. 2003); 21 U.S.C. § 355(j)(2)(A)(iv),

(j)(4)(F); 21 C.F.R. § 314.94(a)(7)(i).

1. Hatch-Waxman gives generic manufacturers

three options for addressing brand manufacturers’

outstanding patents when filing an ANDA and planning generic launch.

2 Pub. L. No. 98-417, 98 Stat. 1585.

First, a generic manufacturer can certify that it will

wait until every patent covering the brand-name reference drug has expired. 21 U.S.C. § 355(j)(2)(A)(vii)(I)(III).

Second, it can file a “paragraph IV” certification

stating that any patents held by the brand manufacturer are invalid or will not be infringed by generic

launch. Id. § 355(j)(2)(A)(vii)(IV). Brand manufacturers then have an immediate right to sue, because

Hatch-Waxman treats the filing of an ANDA as an artificial act of infringement when the reference drug or

one of its uses is claimed by a patent. 35 U.S.C.

§ 271(e)(2)(A); Eli Lilly & Co. v. Medtronic, Inc., 496

U.S. 661, 670-671, 676 (1990). As a result, paragraph

IV certifications usually “provok[e]” pre-launch litigation by brand manufacturers, Caraco Pharm. Labs.,

Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 407 (2012),

fulfilling Hatch-Waxman’s goal of resolving patent

disputes “as early as possible.” Pet.App.54a (Prost, J.,

dissenting). This pre-launch litigation triggers an automatic stay of FDA approval and generic launch for

30 months or until a finding of invalidity or noninfringement, which means the paragraph IV process “is

likely to keep the generic drug off the market for a

lengthy period.” Caraco, 566 U.S. at 408.

The third avenue is one of Hatch-Waxman’s most

important innovations—its carve-out, or “skinny-label,” provision. 21 U.S.C. § 355(j)(2)(A)(viii). If a

brand-name reference drug is off-patent (i.e., all patents on the drug molecule itself have expired) and

only method-of-treatment patents remain, a generic

manufacturer can submit a “section viii” statement

that it will launch with a “skinny label”—one identical

to the brand label, except that it “carves out” any

patented use. By omitting the instructions that actively encourage physicians who prescribe the drug to

directly infringe patented uses, the generic manufacturer avoids inducement (and the risk of liability).

The provision thus ensures “that one patented use will

not foreclose marketing a generic drug for other unpatented ones.” Caraco, 566 U.S. at 415. And it prevents brand manufacturers from maintaining “de

facto indefinite exclusivity” by procuring myriad

method patents on unpatented drug products. AstraZeneca Pharms. LP v. Apotex Corp., 669 F.3d 1370,

1380 (Fed. Cir. 2012). Unlike the paragraph IV pathway, the section viii pathway does not lead to prelaunch litigation or a 30-month stay of generic launch.

That is the point of the carve-out statute: it allows generic manufacturers to avoid infringement (and prelaunch litigation) altogether, rather than simply

channeling litigation to an earlier time period.

Congress knew that carve-outs “would result in

some off-label infringing uses,” because when physicians prescribe drugs for patented uses, pharmacies

may (and in many states must) fill those prescriptions

with generic versions of the drug—regardless of which

drug the doctor wrote on the prescription pad. Takeda

Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785

F.3d 625, 631, 633 (Fed. Cir. 2015); Pet.App.68a

(Prost, J., dissenting). Congress nonetheless decided

to “enable the sale of drugs for non-patented uses”

even if some off-label sales would naturally occur.

Takeda, 785 F.3d at 631.

2. For Hatch-Waxman’s generic-entry pathways to

function properly, FDA and generic manufacturers

need “clarity” about which patents cover which brandname reference drugs and—particularly for method-

of-use patents—the scope of those patents. Pet.App.54a

(Prost, J., dissenting). So Congress and FDA require

brand manufacturers seeking drug approval to provide information regarding “any patent which claims

the drug … or … a method of using such drug.” 21

U.S.C. § 355(b)(1)(A)(viii)(I)-(II). Brand manufacturers submit a declaration to FDA, signed under penalty

of perjury, identifying each “method of use and related

patent claim” and “the specific section(s) and subsection(s)” of their brand-name drug labeling “that describes the method of use claimed by” patents. 21

C.F.R. § 314.53(c)(2)(i)(O), (c)(2)(ii)(P). 3 They also

provide a corresponding, shorter “use code” to describe

the method claimed. Id. § 314.53(c)(2)(ii)(P)(3); see

also Caraco, 566 U.S. at 405-406. FDA publishes use

codes in the “Orange Book” 4 to alert generic manufacturers “to the existence of a patent that claims an approved use.” 68 Fed. Reg. 36,676, 36,683 (June 18,

2003).

FDA does not independently evaluate the accuracy

of brand manufacturers’ patent declarations. It takes

them “as a given,” Caraco, 566 U.S. at 406; see also

3 Section 314.53(c)(2)(i)(O) applies to patent information submitted before approval of the brand manufacturer’s new drug application (NDA), on Form 3542a. Section 314.53(c)(2)(ii)(P) applies

to patent information submitted after NDA approval, on Form

3542. Both forms are in this record. C.A.App.6880-6903. For

ease of reference, this brief cites the current regulation, amended

in 2020; the pre-2020 regulation contained materially identical

reporting requirements in the same subsections. See 21 C.F.R.

§ 314.53(c)(2)(i)(O), (c)(2)(ii)(P) (2008).

4 FDA, Approved Drug Products with Therapeutic Equivalence

Evaluations (Orange Book) (2022), https://www.fda.gov/drugs/

drug-approvals-and-databases/approved-drug-products-therapeuticequivalence-evaluations-orange-book.

Pet.App.54a (Prost, J., dissenting), and relies on them

in making approval decisions and “[i]n determining

whether an ANDA applicant can ‘carve out’ the [patented] method of use.” 68 Fed. Reg. at 36,682. Those

declarations also provide public notice to generic manufacturers regarding the scope of any method-of-use

patents. Because the declarations must “include[] the

complete description of the method-of-use claim and

the corresponding language in the labeling of the approved drug,” FDA makes them “publicly available”

following brand-name drug approval. Id.

This regime prevents “gotcha” litigation. It allows

generic manufacturers to choose a pathway to market.

And for skinny-label launches, it provides FDA and

generic manufacturers with the information necessary to decide what language in the labeling must be

carved out to launch securely without pre-launch litigation and a 30-month stay, giving generic manufacturers the certainty they need to bring low-cost generic drugs to the market, saving patients and the federal government billions.

