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Fed. Circ. Ruling Is Troubling For Generic Drug Manufacturers

Reported by Paul Dietze, Elizabeth Crompton and Scott Cunning on Law360

In GlaxoSmithKline LLC v. Teva Pharmaceuticals USA Inc., the Federal Circuit reviewed a district court’s grant of a judgment as a matter of law setting aside the jury verdict. GSK makes Coreg, or carvedilol tablets, which are indicated for the treatment of cardiovascular conditions in adults. Specifically, the tablets are used to treat hypertension, left ventricular dysfunction after myocardial infarction, and congestive heart failure. However, when Teva introduced its generic version of carvedilol, the company carved out from its label information regarding the tablet’s role in treating congestive heart failure. As Paul Dietze, Elizabeth Crompton, and Scott Cunning point out, this statutory practice by which a generic version omits certain indications from its label in order to avoid infringement is known as skinny labeling. Teva amended its label in 2011 to include the indication for treating congestive heart failure. In 2013, GSK sued Teva for inducing infringement. A jury awarded GSK $234 million in damages. However, the district court granted Teva’s motion for JMOL because “the verdict of induced infringement was not supported by substantial evidence.” The Federal Circuit agreed with GSK that the district court erred because there was substantial evidence to support the jury’s verdict, including Teva’s promotional materials, press releases, and labeling. These identified Teva’s carvedilol product as an AB-rated equivalent of and bioequivalent to Coreg tablets. While the majority’s decision does not discuss the statutory framework which permits skinny labeling, the dissent argues that Teva acted as Congress intended. Dietz, Crompton, and Cunning analyze the importance of this case and address how this decision can be troublesome for generic drug manufacturers.

It can be expected that brand manufacturers will leverage this decision to support lawsuits against generic manufacturers acting in accordance with the statutory provisions allowing labeling carveouts. Brand manufacturers are now more likely to seek damages from generic manufacturers for inducing infringement when a generic product is marketed with a skinny label.

Furthermore, Dietz, Crompton, and Cunning predict a petition for rehearing en banc and/or a petition for writ of certiorari in the U.S. Supreme Court. They also express that this decision created uncertainty for drug makers who had been following “both the letter and the spirit of the law.”

For more on this case, see our coverage.

Work History Tool Properly Held Ineligible for Patent Protection

Reported by Perry Cooper on BloombergLaw.com

The Federal Circuit affirmed a district court holding that a patent covering a method to verify work history of job applicants is not patent-eligible. The court emphasized that the test for patent-eligible subject matter is not whether the claims are advantageous over the previous method. The patent at issue is owned by Tenstreet LLC. Perry Cooper summarizes the court’s short nonprecedential opinion.

[T]he Federal Circuit agreed with the trial court that the patent’s claims are directed to the abstract idea of collecting, organizing, and storing data on a conventional computer network, and don’t include an inventive concept that transforms them into patent-eligible applications.

Fed. Circ. Urged To Undo Ugg’s $450K Trademark Win

Reported by Celeste Bott on Law 360

In 2016, Deckers Outdoor Corp., the owner of the popular Ugg brand, sued Australian Leather for calling their products “ugg boots.” Australian Leather argued that the term “ugg” has been used as a generic descriptor for sheepskin boots in Australia since the 1960s and therefore it cannot receive trademark protection in the United States. In its opening brief, Australian Leather argues that the U.S. District Judge Manish S. Shah erred in using a Lanham Act test that applies to distinctive and registered marks that fall into genericness. Here, according to Australian Leather, the mark was generic before any attempted trademark use and thus the Federal Circuit should look to similar cases. Celeste Bott notes that Australian Leather has also cited the doctrine of foreign equivalents.

The judge erred when he ruled that the trademark doctrine of foreign equivalents does not apply to generic words in a foreign country where the primary language is English, the company said, adding that the doctrine requires no such carve-out for English-speaking foreign countries.