United States: No Liability For Induced Infringement Where Drug Label Does Not Instruct the Patented Method Of Use

This article previously appeared in Last Month at the Federal Circuit, May, 2012.

Judges: Newman (dissenting), Plager, Bryson (author)

[Appealed from S.D.N.Y., Judge Gardephe]

In Bayer Schering Pharma AG v. Lupin, Ltd., Nos. 11-1143, -1228 (Fed. Cir. Apr. 16, 2012), the Federal Circuit affirmed the district court's dismissal of Bayer Schering Pharma AG and Bayer HealthCare Pharmaceuticals, Inc.'s (collectively "Bayer") claims for infringement of a method-of-use patent in two ANDA cases.

Bayer produces and markets Yasmin®, an oral contraceptive containing the active ingredient drospirenone. The FDA-approved label for Yasmin® states in the Indications and Usage section that "Yasmin is indicated for the prevention of pregnancy in women who elect to use an oral contraceptive." Slip op. at 12. The Pharmacodynamics subsection of the Clinical Pharmacology section of the label recites that drospirenone "is a spironolactone analogue with antimineralocorticoid activity. . . . Preclinical studies in animals have also shown that drospirenone has antiandrogenic activity." Id. at 13.

Bayer had listed three patents in the FDA's Orange Book in connection with Yasmin®, including U.S. Patent No. 5,569,652 ("the '652 patent"). The '652 patent claims a method of use for simultaneously achieving three effects: an antiandrogenic effect, an antialdosterone effect (also known as an antimineralocorticoid effect), and a contraceptive effect in a premenopausal or menopausal female patient. Defendants filed ANDAs with the FDA to market generic versions of Yasmin®. The ANDAs track the original NDA and seek FDA approval for the use of generic versions of Yasmin® for oral contraception. Bayer filed a complaint against defendants Watson Pharmaceuticals, Inc. and Watson Laboratories, Inc. (collectively "Watson") and Sandoz, Inc. ("Sandoz") in 2008, and a complaint against Lupin, Ltd. and Lupin Pharmaceuticals, Inc. (collectively "Lupin") in 2010, alleging infringement of the '652 patent. The district court entered a judgment of noninfringement based on the pleadings in favor of Watson and Sandoz, holding that because the FDA had not approved the use of Yasmin® for the simultaneous treatment of the three conditions as claimed in the '652 patent, Bayer could not state a claim for patent infringement. Based on that ruling, Bayer and Lupin stipulated to, and the district court entered, final judgment of noninfringement in Bayer's suit against Lupin.

In a consolidated appeal, the Court addressed "whether the FDA has approved the use of Yasmin to achieve the combination of the three effects claimed in the '652 patent." Id. at 11. First, the Court rejected Bayer's argument that the label recognizes FDA approval of all three effects claimed in the '652 patent because of the recitation in the Clinical Pharmacology section that Yasmin® exhibits antimineralocorticoid activity and has potential for antiandrogenic activity. The Federal Circuit found that "[t]he reference in the Clinical Pharmacology section of the label to the antimineralocorticoid and antiandrogenic activity of drospirenone is certainly not a direct indication of an appropriate use for Yasmin, and even if it could be considered an 'implied or suggested' indication of an appropriate use, the [FDA] regulation expressly states that such implied or suggested uses do not constitute approved ones." Id. at 14.

"My colleagues hold that the '652 patent cannot be infringed, as a matter of law, unless the label specifically authorizes physicians to prescribe Yasmin® to treat acne or as a diuretic. Maj. op. at 19. This criterion of infringement is as irrelevant as it is factually incorrect." Newman Dissent at 7.

The Court was unpersuaded by four pieces of evidence, including a declaration from a physician and a declaration from a former FDA official, that Bayer relied upon to support its argument that the references to antimineralocorticoid and antiandrogenic activity in the Clinical Pharmacology section indicated that the FDA had approved the use of Yasmin® to induce these effects. The Court found that this evidence demonstrates only that the FDA was aware that Yasmin® could cause the effects discussed in the '652 patent and does not go to the critical question of whether the FDA has found Yasmin® to be safe and effective for the purpose of inducing these effects in a patient with a specific need for those effects. "Absent that finding of safety and efficacy . . . on the Yasmin label, the Yasmin label cannot instruct (and the ANDA proposed label cannot induce infringement of) the method of use claimed in the '652 patent." Id. at 16-17.

Finally, the Federal Circuit indicated that the defendants' ANDAs seek approval to market the generic form of Yasmin® solely for contraceptive use, and there is no valid patent on the use of the drug for that purpose only. Applying Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003), and Allergan, Inc. v. Alcon Laboratories, Inc., 324 F.3d 1322 (Fed. Cir. 2003), the Court concluded that it was clear that the defendants do not infringe Bayer's '652 patent under 35 U.S.C. § 271(e)(2)(A) and that their sale of the generic form of Yasmin® would not induce infringement of that patent. Accordingly, the Federal Circuit affirmed the district court's dismissal of the infringement claims.

In her dissent, Judge Newman stated that the Court erred in endorsing the dismissal of the complaint on the pleadings, thereby denying Bayer the opportunity to litigate infringement of the '652 patent before the marketing of generic counterparts of Yasmin®. According to Judge Newman, neither the district court nor the Federal Circuit conducted a standard infringement analysis into whether the sale or use of the generic equivalent of Yasmin®, in accordance with the representations in the ANDA, infringes the '652 patent. Judge Newman maintained that Bayer had sufficiently alleged that an "intended use" for Yasmin®, as approved by the FDA, is simultaneous treatment of all three effects, and that it was improper for the Court to make contrary findings in considering a motion to dismiss.

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