3. When enacting Hatch-Waxman, Congress understood the longstanding requirements of inducement under § 271(b). Indeed, the skinny-label statute

neatly maps onto the elements of inducement: it permits a generic manufacturer to avoid inducement liability by intentionally omitting—the opposite of actively encouraging—instructions for infringing uses.

For years, inducement doctrine and the skinny-label

statute have worked in tandem, just as Congress intended—ensuring that narrow method-of-use patents

do not keep generic versions of off-patent drugs entirely off the market. When a brand drug has both

patented and unpatented uses, the first generic

launch relies on a skinny label nearly half the time. 5

The entire Hatch-Waxman system has been widely

popular and predictable—each pathway to generic

launch is frequently traveled, and generic and brand

manufacturers alike have clearly understood whether

and when each path could lead to infringement liability. Until now.

C. Eight manufacturers launch a generic equivalent of GSK’s unpatented drug Coreg® with

a skinny label omitting the only use GSK said

was claimed by its remaining patents.

This case is about an off-patent drug, carvedilol

(brand-name Coreg®), and GSK’s patent covering a

narrow method of using that drug to treat congestive

heart failure (CHF). Pet.App.7a.

1. Carvedilol is FDA-approved for (1) managing

hypertension, (2) treating mild-to-severe CHF, and (3)

treating dysfunction of the heart’s left ventricle following a heart attack (“post-MI LVD”). Pet.App.5.

The patent on the carvedilol compound expired in

2007. Id.

GSK also obtained two method-of-treatment patents. Pet.App.5a, 8a; Pet App. 118a (Prost, C.J., dissenting). GSK certified to FDA—under penalty of perjury—that those patents claimed only the CHF indication. C.A.App.6894-6907.

2. Teva filed an ANDA in 2002 seeking FDA approval to market generic carvedilol upon expiration of

5 Bryan S. Walsh et al., Frequency of First Generic Drug Approv-

als With ‘Skinny Labels’ in the United States, 181 JAMA Intern.

Med. 995-997 (2021), https://jamanetwork.com/journals/jama

internalmedicine/article-abstract/2777965.

the compound patent. Teva initially sought approval

for all three approved indications and submitted a

paragraph IV certification that GSK’s CHF-methodof-treatment patents were invalid.

Pet.App.6a;

Pet.App.56a (Prost, J., dissenting). Teva was right.

GSK did not sue on those patents; instead, it abandoned one patent and sought reissue of the other, admitting its invalidity and seeking to narrow it. Id.; see

35 U.S.C. § 251.

In 2004, while GSK’s reissue proceedings were

pending, FDA granted “tentative approval” of Teva’s

ANDA—meaning approval pending resolution of any

patent issues. Pet.App.6a; Pet.App.56a, 71a-72a

(Prost, J., dissenting); C.A.App.7790-7791. Three

years later, with expiration of the compound patent

approaching, Teva decided to join 13 other generic

manufacturers who were planning to carve out the

CHF indication. Pet.App.7a; Pet.App.55a-56a (Prost,

J., dissenting).

FDA sent Teva a redlined label instructing what to

carve out based on GSK’s patent declaration.

Pet.App.57a-58a (Prost, J., dissenting) (showing redline of “INDICATIONS AND USAGE” section). Teva

launched in 2007 “with the same carve-out as” the

seven other generics that ultimately launched with a

skinny label—one that “included everything but

CHF.” Id. at 58a. GSK did not sue upon generic

launch.

By 2008, generic carvedilol was selling at $.02 and

Coreg® at $2.33 per pill. GSK’s market share was below 8%. C.A.App.6769. Thereafter, GSK’s CHF patent reissued as the “’000 patent,” a narrower patent

claiming only some uses of carvedilol to treat CHF—

i.e., administered daily, with one of three specific

other medications, for more than six months, for

the specific purpose of decreasing mortality caused

by CHF. Pet.App.6a-7a. This claimed use represented (according to GSK) just 17.1% of carvedilol

prescriptions. Pet.App.42a. GSK again submitted a

sworn declaration identifying the CHF indication as

the only one claimed, and it did not sue for infringement of that patent. Pet.App.58a (Prost, J., dissenting); C.A.App.6880-6887.

In 2011, after GSK’s original method-of-treatment

patents were removed from the Orange Book (as one

had been abandoned and the other had been reissued

as the narrow ’000 patent), FDA directed Teva to

amend its carvedilol label to add the information that

had previously been carved out. Pet.App.93a. Teva

complied, and the amendment had no impact on physicians’ prescribing practices—Teva and GSK maintained their respective market shares. Id. at 58-59a.

D. GSK sues Teva for $750 million for inducing

infringement of the carved-out use.

In 2014, seven years after generic launch and

shortly before the ’000 patent expired, GSK sued Teva

for inducing infringement. Pet.App.9a. GSK sought

nearly $750 million in lost profits—ten times Teva’s

revenue ($74.5 million, for a net loss of $13 million)

from all carvedilol sales. Pet.App.123a (Prost, C.J.,

dissenting); C.A.App.12281-12282.

1. At trial, GSK sought to prove liability through

its expert, Dr. McCullough, whom GSK’s counsel

“walk[ed] through” Teva’s skinny label to establish

direct infringement by prescribing physicians.

C.A.App.10617. During that testimony, Dr. McCullough was never asked and did not testify about

whether Teva’s skinny label had encouraged or instructed the method of treatment that it omitted.

C.A.App.10623-10631; Pet.App.65a (Prost, J., dissenting). “[M]ov[ing] on to inducement,” Dr. McCullough

testified that Teva had encouraged infringement by

stating in product guides, press releases, and similar

materials that carvedilol was the “AB-rated” generic

equivalent of Coreg® without expressly disclaiming

approval for the patented CHF indication.

C.A.App.10631-10644. The lack of CHF disclaimers

later became the focus of GSK’s inducement argument

to the jury. C.A.App.11859-11861.

That focus on disclaimers was little surprise given

what had happened at trial just a few days earlier—

Teva moved for judgment as a matter of law, arguing

that GSK had not established the causation element

of induced infringement because it provided no evidence that any physicians had actually read Teva’s generic label before prescribing carvedilol. Pet.App.125a

(Prost, C.J., dissenting). 6 GSK ultimately conceded

that Dr. McCullough had not provided any testimony

to that effect but represented that “he would absolutely” do so if recalled. Id. When GSK recalled him,

however, he said the opposite—that he had not read

Teva’s label before administering generic carvedilol,

and that generic substitution happened “automatic[ally]” at pharmacies.

