IP Law Daily Federal Circuit reinstates $235M jury verdict for GlaxoSmithKline’s carvedilol patent
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Monday, October 5, 2020

Federal Circuit reinstates $235M jury verdict for GlaxoSmithKline’s carvedilol patent

By Brian Craig, J.D.

There was ample record evidence of promotional materials, press releases, product catalogs, the FDA labels, and testimony of witnesses from both sides, to support the jury verdict of inducement.

In a patent infringement action involving patents held by GlaxoSmithKline LLC ("GSK") for carvedilol—a drug used to treat congestive heart failure—the U.S. Court of Appeals for the Federal Circuit has held that substantial evidence supports a jury’s finding of induced infringement by generic drug maker Teva Pharmaceutical USA, Inc., reinstating a jury award of over $235 million. In vacating a judgment as a matter of law by the federal district court in Wilmington, Delaware, the Federal Circuit held that substantial evidence supports the jury verdict and that a plaintiff may prove the intent element of induced infringement through circumstantial evidence, just as with direct infringement. Chief Judge Sharon Prost wrote a dissenting opinion arguing that the majority opinion goes against Congress’s intent and incorrectly concludes that the jury’s verdict was supported by substantial evidence (GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., October 2, 2020, Newman, P.).

GSK secured a patent for its launch of Coreg®, the brand name of its carvedilol tablets for the treatment of congestive heart failure (CHF), U.S. Patent No. 5,760,069 entitled "Method of Treatment for Decreasing Mortality Resulting from Congestive Heart Failure." GSK subsequently undertook further patent prosecution efforts to correct certain errors in the ’069 patent, which resulted in reissuance of the patent as U.S. Patent No. RE40,000 ("the ’000 patent"). The compound carvedilol itself was covered by GSK’s U.S. Patent No. 4,503,067 ("the ’067 patent"), which expired in 2007 and was not at issue in the current case.

Teva filed an application with the Food and Drug Administration seeking permission to market generic carvedilol tablets. Teva initially asserted that the ’069 patent was invalid and then later sought a carve-out so that it could label its generic tablets for indications that were not covered by GSK’s ’000 patent.

In 2007, with expiration of the ’067 patent, GSK’s period of exclusivity for carvedilol ended, and generic carvedilol entered the market. Numerous companies, including Teva, marketed the generic version of the drug. In 2007, Teva received FDA approval for its generic tablets and launched its drug product with the carved out/skinny label—that is, excluding the CHF indication. As a result of de-listing of certain GSK patents from the Orange Book, the FDA instructed Teva to revise its labeling; therefore, Teva amended its label to be essentially a copy of GSK’s full label, covering three indications for use, including CHF.

GSK sued generic drug maker Teva for infringement of the ’000 Patent. The jury found the patent valid and infringed, and assessed damages of more than $235 million. The jury also found that the infringement was willful. The district court then granted Teva’s motion for judgment of non-infringement as a matter of law. GSK appealed the judgment as a matter of law and Teva conditionally cross-appealed the damages verdict.

Induced infringement. The Federal Circuit concluded that there was substantial evidence presented at trial to support the jury’s findings of induced infringement throughout the term of the ’000 patent. In Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), the U.S. Supreme Court explained that copying of a patented product is evidence of inducing infringement. A plaintiff may prove the intent element of induced infringement through circumstantial evidence, just as with direct infringement. The Federal Circuit concluded that the district court applied an incorrect legal standard, for precedent makes clear that when the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met. Precedent has recognized that the content of the product label is evidence of inducement to infringe. Here, there was ample record evidence of promotional materials, press releases, product catalogs, the FDA labels, and testimony of witnesses from both sides, to support the jury verdict of inducement to infringe the designated claims for the period of the ’000 reissue patent.

The majority argued that the dissent applies an incorrect standard of review. On appeal of a jury verdict, the Federal Circuit does not find facts afresh but rather apples the substantial evidence standard. The majority argued that implications of the dissent’s position are vast, and if enforcement of patents on new discoveries varies with the extent to which the patentee has profited from past discoveries, this is a policy matter for Congress to decide, and not a factor in judicial review. Based on the entirety of the documentary and testimonial record concerning liability before and after Teva amended its label, the Federal Circuit concluded that substantial evidence supports the jury verdict.

Damages. The Federal Circuit also concluded that the district properly instructed the jury on damages. Teva argued that the jury should have been instructed that GSK must prove that, for every infringing sale made by Teva, the direct infringer would have purchased the prescribed carvedilol as GSK’s Coreg branded product, and not from another generic producer. The Federal Circuit agreed with the district court that lost profits analysis must be based on a world in which infringement of the asserted patent does not exist, and therefore it does not allow for infringing alternatives to be available in the hypothetical ‘but for’ world." Here, the verdict amount is about half of that presented by GSK’s damages expert. The district court correctly instructed the jury that the availability of carvedilol from other generic producers is not a noninfringing substitute. Therefore, the vacated the district court’s grant of judgment as a matter of law and reinstated the jury verdicts of infringement and damages.

Dissent. In a 32-page dissenting opinion, Judge Prost argued that majority’s holding is counter to Congress’s intent and incorrectly concludes that the jury’s verdict was supported by substantial evidence. Judge Prost contended that the majority’s decision undermines the balance between patent rights public access to the innovation once patents have expired. Judge Prost further argued that the majority improperly allows a drug marketed for unpatented uses to give rise to liability for inducement and by permitting an award of patent damages where causation has not been shown. GSK failed to prove that Teva actually induced doctors to infringe the patented method, according to Judge Prost.

This case is No. 18-1976.

Attorneys: Juanita Rose Brooks (Fish & Richardson P.C.) for GlaxoSmithKline LLC and SmithKline Beecham (Cork) Ltd. William M. Jay (Goodwin Procter LLP) for Teva Pharmaceuticals USA, Inc.

Companies: GlaxoSmithKline LLC; SmithKline Beecham (Cork) Ltd.; Teva Pharmaceuticals USA, Inc.

MainStory: TopStory Patent FedCirNews GCNNews

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