A generic drug manufacturer may be liable for induced patent infringement through labeling that complies with the Hatch-Waxman Act, according to the Federal Circuit’s decision in GlaxoSmithKline LLC v. Teva Pharms USA, Inc. While the Hatch-Waxman Act has been understood to encourage generic manufacturers to enter the market with skinny labels, the decision limits inducement liability by holding that FDA-approved skinny labels alone do not provide immunity from induced infringement, but rather that the description on the skinny label must be written in a way that “effectively precludes” the patented use.

However, it is controversial to conclude that compliance with legal regulations for creating skinny labels helps establish intent to induce infringement by others. Under this new standard, section viii carve outs are effectively nullified; a skinny label can never be skinny enough to avoid liability. Restoring the balance between generic and branded drugs requires a reassessment of the FDA’s role in the skinny labelling process and the legislative purpose inherent in the Hatch-Waxman Act.

In Korea, ‘methods for treating human diseases’ are not patentable, and even if a ‘drug with a specific use’ is patented, the act of using such a drug is the same as treatment, so patent rights are limited. There is no indirect infringement because the generic drug is not used exclusively for that “new use” of the “patented drug for a new purpose”. In addition, Korean patent law does not recognize induced infringement, and TEVA’s press releases and marketing materials are legal under the Labeling and Advertising Act and do not impair fair commercial practices or competitive order, so there are no illegal elements under the Unfair Competition Act or civil law.

In Korea, the use, dosage, and administration of a drug are recognized as components of an “article” and can be patented, but the effect of such a patent right extends only to the act of manufacturing and selling the drug in a form (tablet, capsule, pill, etc.) that meets certain conditions  and is compounded with other compositions to realize the use, dosage, and composition. Therefore, it should be noted that the effect of such a patent right is limited to prohibiting other pharmaceutical companies from maunfacturing and selling the drug in a form and packaging that meets certain conditions set forth in the patent claims.

However, Korean generic drug manufacturers seeking to enter the U.S. should carefully review all labeling, instructions for use, and promotional materials. They should also consider the advantages and disadvantages of a jury trial. In addition, there are defenses that TEVA did not actively pursue. These include lack of direct infringement based on scope interpretation, laches, equitable estoppel and othergrounds for lack of infringement liability, the problem of proving “willfulness” to establish inducement, and equitable estoppel and laches under the Hatch-Waxman Act. Companies facing inevitable litigation should not be optimistic or simply assume the outcome of a case, but should utilize all available defenses.

Global pharmaceutical companies seeking to enter the Korean market should understand that even if they develop a new use for a drug, they cannot patent the “method of treatment” but can patent the “drug” for the developed use. Since therapeutic acts performed by doctors are not patentable, a doctor’s therapeutic acts do not infringe on a drug’s patent rights. In Korea, the use, dosage, and administration of a drug are recognized as components of an “article” and can be patented, but the effect of such a patent right extends only to the act of manufacturing and selling the drug in a form (tablet, capsule, pill, etc.) that meets certain conditions and is compounded with other compositions to realize the use, dosage, and composition. Therefore, it should be noted that the effect of such a patent right is limited to prohibiting other pharmaceutical companies from manufacturing and selling the drug in a form and packaging that meets certain conditions set forth in the patent claims.

I. Preface On August 5, 2021, the U.S. Court of Appeals for the Third Circuit overturned the U.S. District Court of Delaware’s grant of Teva’s motion for judgment as a matter of law (“JMOL”) [1] and reinstated the jury verdict, while vacating its earlier October 2020 decision. As a result, Teva Pharmaceuticals USA (“Teva”) was ordered to pay GlaxoSmithKline LLC (“GSK”) $234,110,000 in damages in accordance with the jury’s verdict [2]. After the initial jury verdict was in favor of GSK, and the Delaware District Court granted Teva ‘s motion for JMOL. However, the District Court’s decision was reversed and the jury verdict was reinstated. This controversial ruling represents an emerging threat to the practice of skinny labeling and induced infringement claims [3]. Teva manufactured generic carvedilol [4] after FDA [5] approved the ANDA [6]. In other words, Teva’s generic carvedilol was legally manufactured. However, the judicial conclusion was that the sale of generic carvedilol, along with the labeling, press and marketing materials, induced physicians to infringe on GSK’s method-of-treatment patents. Could Teva have avoided inducing infringement of GSK’s patents? Teva’s launch of generic carvedilol occurred after the expiration of U.S. 4,503,067 (‘067 patent’) [7] for the carvedilol compound itself, while GSK’s patented U.S. 5,760,069 (‘069 patent’) survived as a reissue of RE040000 (‘000 patent’) [8]. The ‘000 patent’ is directed to a “method of treating congestive heart failure (CHF)”, and its basic claim (claim 1) identifies carvedilol as the active ingredient. However, other therapeutic agents [9] are specified in addition to carvedilol and a fixed daily dose for at least six months is specified [10]. A pharmaceutical company’s manufacture and sale of a generic drug does not directly infringe a therapeutic method patent. Infringement of therapeutic method patent is committed by a physician who prescribes or administers the generic drug. However, even if a doctor directly infringes the claims of a therapeutic method patent by performing a treatment that has no effect [11], the patentee of the patent will sue the generic pharmaceutical company [12]. A generic pharmaceutical company may be liable for induced infringement if it induces a physician to infringe a therapeutic method patent with a generic drug, even if it does not directly infringe the patent [13]. Induced infringement by a generic drug can be proven through the labeling describing the use and indication of the drug. In the above case, Teva was found to have induced physicians to infringe GSK’s patents through the labeling, marketing, catalogs, press releases, and expert testimony of its generic carvedilol. However, in [continua..]