Id.; C.A.App.1166211663. He even said that he would not have used

6 Although this might sound counterintuitive, it isn’t. Physicians

do not prescribe particular generic products to patients—indeed,

they do not even know which generic product will be dispensed

by the pharmacy—and therefore cannot be assumed to look at

(much less rely on) a particular generic label in making prescribing decisions. C.A.App.10675, 10678-10679, 11088-11089.

Teva’s skinny-labeled product to treat CHF if he had

read the label, because it was “missing too much information” about CHF. C.A.App.11660-11661. Following that testimony, GSK’s closing argument regarding inducement focused primarily on the lack of

CHF disclaimers in Teva’s product materials.

The jury awarded GSK $235 million in damages.

2. The district court granted Teva post-trial judgment as a matter of law. Pet.App.149a-181a. The

court concluded that there was no evidence Teva’s

skinny label caused physicians to infringe, both because it did not actively encourage the patented

method of use, and because both sides’ physician witnesses testified that they had not read Teva’s label before prescribing carvedilol. Pet.App.164a-166a.

The court also examined the other materials GSK

introduced: two press releases (predating the patent)

announcing tentative approval in 2004 and final approval in 2007, and product catalogs describing generic carvedilol as the AB-rated generic equivalent of

Coreg®. None included the elements of the claimed

method. And as the district court recognized, accurately stating that generic carvedilol was AB-rated by

FDA—meaning that when administered as labeled,

the drug is therapeutically equivalent to Coreg®7—did

not even arguably advocate infringement of the patented method. Pet.App.167a-169a.

The district court also concluded that GSK did not

present substantial evidence to support causation after

Teva had amended its label, because GSK conceded

7 See C.A.App.10542, 10583; FDA, Orange Book Preface § 1.2

(42d ed. 2021), https://www.fda.gov/drugs/development-approvalprocess-drugs/orange-book-preface.

that physicians’ practices and GSK’s market share

were unaffected by the amendment. Pet.App.177a.

E. The Federal Circuit resurrects the jury verdict.

The Federal Circuit reversed in unusual proceedings that involved two oral arguments, two petitions

for rehearing en banc, one sua sponte grant of panel

rehearing, two panel opinions (and two dissents), and

a denial of rehearing en banc that inspired three separate dissents.

1. In October 2020, a panel majority (authored by

Judge Newman and joined by Judge Moore) reversed

over then-Chief Judge Prost’s dissent. Pet.App.88a146a.

For evidence of inducement, the majority pointed

primarily to evidence that Teva had described its

product—accurately—as the AB-rated generic equivalent of Coreg®. It also pointed to pre-patent press releases and testimony that Teva knew it would “get

sales” for CHF prescriptions resulting from pharmacies’ automatic-substitution practices. Pet.App.100a104a. The majority also obliquely pointed to “the FDA

labels” as relevant evidence, though the court did not

suggest that the skinny label actually instructed the

patented method of treatment. Pet.App.105a. Nor did

the majority register any disagreement with the

dissent’s extensive discussion of how Teva’s label

carved out, rather than encouraged, the patented use,

See Pet.App.118a-120a, 126a, 129a-131a, 133a-134a

(Prost, C.J., dissenting).

As commentators noted afterwards, the majority

“[s]urprisingly” failed to discuss Hatch-Waxman’s

carve-out regime, much less apply (or distinguish) the

line of precedents holding that a skinny label does not

“actively encourage” infringement of the carved-out

method. 8 Instead, the majority almost exclusively

cited pre-launch, non-carve-out cases involving labels

containing the same instructions as the brand.

Pet.App.99a-100a, 105a.

Chief Judge Prost dissented. She said, “Teva did

everything right—proceeding precisely as Congress

contemplated” by “launch[ing] its low-cost generic carvedilol for unpatented uses using a skinny label” that

“never stated that [Teva’s product] was approved, or

could be used, to treat CHF.” Pet.App.118a, 120a.

The majority’s decision, she explained, was “directly

contrary to Congress’s intent” as discussed in this

Court’s precedents, and irreconcilable with longstanding Federal Circuit precedents governing skinny labels and inducement liability. Pet.App.129a-132a.

The dissent recognized the enormity of the panel’s

decision: it “nullifie[d] Congress’s statutory provision

for skinny labels” by “creating infringement liability

for any generic entering the market with a skinny label,” and “discourage[d] generics from entering the

market in the first instance.” Pet.App.112a, 145a; see

Pet.App.128a-131a, 145a-146a.

8 Paul Dietze et al., Fed Circ. Ruling Is Troubling for Generic

Drug Manufacturers, Law360 (Oct. 21, 2020), https://www.

law360.com/articles/1320956; accord Zachary Silbersher, Can

Amarin Benefit from the GSK v. Teva Decision Regarding

Induced Infringement for Off-Label Sales?, Markman Advisors

(Oct. 7, 2020), https://www.markmanadvisors.com/blog/2020/10/7/

can-amarin-benefit-from-the-gsk-v-teva-decision-regarding-inducedinfringement-for-off-label-sales (“majority opinion strangely fails

to address” the carve-out precedents).

2. The 2020 decision sparked “widespread” criticism—from generic and brand manufacturers, law

professors, and Congressman Waxman himself, all of

whom filed amicus briefs in support of rehearing en

banc. Pet.App.59a-60a (Prost, J., dissenting). Commentators and analysts described the decision as a

“monumental,” 9 “major decision” 10 that “stretched” inducement liability, 11 “upset the expected scope of liability for most generic launches with skinny labels,” 12

and threatened the viability of carve-outs. 13

The majority warded off rehearing en banc by sua

sponte granting panel rehearing and reargument. It

then reached the same result using a new rationale—

this time in a per curiam opinion.

The court now said its skinny-label precedents

were inapplicable because Teva’s label was not a “true

section viii carve-out.” Pet.App.32a n.7. Even though

Teva had omitted everything that GSK told FDA corresponded to its patented method of treatment, the

9 Silbersher, supra.

10 Kyu Yun Kim et al., A Major Decision Evaluating the Effect of

a Skinny Label in a Post-Launch, Non-Hatch Waxman

Litigation, Jury Trial World, Mondaq (Oct. 15, 2020), https://

www.mondaq.com/unitedstates/patent/994650/a-major-decisionevaluating-the-effect-of-a-skinny-label-in-a-post-launch-non-hatchwaxman-litigation-jury-trial-world.

