Glaxosmithkline LLC v. Teva Pharmaceuticals USA, Inc., 7 F.4th 1320

Background

GSK’s carvedilol (Coreg) had three FDA-approved indications (hypertension, post‑MI left ventricular dysfunction (post‑MI LVD), and chronic congestive heart failure (CHF)); GSK later obtained Reissue Patent RE40,000 claiming a method of decreasing CHF mortality by administering carvedilol with ACE inhibitors/diuretics/digoxin for >6 months.
Teva filed an ANDA in 2002 (Paragraph III for the compound patent and Paragraph IV as to an earlier method patent), received tentative approval in 2004, and launched generic carvedilol in 2007 with a ‘‘skinny’’/partial label that omitted the CHF indication per a section viii carve‑out; Teva’s marketing materials and press releases described its product as AB‑rated/therapeutically equivalent to Coreg.
GSK reissued the method patent (RE40,000) in 2008 and listed it in the Orange Book (use code: "decreasing mortality caused by congestive heart failure"). In 2011 the FDA directed Teva to restore the CHF indication and Teva amended its label (full‑label period begins May 1, 2011).
GSK sued Teva (2014) for induced infringement of RE40,000. A jury found the patent valid, that Teva induced infringement in both the partial‑label and full‑label periods, awarded lost‑profit and reasonable‑royalty damages, and found willfulness.
The district court granted Teva’s renewed JMOL of no inducement (finding insufficient evidence of causation). The Federal Circuit vacated that JMOL, reinstated the jury verdict and damages, and remanded; Judge Prost dissented.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Induced infringement based on partial (skinny) label	Teva’s partial label (post‑MI LVD indication), plus marketing/press materials, instructed or encouraged physicians to prescribe in a way that met each claim limitation, so Teva had specific intent to induce.	Teva carved out the patented CHF use under section viii and thus its label did not encourage infringing use; describing the drug as a generic equivalent or cardiovascular agent is lawful and not intent to induce.	Substantial evidence supported the jury’s finding that the partial label and related marketing could be read to encourage the claimed CHF use; the JMOL was vacated on this point.
Induced infringement based on full label (post‑2011)	Teva’s amended full label expressly included the CHF indication and thus directly instructed the infringing use; marketing materials and MPRs told doctors to read the label.	Teva says nothing changed in prescribing practices after the label amendment and that physicians relied on medical guidelines/texts, not Teva’s materials.	Jury reasonably could credit that the full label plus marketing induced infringement; verdict on full‑label inducement stands.
Causation (did Teva’s conduct cause physicians to infringe?)	GSK offered circumstantial evidence (labels, press releases, catalogs, MPRs, experts) from which a jury could infer Teva’s actions caused physicians to prescribe generics in an infringing manner.	Teva argued prescribing was driven by medical guidelines, textbooks, and established practice; absent direct proof that physicians relied on Teva’s materials, causation fails as a matter of law.	Court held causation may be proved circumstantially and that substantial evidence supported the jury’s causal finding; JMOL on causation was improper.
Damages — lost profits and non‑infringing alternatives	GSK quantified lost profits (17.1% of Teva’s sales attributable to the patented method); other generic suppliers would have made those infringing sales in the but‑for world.	Teva argued pharmacy substitution and other generics mean lost sales would not have gone to GSK specifically; jury should have been instructed otherwise.	Court affirmed damages award: other generic suppliers were treated as infringing alternatives (not non‑infringing substitutes) and district court’s damages instructions were proper.

Key Cases Cited

DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (inducement requires specific intent to encourage infringement and that actions induce actual infringing acts)
Takeda Pharm. USA, Inc. v. West‑Ward Pharm. Corp., 785 F.3d 625 (Fed. Cir. 2015) (when inducement relies on a drug label, the label must encourage, recommend, or promote infringement)
Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399 (U.S. 2012) (section viii skinny‑label framework and reliance on brand’s patent description for FDA carve‑outs)
HZNP Medicines LLC v. Actavis Labs. UT, Inc., 940 F.3d 680 (Fed. Cir. 2019) (distinguishing mere description from encouragement in label‑based inducement claims)
Grunenthal GmbH v. Alkem Labs. Ltd., 919 F.3d 1333 (Fed. Cir. 2019) (upholding no‑inducement where label did not implicitly or explicitly encourage infringing use)
Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) (standard of review for JMOL — substantial evidence; appellate de novo review)
Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843 F.3d 1315 (Fed. Cir. 2016) (clarifying JMOL standard and affirming that circumstantial evidence can support inducement causation)
Metro‑Goldwyn‑Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (U.S. 2005) (evidence of active steps to encourage infringement shows affirmative intent)
Grain Processing Corp. v. Am. Maize‑Prod. Co., 185 F.3d 1341 (Fed. Cir. 1999) (lost profits require but‑for causation and reconstructing the but‑for market)