Earlier this month, the Supreme Court issued its opinion in Hikma Pharmaceuticals USA Inc. v. Amarin Pharma, Inc., a patent case originally decided by the Federal Circuit. In this case, Hikma Pharmaceuticals challenged a Federal Circuit decision addressing so-called skinny labeling and inducement of patent infringement. The Federal Circuit had rejected “characterizations that a reversal in this case would ‘effectively eviscerate section viii carve-outs’” of the Hatch-Waxman Act and held that Amarin had “plausibly pleaded that Hikma . . . induced infringement.” In a unanimous opinion authored by Justice Jackson, the Supreme Court reversed and remanded. This is our summary of the Supreme Court’s opinion.
Justice Jackson began by outlining the relevant background:
Federal law allows pharmaceutical manufacturers to market generic versions of brand-name drugs, so long as they obtain approval from the Food and Drug Administration (FDA) and do not infringe on any patented uses. Because a generic drug is, by definition, ‘biologically equivalent to . . . the brand-name drug,’ . . . many medical providers use brand-name and generic drugs interchangeably, regardless of whether the intended use is covered by a patent. Such substitution is allowed (and sometimes required) by state laws across the Nation, but generic manufacturers may be subject to liability under federal law if they ‘actively induc[e] infringement of [the brand manufacturer’s] patent.’ 35 U. S. C. §271(b).
Respondent Amarin Pharma, Inc., the manufacturer of brand-name icosapent ethyl, brought an induced-infringement claim against petitioner Hikma Pharmaceuticals USA Inc., a manufacturer of generic icosapent ethyl. Amarin relied on a combination of Hikma’s statements across its skinny label (an abbreviated label used for generic drugs), its website, and its press releases to allege that Hikma took ‘active steps’ to induce infringement of Amarin’s patented uses. After the District Court dismissed the complaint for failure to state a claim, the Court of Appeals for the Federal Circuit reversed, finding it ‘at least plausible that a physician could read’ the relevant statements ‘as an instruction or encouragement to’ infringe. . . .
After providing this background, Justice Jackson indicated the Federal Circuit’s finding “was error.” Rather, she said, the “central question is whether Amarin plausibly alleged that Hikma actively encouraged infringing uses, not merely whether doctors could plausibly read the alleged statements as instructions to infringe.” Justice Jackson then noted that “‘mere knowledge of infringing potential or of actual infringing uses [is] not . . . enough . . . to subject a distributor to liability.'” Quoting a previous Supreme Court case, she explained that “‘inducement must involve the taking of affirmative,’ as opposed to passive, ‘steps to bring about the desired result’ of patent infringement.”
Addressing Amarin’s arguments, she first found that, “[g]iven these standards, Amarin misses the mark in arguing that it need not do more than ‘allege . . . a plausible chain of events through which statements made by [Hikma] could lead a healthcare provider . . . to prescribe or dispense Hikma’s drug’ for a patented use.” She noted that “Amarin relies primarily on two cases to press its point.” She explained the first case attempts to import a “First Amendment standard into the induced-infringement context” that “would water down the statute’s express requirement of ‘activ[e] induce[ment].'” The second, case, she said, distinguishes “statements designed to stimulate others” and those that “could stimulate others.” She explained that “statements designed to stimulate others form a narrower category than statements that could stimulate others.” Unlike here, she said, in the second case “the defendants’ statements fit into that narrower class.” In short, she said, “inducement cannot be based only on ‘vague’ language ‘combined with speculation about how [others] may act.'”
Applying this law here, Justice Jackson indicated that, in its complaint, “Amarin fails to allege ‘more than a sheer possibility’ that Hikma actively induced infringement of Amarin’s CV-indication patents.” She noted “several of the relevant statements have an ‘obvious alternative explanation.'” She explained that it “is true, as Amarin complains, that Hikma’s label omitted the CV Limitation of Use and retained information about a clinical study involving patients taking statins.” But, she said, “that is because, by statute, Hikma’s label must be identical to Amarin’s except for the carved-out use.” According to Justice Jackson, “it is ‘normal industry practice’ to ‘truthfully describe’ a generic drug as ‘equivalent’ to the brand-name comparator.” Ultimately, she said, the Court “decline[d] to put generic manufacturers between a rock and a hard place by turning adherence to the law and industry standards into building blocks for illegal conduct.”
Next, Justice Jackson concluded that “Amarin may not rely on ‘mere omissions, inactions, or nonfeasance’ to allege active inducement.” The Court, she said, “look[s] for affirmative ‘statements or actions’ precisely to avoid ‘trenching on regular commerce’ based on such a contingent chain of events.” Justice Jackson finally rejected Amarin’s remaining inducement claims because they were, she said, merely based “on ‘vague’ statements ‘combined with speculation about how [medical providers] may act’ in response to those statements.”
As a result of her analysis, the Court reversed the Federal Circuit’s judgment and remanded the case back to the Federal Circuit.