Kevin E. Noonan, GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2020), Patent Docs (Oct. 8, 2020),

https://www.patentdocs.org/2020/10/glaxosmithkline-llc-v-tevapharmaceuticals-usa-inc-fed-cir-2020.html.

12 Silbersher, supra.

13 Dani Kass, Generics Worry Fed. Circ. Blew Up ‘Routine’ Labeling Practice, Law360 (Oct. 7, 2020), https://www.law360.com/

articles/1317312/generics-worry-fed-circ-blew-up-routine-labelingpractice.

majority held that Teva’s skinny label induced infringement. The majority emphasized that, during

his testimony on direct infringement by doctors, Dr.

McCullough “compared” each claim element to disparate portions of Teva’s skinny label and testified that

the label “satisfied” or “met” (or, in Dr. McCullough’s

words, “mentioned,” e.g., C.A.App.10623, 10625) each

claim limitation. Pet.App.15a-17a, 20a, 27a. But he

never testified that it encouraged that method-oftreatment. C.A.App.10623-10631.

Judge Prost again dissented, saying that the “new

opinion does little to assuage, and even exacerbates,

concerns raised by the original.” Pet.App.87a. She

observed that Teva “played by the rules, exactly as

Congress intended.” Pet.App.47a. In nonetheless

holding Teva liable, she explained, the majority’s new

opinion “effectively eliminat[es]” inducement’s affirmative-encouragement requirement.

Pet.App.48a.

“Far from being a disagreement among reasonable

minds about the individual facts,” she said, “this case

signals that our law on this issue has gone awry.” Id.

3. Commentators and analysts immediately recognized the new opinion as an “important, controversial

decision” 14 that “changed everything” and rendered

the skinny-label statute effectively “dead” 15—leaving

14 Khadijah M. Silver, Teva’s Generic Label Not Skinny Enough

To Protect from $234M Damages to GSK, MedCityNews (Aug. 6,

2021), https://medcitynews.com/2021/08/tevas-generic-label-notskinny-enough-to-protect-from-234m-damages-to-gsk.

15 Sara W. Koblitz, Ding Dong Is the Skinny Label (Effectively)

Dead?, FDA Law Blog (Sept. 7, 2021), https://www.thefdalawblog.

com/2021/09/ding-dong-is-the-skinny-label-effectively-dead.

“generics makers steeped in uncertainty,” 16 and

providing a “road map” for challenges to carve out generic drugs that have been on the market for years. 17

The court denied rehearing en banc over three dissents, with two recusals. In a concurrence, Chief

Judge Moore offered two defenses of the panel’s decision. First, although GSK’s attempt to circumvent

FDA’s skinny-label framework and precedent had

dominated merits briefing, oral argument, both of

Judge Prost’s dissenting opinions, two rounds of en

banc briefing, and almost a dozen amicus briefs, Chief

Judge Moore newly suggested that the parties had not

adequately ventilated these issues before the panel.

Pet.App.186a-189a.

Second, Chief Judge Moore suggested that the majority’s holding should cause no alarm, because GSK’s

inducement theory might trigger equitable estoppel—

a discretionary defense for which defendants bear the

burden of proof at a bench trial following an adverse

jury verdict. Pet.App.190a-193a.

Judges Prost, Dyk, and Reyna each filed dissenting opinions. Pet.App.194a-210a. Although Chief

Judge Moore had again tried to downplay the case as

“narrow and fact dependent,” Pet.App.188a, Judge

Prost “note[d] that such questions at this court typically do not produce two panel opinions, two dissents,

two rehearing processes, and over a dozen amicus

16 Dani Kass, GSK Redo Doesn’t Cure Generics’ ‘Skinny Label’ Un-

certainty, Law360 (Aug. 9, 2021), https://www.law360.com/articles/

1410679/gsk-redo-doesn-t-cure-generics-skinny-label-uncertainty.

17 Daniel Knauss et al., Fed. Circ. Teva Ruling May Shake Up

Skinny Label Strategies, Law360 (Sept. 1, 2021), https://www.

law360.com/articles/1417824/fed-circ-teva-ruling-may-shakeup-skinny-label-strategies.

briefs throughout.” Pet.App.202a n.4. She found the

concurrence’s “hodgepodge of forfeiture-like rationales” not “credible,” given that the panel had squarely

addressed the parties’ substantive arguments on the

merits. Pet.App.199a-203a. As to equitable estoppel,

she saw no “indication that Congress … intended to

stake the efficacy of [the skinny-label] system on a generic’s case-by-case equity showing,” rather than the

application of § 271(b)’s bedrock active-inducement

requirement. Pet.App.204a.

Judges Dyk and Reyna separately echoed Judge

Prost’s concerns. Pet.App.205a-210a. Judge Dyk

further noted that if the majority’s novel interpretation of inducement is correct, then “there is a direct

conflict between the FDA-required labelling and the

supposed requirements of federal patent infringement

law.” Pet.App.207a. Thus, under the specific-general

canon, “the more specific and later-enacted provisions

of the Hatch-Waxman Act” must govern over “the general infringement provisions of the Patent Act.” Id.

REASONS FOR GRANTING THE WRIT

The divided panel’s controversial opinion upends

the legal rules facing the modern prescription-drug

marketplace, wreaking doctrinal havoc in two equally

troubling ways. Such a radical transformation warrants this Court’s intervention now.

First, the decision below eviscerates the key element of inducement liability: the requirement that a

plaintiff prove “active steps taken to encourage direct

infringement.” Grokster, 545 U.S. at 915. Actively encouraging or instructing an infringing use has always

been required to support inducement, and merely

“mentioning” or “describing” an infringing use has

always been legally insufficient. Now, however, that

difference has disappeared, leaving would-be defendants who sell off-patent products labeled for unpatented uses in the dark about whether and when they

will face massive infringement verdicts.

Second, the decision below effectively nullifies a

Congressional enactment created specifically to encourage precisely what Teva did here: bring a low-cost

generic drug to market labeled for unpatented uses.

For decades, the skinny-label statute has worked as

intended by providing generic manufacturers with the

predictability they need to bring low-cost generic

drugs to market labeled for unpatented uses. If they

carved out the portions of the labeling that brandname manufacturers themselves identified as covered

by method-of-treatment patents, they could launch

without risk of infringement liability. But now, every

skinny-label launch is an at-risk launch—and patients, FDA, and the healthcare system will suffer the

consequences.

