Sanofi v. Watson Laboratories Inc.
875 F.3d 636 (2017)
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Rule of Law:
A drug label can be sufficient evidence of specific intent to induce infringement if it encourages, recommends, or promotes a patented method of use by, for example, referencing clinical studies that describe the patented method, even if substantial non-infringing uses for the drug exist.
Facts:
- Sanofi developed the cardiovascular drug dronedarone and began clinical trials.
- Early trials, EURIDIS and ADONIS (2001-2003), focused on the drug's effect on arrhythmia recurrence, but a post-hoc analysis suggested a potential, unconfirmed benefit in reducing hospitalization.
- A separate safety trial, ANDROMEDA, was terminated early after dronedarone was found to increase mortality in patients with severe congestive heart failure, leading to skepticism in the medical community.
- Sanofi then conducted a large-scale trial called ATHENA (2005-2008), specifically designed to study if dronedarone reduced cardiovascular hospitalization in a specific patient population with certain risk factors.
- The ATHENA study yielded positive results, demonstrating a reduction in cardiovascular hospitalization for the specific patient group studied.
- Based on the ATHENA results, Sanofi obtained the '167 patent, claiming the method of reducing cardiovascular hospitalization by administering dronedarone to patients with the characteristics identified in the ATHENA trial.
- Sanofi marketed the drug as Multaq® with a label stating its indication is to 'reduce the risk of hospitalization' and directs physicians to a 'Clinical Studies' section that prominently features the results of the ATHENA study.
- Watson Laboratories and Sandoz sought FDA approval to market generic versions of Multaq® using a materially identical label.
Procedural Posture:
- Watson Laboratories Inc. and Sandoz Inc. filed Abbreviated New Drug Applications (ANDAs) with the FDA to market generic versions of Sanofi's drug, Multaq®.
- In their ANDAs, Watson and Sandoz filed Paragraph IV certifications asserting that Sanofi's '167 and '800 patents were invalid or would not be infringed by their generic products.
- Sanofi sued Watson and Sandoz in the U.S. District Court for the District of Delaware for patent infringement.
- Following a bench trial, the district court found that Watson's and Sandoz's proposed labels would induce infringement of the '167 patent and that the patent was not invalid for obviousness.
- The district court also found infringement of the '800 patent and entered a final judgment in favor of Sanofi.
- Watson and Sandoz, as appellants, appealed the district court's judgment to the U.S. Court of Appeals for the Federal Circuit, with Sanofi as the appellee.
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Issue:
Does a generic drug manufacturer's proposed label, which refers to clinical studies demonstrating a patented method of use, induce infringement under 35 U.S.C. § 271(b) when the label does not explicitly instruct practitioners to perform the patented method and substantial non-infringing uses for the drug exist?
Opinions:
Majority - Taranto, Circuit Judge
Yes. A generic drug manufacturer's proposed label induces infringement where it encourages, recommends, or promotes the patented method of use. Here, inducement was established because the label's 'Indications and Usage' section states the drug is indicated 'to reduce the risk of hospitalization' and explicitly directs physicians to the 'Clinical Studies' section of the label. That section prominently features the ATHENA study, which describes the positive results for the exact patient population and use claimed in the patent. The label's warnings derived from the failed ANDROMEDA study further steer physicians away from other uses and toward the single, patented use shown to be effective and safe. The existence of substantial non-infringing uses is not a defense to induced infringement under § 271(b), which, unlike contributory infringement under § 271(c), does not contain such a safe harbor. Citing Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd., the court affirmed that one can be liable for inducing an infringing use even if the product has other lawful uses.
Analysis:
This decision solidifies the legal principle that a drug's label can serve as powerful circumstantial evidence of intent to induce infringement in Hatch-Waxman litigation. By focusing on how a label guides a physician's understanding and prescription habits, the court makes it difficult for generic manufacturers to escape liability by omitting explicit infringing instructions while still relying on the brand's clinical data for their indication. The case reinforces that the inducement analysis is practical, examining whether the label encourages or promotes an infringing use, and clarifies that the existence of non-infringing uses is not a defense, aligning patent law with copyright principles from Grokster.
