Label-Plus Infringement: The Tinderbox Theory of Generic Inducement

Patent

by Dennis Crouch

The Supreme Court recently issued a Call for the Views of the Solicitor General (CVSG) in the “skinny label” inducement case, Hikma v. Amarin.  I expect the CVSG brief will be filed in late fall by the Trump-appointed Solicitor General (currently D. John Sauer).  Behind the scenes lobbying will be ongoing between  the Republican populists (seeking lower drug prices) and more traditional Republicans (promoting innovator businesses).

At issue is Hikma’s generic version of Amarin’s Vascepa (icosapent ethyl). Initially approved to treat severe hypertriglyceridemia (SH), Amarin subsequently secured FDA approval and patent protection for using Vascepa to reduce cardiovascular (CV) risk, a second indication constituting the majority of sales. Hikma launched its generic with an FDA approved “skinny label” explicitly carving out the patented CV. Doctors have a strong incentive to prescribe the generic version for the patented CV use due to significantly lower costs, leading to broader patient access. Additionally, insurers and pharmacy benefit managers actively encourage or require the use of lower-priced generics whenever available, further motivating physicians to prescribe generic alternatives for patented indications.  We also know the unpatented SH use is closely related to the patented CV use.  Severe hypertriglyceridemia (very high triglyceride levels) typically coincides with increased cardiovascular risk.

Background Materials:

Amarin’s infringement lawsuit was initially dismissed by the district court, but the Federal Circuit reversed, holding that Amarin plausibly alleged induced infringement by Hikma. Despite the skinny label, the court pointed to Hikma’s statements describing its product as a “generic version” of Vascepa, press releases citing total sales dominated by the patented use, and removal of certain disclaimers in its label, concluding that collectively these actions could actively encourage infringement by healthcare providers.

This scenario exemplifies the “label-plus” theory of inducement, wherein a generic drug’s label alone, even if it suggests infringing use, cannot constitute infringement because it falls within a congressionally authorized regulatory scheme. However, when a generic label closely aligns with an infringing use and is combined with additional active steps, inducement liability may arise. In my view, the label itself is not part of the active step, but instead creates the underlying fragile conditions that make it easy to induce infringement. In Hikma’s case, Federal Circuit concluded these active steps involved explicitly highlighting parallels to the branded drug Vascepa—such as marketing it as a “generic version” and emphasizing sales data strongly associated with the patented cardiovascular use—while omitting any explicit mention of the label’s carve-out.  Note here that this was all at the motion-to-dismiss stage of the case; Amarin has not yet proven infringement but has alleged enough to allow the case to proceed into discovery.

Hikma’s certiorari petition, supported by amici including the Association for Accessible Medicines and a group of scholars, argues that this ruling dangerously expands inducement liability. Two questions:

  1. Whether a generic drugmaker induces infringement merely by calling its product a “generic version” of the branded drug and referencing sales figures, and
  2. Whether inducement liability can exist without explicit statements encouraging the patented use.

Professors Jacob Sherkow and Paul Gugliuzza’s forthcoming Stanford Law Review article offers an important critique of the Federal Circuit’s approach.  They argue that courts have improperly shifted the doctrine of inducement from requiring clear, active encouragement of infringement to treating FDA-required “skinny labels” as implicit inducements when combined with standard marketing statements.  Interestingly, the title (“label”) of Sherkow and Gugliuzza’s article—Infringement by Drug Label—is somewhat ironic. Despite the title’s implication, the authors explicitly acknowledge within the article that, even under the Federal Circuit’s decision in Hikma, a generic drug’s FDA-approved label alone is insufficient to establish inducement liability.

Sherkow and Gugliuzza express significant concern that the current jurisprudence improperly conflates regulatory compliance with inducement, recognizing that “skinny label” FDA approval is a Congressionally designed mechanism to ensure that  patenting new uses of old drugs cannot be used to keep the drug entirely off market.  Their distinction between “regulatory” and “factual” speech highlights a central complexity in pharmaceutical patent litigation involving generic drug labels. According to their article, regulatory speech refers to the language and statements mandated by FDA regulations within a drug’s labeling, particularly the package insert, which is heavily negotiated with and controlled by the FDA. In contrast, factual speech pertains to actual communications or promotional activities by the generic company, such as marketing materials, advertising, or statements directly intended to influence prescribing decisions.  Sherkow and Gugliuzza argue that the Federal Circuit has conflated these two types of speech by overly relying on the FDA-approved label (“regulatory speech”) to determine induced infringement.

Specifically addressing Hikma v. Amarin, Sherkow and Gugliuzza argue the Federal Circuit mistakenly permitted inducement liability based on routine marketing activities—such as describing generic products as equivalents to brand-name drugs or providing sales figures—without adequately establishing affirmative intent or clear promotional efforts aimed at the patented uses. They suggest that these ordinary commercial statements, inherently neutral and typical in pharmaceutical markets, lack the targeted messaging or strategic guidance required to constitute active inducement.

While Sherkow and Gugliuzza’s critique insightfully emphasizes the distinction between regulatory and factual speech, I have some push-back to their approach. Even regulatory speech—as mandated and carefully negotiated with the FDA—is still fundamentally communication from the accused infringer, delivered to market participants as part of its money-making transactions. This communication coupled with the generic sales inherently shapes the market environment, establishing conditions ripe for infringement. By facilitating access to a significantly cheaper generic alternative with limited legal uses, generic drugmakers effectively create an environment where the market is predisposed to use the generic drug off-label for patented indications.

In my view, this dynamic illustrates a critical nuance of inducement liability: once the market conditions are primed—a tinderbox scenario—only a minimal affirmative action or encouragement (a “spark”) may set the whole thing afire and establish significant inducement.  At the pleading stage, it is plausible that such minimal sparks occurred here through Hikma’s promotional materials characterizing its product as a generic version of Vascepa; emphasizing sales predominantly associated with the patented cardiovascular use; and inconsistent disclaimer.  Even though this issue isn’t squarely raised by the current petition, I also believe it would be important evidence if the accused infringer continued marketing and selling its generic product despite knowing, perhaps only statistically, that significant off-label infringing use was occurring — especially in this situation where the drug is a controlled substance with a very limited generic use profile.

In a typical patent inducement situation, minor promotional statements or commercial equivalence claims would ordinarily not be enough to constitute active inducement. Here though, we have a quite different setup given the major economic incentives and prescription patterns inherent in our pharmaceutical markets. For me, the issues fall back on the traditional elements of inducement:

  1. Knowledge of the patent and awareness that the encouraged acts infringe;
  2. Affirmative steps—beyond mere passive knowledge—that actively encourage, promote, or instruct infringement; and
  3. Actual direct infringement resulting from those affirmative actions.

In the present scenario, Hikma clearly had knowledge of Amarin’s patents covering the CV indication. Its statements and marketing strategy involved active steps that arguably encouraged the infringement; and we have actual underlying infringement. I think the weakest evidence from the complaint is that that the infringement was a direct result of the Hikma’s actions beyond just selling the product with the label, but that is not the issue before the Supreme Court.

This continues to be an important for the public as a whole – but the court is on pause now as we wait for the Solicitor General’s CVSG brief.

Hide comments

Leave a Reply

Register