The Court should not delay review of the question

presented. This case allows the Court to address it on

a full factual record knowing the answer is case-dispositive. The flaws in the majority’s opinion are on

prominent display in this case: the district judge

(since promoted to the Federal Circuit) carefully analyzed the trial evidence and the law, and this Court

has eight separate Federal Circuit opinions to aid its

review. But if there is any question, this Court should

at least seek the government’s views (as it did in Caraco) given the critical interests—of FDA and the patent system—at stake.

I. The Federal Circuit’s distortion of inducement doctrine and nullification of HatchWaxman’s carve-out provision warrant this

Court’s review.

A. The skinny-label statute and § 271(b)’s active-inducement element speed generic

launch by providing predictability and security to generic manufacturers.

1. Hatch-Waxman represents a “grand compromise between two competing sets of interests.” Henry

Waxman C.A. Amicus Br. 2 (quotation marks omitted). Before the Act’s passage, brand manufacturers

“had seen their effective patent terms shortened by

the testing and regulatory processes.” Warner-Lambert, 316 F.3d at 1358. Generic manufacturers, meanwhile, had seen their “entry into the market upon expiration of the innovator’s patents … delayed by …

regulatory requirements.” Id.

Hatch-Waxman balanced these interests. For

brand manufacturers, the statute extended certain

patent terms and permitted pathways to initiate infringement litigation before generic entry. See Eli

Lilly, 496 U.S. at 670-671. For generic manufacturers, the statute created clear avenues for faster generic entry and required that brand manufacturers

disclose information regarding their patents. See supra, pp. 5-10.

As part of that balance, Congress sought to prevent

the risk that brand manufacturers would obtain

method-of-treatment patents covering off-patent

drugs and use those patents to “foreclose marketing a

generic drug for other unpatented uses.” Caraco, 566

U.S. at 415. That result would directly undermine one

of Hatch-Waxman’s principal goals: “to speed the

introduction of low-cost generic drugs to market,” id.

at 405, because generic manufacturers could not realistically launch for pennies a pill when outstanding

method-of-use patents created a risk of exponential

damages liability.

So Congress and FDA devised a solution: “If a

brand drug company … has a patent on one of a drug’s

uses, it tells the FDA which use is patented”—indeed,

“it tells the FDA exactly what language from its label

is covered by its patents.” Pet.App.47a (Prost, J., dissenting); see 21 C.F.R. § 314.53(c)(2)(i)(O). “The FDA

will then permit a generic version of that drug to come

to market if the manufacturer ‘carves out’ such use

from its drug label by omitting the language that the

brand drug company identified.” Pet.App.47a (Prost,

J., dissenting). That “facilitate[s] the approval of generic drugs as soon as patents allow,” and so “speed[s]

the introduction of low-cost generic drugs to market.”

Caraco, 566 U.S. at 405.

This structure allows generic manufacturers to

launch without risk that doing so could lead to multimillion-dollar liability. Generic manufacturers typically do not advertise or promote their products as

brands do—the economics of generic-drug pricing do

not allow it, nor would doing so make sense when physicians cannot prescribe a specific generic manufacturer’s drug product. See Judith A. Johnson, Cong.

Rsch. Serv., R44703, Generic Drugs and GDUFA

Reauthorization: In Brief 1-2 (2017); C.A.App.10675,

10678-10679, 11088-11089. So if generic labeling

omits the patented method-of-treatment language

that brands say is patent-protected, generics can

launch with confidence that they will not experience

crippling liability.

Indeed, the carve-out statute is deemed such a

clear way to avoid inducement that, unlike the paragraph IV process, generic manufacturers carving out

patented uses are required to certify their intention

only to FDA, not to brand manufacturers. 21 U.S.C.

§ 355(j)(2)(A)(viii). Doing so is not an artificial act of

infringement and does not permit the manufacturer

to initiate pre-launch litigation and obtain a 30-month

stay of generic launch. Those litigation mechanisms

are not needed, because a carved-out label is not an

infringing label.

2. Inducement’s “active encouragement” requirement plays a critical role in the Hatch-Waxman regime. Since the 1950s, federal patent law has provided

that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C.

§ 271(b). For many years, a consistent body of decisions—from both the Federal Circuit and this Court—

has shown that the term “actively” is more than just

window dressing: one must affirmatively encourage a

third party to infringe to face liability for inducement.

In the context of unpatented products with unpatented uses, this element is critical: it “overcomes the

law’s reluctance to find liability when a defendant

merely sells a commercial product suitable for some

lawful use.” Grokster, 545 U.S. at 936.

a. This Court’s caselaw has made clear that inadvertently mentioning or describing an infringing use

is not enough to incur liability. In Global-Tech, the

Court explained that “[t]he term ‘induce’” in § 271(b)

“means ‘to lead on; to influence; to prevail on; to move

by persuasion or influence’”—all words that clearly

connote encouragement. 563 U.S. at 760 (brackets

omitted) (quoting Webster’s New International

Dictionary 1269 (2d ed. 1945)). And, the Court emphasized, the term “induce” does not stand alone: “The

addition of the adverb ‘actively’ suggests that the inducement must involve the taking of affirmative steps

to bring about the desired result.” Id. (emphasis

added) (citing Webster’s, supra, at 27); see also Tegal

Corp. v. Tokyo Electron Co., 248 F.3d 1376, 1378 (Fed.

Cir. 2001) (distinguishing “active steps knowingly

taken,” as required to support inducement, from “accidental or inadvertent” steps).

Grokster likewise shows that mere description or

inadvertent mention are not enough. In resolving the

law of inducement (under copyright and patent law).

It explained that the common-law rule and the present-day patent rule—codified in § 271(b)—are the

same: inducement requires “[e]vidence of active steps

taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use,” in order to “show an affirmative intent that the product be used to infringe.” Id.

at 936 & n. 11 (citation and punctuation omitted).

b. Until the panel’s decision here, the Federal Circuit followed the same understanding of § 271(b), including—indeed, particularly—for drug labeling.

Most notably, in Takeda—likewise involving a

carve-out 18—the Federal Circuit emphasized that

“[m]erely ‘describing’ an infringing mode is not the

same as ‘recommending,’ ‘encouraging,’ or ‘promoting,’

an infringing use, or suggesting that an infringing use

18 Takeda involved a “paper NDA” rather than an ANDA; both

drug-approval mechanisms contain similar carve-out provisions.

Takeda, 785 F.3d at 629-630.

