In a unanimous opinion by Justice Ketanji Brown Jackson, the U.S. Supreme Court held that Amarin, the developer of Vascepa® (reference listed drug), failed to plausibly allege that Hikma actively induced infringement of Amarin’s method of use patents based on Hikma’s statements and materials related to its generic version of Vascepa®, reversing the decision by the U.S. Court of Appeals for the Federal Circuit (Federal Circuit). Although much of the import of this decision will not be fully understood until lower courts interpret this ruling, the Supreme Court provided guidance regarding one of the requirements for alleging a claim for induced patent infringement—one must plausibly allege that the defendant actively encouraged infringing use, not merely whether others could plausibly read statements by the defendant as instructions to infringe.

The Generic Drug Pathway and the Hatch-Waxman Act

When a pharmaceutical company develops a new drug, it must obtain U.S. Food and Drug Administration (FDA) approval by demonstrating the drug is safe and effective for specific uses, called “indications.” These indications are described in the drug’s FDA-approved label. The company may also hold patents covering those specific methods of use.

Section 505(j) of the Hatch-Waxman Act (codified as 21 U.S.C. § 355(j)) allows generic manufacturers to seek FDA approval of an already approved drug (reference listed drug), without repeating the expensive clinical trials that were conducted by the brand manufacturer for approval of the reference listed drug. Instead, a generic applicant simply demonstrates that its product is biologically equivalent to the reference listed drug. Once approved, all 50 states permit or require pharmacists to substitute the cheaper generic when filling a prescription for the reference listed drug.

This creates a potential conflict: if a brand manufacturer holds a patent on a specific use of the reference listed drug, can a generic manufacturer market the same drug without infringing that patent? Enter the “skinny label.”

What Is a “Skinny Label”?

A section viii carve out (named after the subsection in Section 505(j) of the Hatch-Waxman Act, i.e., 21 U.S.C. § 355(j)(2)(A)(viii), and colloquially known as a “skinny label”) is an FDA-approved label for a generic drug that omits any patented uses, while retaining approval for the non-patented uses. In other words, the generic manufacturer “carves out” the patented indication from its label, marketing the drug only for the off-patent use(s).

For example, if a reference listed drug is approved for both Condition A (patent expired) and Condition B (still under patent), a generic manufacturer can obtain approval for Condition A only, with a label that “carves out” Condition B. This is legal and is a built-in feature of the Hatch-Waxman framework designed to allow generic competition to flourish as patents expire, without forcing generics to wait for every last patent on a drug to expire.

The challenge for brand manufacturers is that physicians and pharmacists routinely substitute generics for reference listed drugs regardless of which specific indication is approved on the generic’s label. Because generics are, by definition, the same active ingredient, a pharmacist may dispense a skinny-label generic even when the patient’s prescription is written for a patented use. This means that even a skinny label may result in the generic being used for patented indications—without any intentional wrongdoing by the generic manufacturer.

Brand companies, in response, have pursued “induced infringement” claims, arguing that a generic manufacturer’s communications—labels, press releases, websites, and marketing materials—can effectively “encourage” physicians to prescribe the drug for a patented use, even without explicitly mentioning that use. In Hikma v. Amarin, the Supreme Court clarified the requirements for a brand manufacturer to state a claim for induced infringement in violation of the Hatch-Waxman Act.

Background of the Hikma v. Amarin Decision

Amarin, a brand manufacturer, markets Vascepa® (icosapent ethyl), which is now indicated for (1) severe hypertriglyceridemia (SH Indication) and (2) reducing cardiovascular risk (CV Indication). Hikma, a generic manufacturer, sought FDA approval for a generic version of Vascepa® using a “skinny label,” carving out the CV Indication, which is covered by a method-of-use patent. Amarin sued Hikma for induced infringement, alleging that the combination of Hikma’s drug label changes and its external communications induced physicians to prescribe Hikma’s generic for the patented CV Indication. Hikma moved to dismiss the complaint, and the U.S. District Court for the District of Delaware granted the motion, concluding that Amarin had failed to adequately plead an induced infringement claim.

The Federal Circuit, however, disagreed and reversed the district court’s dismissal. The Federal Circuit concluded that, in aggregate, Amarin plausibly pled an induced infringement claim because Hikma’s actions, in addition to the label changes, could support such a claim.

U.S. Supreme Court Decision

The U.S. Supreme Court (the Court) reversed the Federal Circuit and held that Amarin failed to state a claim for induced infringement.

The Court approached this case as the application of well-established pleading standards to induced infringement cases. The Court understood that the Federal Circuit had asked whether doctors could plausibly read Hikma’s statements as instructions to infringe, but the Court rejected this framing as too permissive. The correct question, according to the Court, is whether the defendant affirmatively encouraged infringement through its statements, not merely whether others could interpret those statements as suggesting an infringing use. Drawing on copyright inducement cases, the Court described the classic instance of inducement as an advertisement or solicitation designed to stimulate others to commit violations as opposed to the broader category of statements that merely could stimulate others, which cannot be inducing.

The Court then applied this proper understanding of “active step” to the Twombly/Iqbal plausibility standard to determine that Amarin’s allegations did not rise above mere possibility and that each of Hikma’s challenged statements had an obvious alternative explanation:

• Hikma’s label language. Hikma’s omission of statements in the drug label barring use for the CV Indication and retention of clinical study information allegedly related to the CV Indication were simply complying with law or standard industry practice.
• “Generic Vascepa®” statements. Hikma’s use of the term “generic Vascepa®” to describe Hikma’s generic product followed standard industry practice.
• “Hypertriglyceridemia” and “AB” statements. Using “hypertriglyceridemia” to describe a drug used for severe hypertriglyceridemia is akin to referring to a leukemia drug as a cancer drug, and the “AB” statements mean the generic drug is equivalent to the reference drug only for the conditions specified in the label, which excludes the CV Indication. None of these statements could plausibly be viewed as “designed” to stimulate others to commit infringement.
• Sales figures covering both the CV Indication and the SH Indication. The myriad of steps between a medical provider to seek out, read, understand, and draw, from that understanding that Hikma’s generic version of Vascepa® could be used for both indications was too attenuated to be plausible.

Key Takeaways for Industry

There still remain no bright-line rules for either companies marketing brand drugs to plead induced infringement or companies marketing generic drugs to protect themselves from allegations of induced infringement. However, the Court has made clear that Hikma’s actions, as outlined above, did not meet that threshold required to state a claim for actively inducing infringement of Amarin’s method of use patent, and thus could not survive a motion to dismiss by Hikma. As the district courts and Federal Circuit provide further decisions interpreting this Supreme Court ruling, the industry will better understand how the “skinny label” landscape will change in the future.

For additional information or questions regarding patent strategies, please contact any member of Wilson Sonsini’s Patents and Innovations and Patent Litigation practice groups.