‘Skinny Label’ Legislation Is a Solution in Search of a Problem

Proposed legislation to change the process adjudicating patent infringement in cases involving “skinny labels” is a solution in search of a problem, as two Federal Circuit cases in recent years have shown the legal framework for assessing patent infringement remains stable and balanced.

Despite claims that the US Court of Appeals for the Federal Circuit is undermining generics’ ability to rely on skinny labeling—which allows generic drug manufacturers to sell Food and Drug Administration-approved drugs that include only non-patented approved uses—judges have signaled they aren’t overhauling the current framework.

In both cases, the court considered evidence of induced infringement in the label itself and in the marketplace and concluded that reversal of the district court was warranted. The Federal Circuit made clear its holdings were fact-specific and weren’t intended to change the law or balance of power on skinny labeling. If a label is truly skinny and the manufacturer doesn’t otherwise induce infringement, an infringement suit can’t stand.

Case Review

The first case to prompt calls for reform, GlaxoSmithKline LLC v. Teva Pharm USA Inc., featured GSK suing Teva for induced infringement of a patent covering a method of treating congestive heart failure. Teva launched a generic with a purported skinny label, omitting the congestive heart failure indication but including two others.

Despite the carve-out, Teva’s marketing materials referenced heart failure. Following trial, the district court overturned the jury’s finding of induced infringement due to Teva’s skinny label.

On appeal, a Federal Circuit majority reversed the district court and reinstated the jury’s verdict.

The court held that substantial evidence supported a finding that the partial label instructed the method of use claimed in the patent so it wasn’t a skinny label. The court also held that substantial evidence supported a finding that Teva’s marketing materials encouraged prescribing its drug “in a manner that would cause infringement” of the patent.

The court emphasized the narrowness of its holding, stating “[t]his narrow, case-specific review of substantial evidence does not upset the careful balance struck by the Hatch-Waxman Act regarding section viii carve-outs.”

The Federal Circuit’s decision in Amarin Pharma Inc. v. Hikma Pharms. USA Inc. caused similar upset for generic manufacturers.

Amarin sued Hikma for induced infringement of patents covering methods of reducing cardiovascular risk. Hikma launched with a skinny label listing only one indication, not cardiovascular risk.

However, the label listed side effects for patients with cardiovascular disease. Like in GSK, Hikma’s marketing materials frequently referenced the patented indication.

Amarin alleged that the content of Hikma’s press releases, website, and product label was evidence of induced infringement of the patented method. The district court granted Hikma’s motion to dismiss in view of Hikma’s label.

On appeal, the Federal Circuit reversed, holding that Amarin plausibly pleaded a claim for induced infringement. The court stressed the need to consider the totality of infringement evidence, not just individual pieces. It reasoned that the totality of Hikma’s actions—including label content, press releases, and marketing materials—could plausibly lead a physician to prescribe the drug for the infringing cardiovascular use.

The court again rejected claims that it had changed the skinny label landscape, repeating that its holding was “limited to the allegations before us and guided by the standard of review appropriate for this stage of proceedings.”

Proposed Legislative Action

Calls for reform have persisted despite the law remaining unchanged after these cases. But it’s clear these demands are a solution in search of a problem, and they propose the very disruption to the status quo they claim to address.

In January, a bipartisan group of senators introduced the “Skinny Labels, Big Savings Act,” which states it won’t be an act of infringement to seek approval of a skinny label, to promote or commercially market a drug with an FDA-approved skinny label, or to describe such a product as a generic of the reference drug. The bill includes parallel language for biosimilars.

The bill also contains a carve-out from the safe harbor, stating the infringement protections “shall apply only if the labeling, promotion, or commercial marketing does not reference the condition or conditions of use claimed in the patent and specifically reflected in the prescribing information.”

Contemporaneously, Hikma is seeking certiorari, arguing that the court’s holding “effectively nullifies” skinny labeling. Hikma’s petition urges the US Supreme Court to address “the Federal Circuit’s erosion” of skinny labeling and to overturn the “‘very permissive pleading standard for induced infringement’ that the decision creates.”

Both proposals would upset the rights of innovators and patent holders. The bill would cut off redress for patent infringement stating that any information contained in FDA-approved labeling can’t be the basis of an infringement suit.

But courts and the FDA have long made clear the FDA, unlike courts, lacks the statutory authority and expertise to review generic labeling for patent infringement issues, much less to consider the totality of evidence relevant to infringement.

Further, the breadth of the bill’s attempted carve out from the safe harbor is unclear and it doesn’t require excising information that may promote use of the patented indications, for example, in the clinical studies or side effects sections of a label. Nor does it specify whether other marketplace behavior beyond “commercial marketing” could constitute contributory or induced infringement.

Likewise, Hikma’s cert petition seeks a rule that would require courts to disregard plausible evidence of induced infringement at the pleadings stage, never allowing for proper consideration of the evidence. On June 23, the Supreme Court asked the solicitor general to weigh in with the government’s view on the position.

The bill has been in committee since January, and Hikma’s cert petition is unlikely to be granted, given that the Supreme Court denied Teva’s petition raising similar arguments, despite the solicitor general urging grant of cert. But both bear close monitoring, given the destabilizing consequences for innovator companies if they can’t seek redress for patent infringement in cases where a label isn’t truly skinny or there is other evidence of infringement.

The cases are GlaxoSmithKline LLC v. Teva Pharm USA Inc., Fed. Cir., 7 F.4th 1320, 2021 U.S.P.Q.2d 832, 8/5/21 and Amarin Pharma Inc. v. Hikma Pharms. USA Inc., Fed. Cir., 104 F.4th 1370, 2024 U.S.P.Q.2d 1155, 6/25/24.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Irena Royzman is a partner in Orrick’s New York office focusing on life sciences patent litigation.

Dana Sublett is an associate in Orrick’s Washington, D.C., office focusing on life sciences and tech patent litigation.

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