‘should’ be performed.” 785 F.3d at 631 (brackets and

citations omitted). Takeda had argued that WestWard’s label for an off-patent drug, colchicine, infringed Takeda’s method patent on the use of colchicine to treat gout flareups. See id. at 627-628. WestWard’s label did not actually instruct patients to take

colchicine for gout flareups, but Takeda argued that

other language in the label mentioning gout flare-ups

might lead physicians to prescribe the drug for the patented use. See id. at 630. The court rejected the argument, explaining that “vague label language”—

even in conjunction with “[s]peculation or even proof

that some, or even many, doctors would prescribe” the

drug for an infringing use—could not constitute active

inducement. Id. at 631, 633.

Subsequent decisions made the point even more

explicit. In HZNP, the patented method had three

steps: applying diclofenac; waiting for it to dry; and

applying sunscreen, insect repellant, or a second medication. 940 F.3d at 702. The defendant’s generic label directed patients to perform the first and, if they

chose to perform the third, to perform the second too.

Because the label permitted, but did not require, each

claim step, it “d[id] not encourage infringement”—

even though it expressly “describ[ed]” every claim element. Id. As the court there explained, “[t]he focus

is not on whether the instructions describe the mode

of infringement, but rather on whether the instructions teach an infringing use.” Id. at 701 (quotation

marks omitted).

In Bayer Schering Pharma AG v. Lupin, Ltd., 676

F.3d 1316 (2012), meanwhile, the “Indications and Usage” section of the generic label contained instructions

for just one unpatented use. See id. at 1322. Bayer

argued that other sections of the label described patented uses, but the court explained that “while the

label mention[ed] [those patented uses], it [did] not do

so in any way that recommend[ed] or suggest[ed] to

physicians that the drug [was] safe and effective for

administration to patients for [those] purposes.” Id.

(emphasis added).

This consistently enforced line between “encouraging” and merely “describing” has given generic manufacturers predictability and lower courts clarity—they

have understood that if a brand manufacturer’s infringement claim requires a “‘scholarly scavenger

hunt’ through the label to identify statements that

may inferentially but not inevitably tie to a physician’s thoughts or acts, the inducement theory necessarily fails.” E.g., Otsuka Pharm. Co. v. Torrent

Pharms. Ltd., Inc., 99 F. Supp. 3d 461, 493 (D.N.J.

2015) (citation omitted).

In the skinny-label context, this rule is “particularly important,” because Congress designed HatchWaxman expressly to encourage the launch of off-patent generics labeled for unpatented indications—

”even though this would result in some off-label infringing uses.” Takeda, 785 F.3d at 631. Blurring the

line between encouraging and describing lets brand

manufacturers use the threat of inducement liability

as “a sword against any competitor’s ANDA seeking

approval to market an off-patent drug for an approved

use not covered by the patent”—precisely the tactic

Congress sought to prevent. Warner-Lambert, 316

F.3d at 1359.

B. The decision below fundamentally undermines Congress’s objectives and defies

settled principles of inducement law.

The decision below jumbles the rules that police

the intersection of patent law and pharmaceutical regulation. It makes a hash of Congress’s carefully

crafted regime for bringing unpatented generic drugs

to market, even when there are outstanding patents

on certain uses of those drugs. And in the process, it

“effectively eliminat[es] the demarcation between describing an infringing use and encouraging that

use”—a demarcation that is not just essential to the

inducement framework, but also necessary for HatchWaxman to function. Pet.App.48a (Prost, J., dissenting).

In holding that the combination of snippets of language in disparate portions of Teva’s carved-out label

could support a $235 million infringement verdict, the

decision below overturns Hatch-Waxman’s carefully

crafted balance. Teva “played by the rules, exactly as

Congress intended.” Id. at 47a. Teva asked FDA to

approve its generic drug product for two uses not covered by any patents: post-MI LVD and hypertension.

As required by statute, 21 U.S.C. § 355(j)(2)(A)(v),

Teva adopted a label that was identical to Coreg®—

except that it carved out the sole patented use.

Pet.App.7a. How did it know which language to excise? FDA told Teva what to cut—based on sworn representations from GSK about the scope of its patents

and the label language claimed by those patents. See

Pet.App.56a-58a (Prost, J., dissenting); 21 C.F.R.

§ 314.53(c)(2)(i)(O); C.A.App.6880-6887.

According to the panel majority, Teva should have

ignored FDA’s instruction and GSK’s sworn

declaration and adopted a different label. But “[f]or

decades, everyone has assumed they could rely on

what brands said about what their patents covered.

The FDA’s skinny-label approval pathway and regulations are expressly predicated on that.” Pet.App.85a

(Prost, J., dissenting). Now, a generic-drug manufacturer can be accused of inducing infringement for doing precisely what Hatch-Waxman contemplates.

That decision “threatens to decimate the compromise

at the heart of the Hatch-Waxman Act,” “allow[ing]

proof of induced patent infringement every time a generic uses a skinny label.” Henry Waxman C.A. Amicus Br. 9, 11.

Moreover, given inducement doctrine’s encouragement requirement, “it’s unclear what Teva even did

wrong—or, put another way, what another generic in

its shoes should do differently.” Pet.App.84a (Prost,

J., dissenting). The decision below breaks from the

well-settled body of precedent distinguishing between

non-infringing “mentions” of patented uses and infringing “instruction” or “encouragement.”

To effectuate the carve-out, Teva omitted more

than 50 paragraphs of information at FDA’s instruction, including the “Heart Failure” portions of the “Indications and Usage,” “Dosage and Administration,”

“Adverse Reactions,” “Pharmacodynamics,” “Specific

Populations,” and “Clinical Studies” sections pertaining specifically to the use of carvedilol to treat CHF.

Even though Teva purposefully excised any express CHF instructions, the panel majority let GSK

stake its inducement claim on stray sections of the label providing information about unpatented uses, see

C.A.App.6908-6952 (redlined label)—in particular, on

GSK’s expert’s “march[] through Teva’s label” to

establish direct infringement by doctors, Pet.App.18a,

plucking out individual sentences and opining that

each “met” or “satisfied” a discrete element of GSK’s

patent claim, Pet.App.15a-17a, 20a, 27a. The record

is clear that Dr. McCullough “never testified that the

skinny label encouraged, recommended, or promoted

practicing the claimed method,” Pet.App.65a (Prost,

J., dissenting) (emphasis added)—indeed, he was

never asked this question during that testimony,

Pet.App.18a; C.A.App.10623-10631. The panel majority nonetheless held that crucial omission did not matter—that the scavenger-hunt-for-claim-language testimony was legally sufficient to support a finding of

inducement. Pet.App.15a.

