The US Court of Appeals for the Federal Circuit affirmed that inducement of infringement can be shown based on encouragement and inferred intent of infringing use from a drug label. Sanofi-Aventis U.S., LLC v. Watson Labs. Inc., et al., Case No. 875 F.3d 636 (Fed. Cir., Nov. 9, 2017) (Taranto, J).
The case was a Hatch-Waxman patent litigation over methods of reducing hospitalization by administering an antiarrhythmic drug, dronedarone, to patients having certain risk factors. Sanofi-Aventis sells the brand name drug Multaq® containing the active ingredient dronedarone. Watson and Sandoz sought permission from the US Food and Drug Administration (FDA) to market generic versions of Multaq®. Sanofi-Aventis sued Watson and Sandoz for patent infringement, and after a three-day bench trial, the district court ruled for Sanofi-Aventis, finding, among other things, that Watson and Sandoz had induced infringement of a patent at issue.
On appeal, the Federal Circuit affirmed the district court's finding of inducement. Articulating the law for inducement of infringement—"liability for inducing infringement attaches only if the defendant knew of the patent and that 'the induced acts constitute patent infringement'"—the Federal Circuit noted that neither of these two knowledge requirements was disputed. "If and when Watson and Sandoz receive FDA approval and market dronedarone with the label at issue, they will know of the '167 patent (they already do) and that a medical provider's administration of the drug to the claimed class of patients is an act of infringement (which Watson and Sandoz do not dispute)."
The court further elaborated that to find induced infringement, "it must be established that the defendant possessed specific intent to encourage another's infringement." According to the Federal Circuit, "[w]hen proof of intent to encourage depends on the label accompanying the marketing of a drug, the label must encourage, recommend, or promote infringement." Turning to the facts of the case, the court explained that considerable testimony indicated that the label to be used with the generic drugs "encourages—and would be known by Watson and Sandoz to encourage—administration of the drug to those patients [with the claimed risk factors], thereby causing infringement."
Watson and Sandoz argued that the lower court could not permissibly find intent to encourage infringing use because the label permitted substantial non-infringing uses. The Federal Circuit rejected this argument for several reasons:
- The statute addressing inducement of infringement does not contain a "substantial non-infringing use" restriction.
- The Supreme Court of the United States has held the opposite, finding that a person can be liable for inducing an infringing use of a product even if the product has substantial non-infringing use.
- "[T]here is no basis for a different inducement rule for drug labels."
Instead, the Federal Circuit concluded that the "content of the label in this case permits the inference of specific intent to encourage the infringing use," in particular "the label's express statement of indications of use and the internally referred-to elaboration of those indications."Practice Note:
Non-infringing uses not forbidden by proposed drug labels may be insufficient to negate intent to induce infringement.
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