For example, the majority pointed to Dr.

McCullough’s direct-infringement testimony addressing the first claim element (decreasing mortality

caused by CHF). Pet.App.16a. In that testimony, Dr.

McCullough noted sections of the carve-out label

where “there’s a mention” of the phrase “heart failure,” including one that was expressly agnostic about

whether patients even had heart failure.

C.A.App.10623; see C.A.App.5508 (directing use of

carvedilol to treat post-MI LVD patients “with or

without symptomatic heart failure”). This is the exact

type of evidence that was rejected in HZNP and Bayer

as mere description (not encouragement) and therefore legally insufficient to support liability. See

HZNP, 940 F.3d at 702; Bayer, 676 F.3d at 1322.

The majority’s holding cannot coexist with this

Court’s precedents or the consistent line of Federal

Circuit decisions carefully policing the description-encouragement boundary. The majority did not even attempt to explain how its new inducement-by-hidden-

message approach is consistent with this Court’s decisions in Global-Tech or Grokster or the Federal Circuit’s decision in Takeda—because those decisions

foreclose the approach it adopted. And while the

panel majority did purport to reconcile its holding

with that of HZNP and Bayer, its proposed distinction

was nothing more than the assertion that the labels

in those cases did not recommend the patented uses.

Pet.App.18a-20a. That question-begging statement

misses the point: the reason why there was no “encouragement” in those cases applies with equal or

greater force here. See Pet.App.77a-79a (Prost, J., dissenting). Indeed, the majority opinion curiously echoes the dissents in HZNP, Takeda, and Bayer—all dissents authored by Judge Newman, who authored the

2020 panel opinion that effectively ignored the

skinny-label statute and joined the 2021 per curiam

opinion that eviscerated it. See Takeda, 785 F.3d at

635-636 (Newman, J., dissenting); Bayer, 676 F.3d at

1329 (Newman, J., dissenting); HZNP, 940 F.3d at

709 (Newman, J., dissenting).

If inadvertent description is now sufficient to satisfy § 271(b), then the statute is broken—the skinnylabel statute cannot function if carving out a patented

use is effectively the same (for liability purposes) as

leaving in that use. As Judge Dyk’s dissent recognized, because Congress enacted the skinny-label provision decades after enacting § 271(b) and the skinnylabel statute expressly permits patented uses to be

carved out while requiring all other language to remain in the label, that more recent and more specific

provision must control. Pet.App.207a. Yet the majority did not even grapple with the tension—if not outright conflict—that its interpretation of these statutory provisions created.

In the end, the majority holds that inducement can

lurk in disjointed factual statements scattered across

a label. An oblique reference to one claim element

here, a hint of another claim element over there:

string them together, the majority says, and that can

be inducement. That is not how § 271(b) has worked—

until now.

C. The decision below has far-reaching consequences warranting this Court’s attention.

The panel majority’s dramatic redefinition of inducement would alone be worthy of this Court’s review. But in the Hatch-Waxman context, the confusion it creates and the havoc it will wreak on Congress’s design makes certiorari not just warranted,

but necessary. Where there was previously clarity

and “equilibrium to the skinny-label system,” there is

now confusion and uncertainty. Pet.App.87a (Prost,

J., dissenting). That uncertainty discourages generics

from using carve-outs, which “throw[s] a wrench into

Congress’s design for enabling quick public access to

generic versions of unpatented drugs with unpatented

uses.” Pet.App.49a. The ramifications of such an outcome are enormous—skinny-label launches are extraordinarily common, and they save patients and the

federal government billions. 19 If they are at-risk

launches, then generic manufacturers will not be able

to use them. The U.S. healthcare system cannot

19 See, e.g., Walsh, supra, at 995-997; Ed Silverman, ‘Skinny

Label’ for Generic Version of a Pricey Cancer Drug Cut Costs for

Consumers, Stat (Jan. 11, 2022), https://www.statnews.com/

pharmalot/2022/01/11/skinny-label-generic-gleevec-cancer.

sustain that outcome given the cost of prescriptiondrug pricing.

As the dissent observes, this case is “far from … a

disagreement among reasonable minds about the individual facts.” Pet.App.48a. It is a “signal[] that [the

Federal Circuit’s] law on [inducement] has gone

awry.” Id. The reason is simple: “the background

facts here will seemingly persist in most skinny-label

cases.” Pet.App.84a. Needing only to find claim elements “mentioned” in portions of their label that

speak to unpatented uses, brands will regularly find

something in the skinny label that can serve as the

basis for an inducement complaint years (and hundreds of millions of dollars) after generic launch.

The carve-out statute cannot function if every

carve-out leads to a jury trial. When inducement liability required clear evidence of affirmative encouragement, generics could launch with confidence that

their skinny labels do not induce infringement, just as

Congress intended. But now, the risk of generic

launch with a carve-out label is far too great given

that the lost-profits damages a jury can award dwarfs

the profits a generic earns (pennies per pill—or worse,

a net loss). Pet.App.123a & n.3 (Prost, C.J., dissenting).

Nor is this regime workable for FDA. Generics

cannot write their own labels to avoid infringement.

Rather, the brand identifies what parts of its own labeling its method-of-use patents claim, see 21 C.F.R.

§ 314.53(c)(2)(i)(O), and FDA relies on the brand’s description when it makes approval decisions and proposes carved-out labeling. But the decision below

makes clear that following FDA’s instructions, based

on the brand’s explicit identifications, is no safe

harbor. And brands will now have every incentive to

write their labels to facilitate claims of inducement after a carve-out.

Indeed, the impact of the decision below will reach

beyond the immediate skinny-label context. If disparate sections of drug labeling addressing unpatented

uses are now fair game for an inducement claim, then

the opportunities for brands to abuse the patent system and manipulate the pharmaceutical market are

nearly infinite. Brand manufacturers often obtain patents on uses for which they do not seek FDA approval, and attempt to use those patents to discourage

the launch of generic drugs labeled for unpatented

uses. See, e.g., Bayer, 676 F.3d at 1320 (infringement

claims involving unapproved indication). Inducement’s active-encouragement element has previously

held those claims at bay. See id. at 1319-1324. But

the decision below breathes new life into these liability theories, and the uncertainty created will only embolden brand manufacturers to bring these types of

claims in the future—years after a generic drug has

been on the market.

Because of the massive damages exposure, section

viii will now be riskier than pre-launch paragraph IV

litigation. Brand manufacturers can lie in wait for

years after generic launch, then sue to recover six

years of their lost market share. That daunting prospect will be too risky for generic manufacturers. The

majority’s “opaque” decision will leave generics “in the

dark about what might expose them to liability,” discouraging them from entering the market.

Pet.App.48a-49a (Prost, J., dissenting).

In all events, a brand manufacturer will have

every incentive to “maintain its exclusivity merely by

regularly filing a new patent application claiming a

narrow method of use not covered by its NDA”— the

outcome Congress sought to avoid through enactment

of the skinny-label statute. Warner-Lambert, 316

F.3d at 1359. This well-recognized patent abuse—

called “evergreening”—will be turbocharged by the decision below. See Cong. Rsch. Serv., R46221, Drug

Pricing and Pharmaceutical Patenting Practices 9, 16

(2020), https://sgp.fas.org/crs/misc/R46221.pdf.

As the Department of Health and Human Services

(HHS) has emphasized when expressing concern

about this very litigation, carve-outs are “critical

practices,” and judicial interpretations that “may

discourage the use of carve-outs and thus delay the

approval of some generic drugs” can cause enormous

harm to the healthcare market as a whole. U.S. Dep’t

of Health & Human Servs., Comprehensive Plan for

Addressing High Drug Prices 21 (Sept. 2021), https://

aspe.hhs.gov/sites/default/files/2021-09/Drug_Pricing_

Plan_9-9-2021.pdf (HHS Plan). FDA, too, has recently emphasized the harm that patent abuses and

generic-launch delays create for the healthcare system—harms that will inevitably follow from the decision below. 20 When a brand drug has both patented

and unpatented uses, the first generic launch relies on

a skinny label nearly half the time. 21 Without carveouts, generic approval will take years longer. The re-

20 Letter from Janet Woodcock, Acting Commissioner of Food and

Drugs, to Andrew Hirshfeld, U.S. Patent and Trademark Office

2-5 (Sept. 10, 2021), https://pink.pharmaintelligence.informa.com/

-/media/supporting-documents/pink-sheet/2021/09/fda-letter-topto.pdf.

21 Walsh, supra, at

995-997.

sult will be “billions and billions” in lost savings for

patients and the federal government. 22

II. The Court should review this case without

delay.

This Court’s immediate review is vitally important. As HHS has explained, carve-outs are a “critical” mechanism for ensuring that low-cost generic

versions of unpatented drugs are not kept off the market. HHS Plan 21. This case presents an excellent

opportunity for this Court to prevent that outcome by

addressing the appropriate interpretation of the

skinny-label statute and § 271(b)—on a post-trial record in a context where the answer is case-dispositive,

with a thoughtful district-court decision and eight

Federal Circuit opinions to aid review. Neither reason

offered by the concurrence in the denial of rehearing

en banc to justify denying further appellate review

provides any basis for delay.

A. Chief Judge Moore’s concurrence suggested

that the availability of an equitable-estoppel defense

on remand makes further review unnecessary now.

That suggestion is misguided.

First, a petition is not fatally “interlocutory” where

the very question is whether the remand was erroneous. This Court regularly reviews appellate decisions

that mistakenly remand for further proceedings, including in Caraco (another skinny-label case), and in

Eli Lilly, when this Court granted review to decide

whether 35 U.S.C. § 271(e)(1) provided a defense to infringement, even though the Federal Circuit had “remanded for the District Court to determine whether

22 Kass, GSK Redo, supra.

in fact [the] condition[s] [for applying the defense] had

been met.” 496 U.S. at 664.

Second, the suggestion that the availability of a

discretionary, equitable defense could blunt the impact of the majority’s erroneous decision misses the

“point” of Hatch-Waxman: clarity and predictability.

Pet.App.54a & n.9 (Prost, J., dissenting). Hatch-Waxman is designed around “resolv[ing] patent disputes

as early as possible.” Id. That is because at-risk

launch is rarely feasible for generics. See supra pp.

22-23. But equitable defenses are not resolved before

generic launch, or even before trial—they are resolved

after a jury trial to avoid Seventh Amendment issues.

See Peter S. Menell, Patent Case Management Judicial Guide § 8-5 (3d ed. 2015).

Moreover, equitable estoppel is a defense for which

an infringement defendant bears the burden of

proof—one dependent on equitable considerations,

and reviewable only for abuse of discretion. A.C.

Aukerman Co. v. R.I. Chaides Constr. Co., 960 F.2d

1020, 1041 (Fed. Cir. 1992) (en banc). Given the centrality of clarity and predictability to the Hatch-Waxman regime, it is unfathomable that “Congress, when

enacting this specific statutory skinny-label system

(implemented by copious detailed regulations), intended to stake the efficacy of that system on a generic’s case-by-case equity showing.” Pet.App.204a

(Prost, J., dissenting).

B. Chief Judge Moore’s concurrence also vaguely

suggested that these issues were not adequately ventilated by the parties at the panel stage.

Pet.App.186a-190a. But as the dissenting judges observed, that odd suggestion is demonstrably “not the

case.” Pet.App.200a-203a (Prost, J., dissenting); see

also Pet.App.208a (Dyk, J., dissenting). The proper

interpretation of § 271(b) and the skinny-label statute

dominated merits briefing, two en banc petitions, and

both of Judge Prost’s dissents. See, e.g., C.A.Red.Br.9,

14-15, 47-54. “Put simply: this argument was made to

the panel, the panel addressed it on its merits, and the

majority resolved it against Teva.” Pet.App.202a

(Prost, J., dissenting).

The profound implications of this case on the patent system, the pharmaceutical market, patients,

and the federal government warrant this Court’s intervention now. In light of the importance of the

carve-out system, this Court has previously sought

the government’s views on certiorari in a related case

regarding Hatch-Waxman’s skinny-label provision.

Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 563

U.S. 902 (2011) (Mem.). At a minimum, this Court

should not deny certiorari without first seeking the

government’s views given the interests of numerous

federal agencies—and the public fisc—at stake.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

DARYL L. WIESEN

CHRISTOPHER T. HOLDING

ELAINE HERRMANN BLAIS

ROBERT FREDERICKSON, III

GERARD J. CEDRONE

WILLIAM E. EVANS

GOODWIN PROCTER LLP

100 Northern Avenue

Boston, MA 02210

WILLIAM M. JAY

Counsel of Record

GOODWIN PROCTER LLP

JAIME A. SANTOS

1900 N Street, NW

Washington, DC 20036

(202) 346-4000

wjay@goodwinlaw.com

July 11, 2022

Counsel for Petitioner

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