Source: https://www.orangebookblog.com/2011/06/index.html
Timestamp: 2019-04-20 06:34:20+00:00

Document:
U.S. Supreme Court Confronts Inducement of Infringement Under Section 271(b) for the First Time--What Does it Mean for ANDA Litigation?
Method-of-use patents are frequently asserted in ANDA litigation. When they are, the patent owner alleges that if the ANDA is approved, the ANDA applicant would induce infringement under 35 U.S.C. § 271(b). Section 271(b) states: "Whoever actively induces infringement of a patent shall be liable as an infringer."
Proving inducement of infringement in an ANDA case is often difficult for innovator pharmaceutical companies. Under the Federal Circuit's 2006 en banc holding in DSU Medical v. JMS, proof of inducement "requires evidence of culpable conduct, directed to encouraging another's infringement." Such evidence may be found in the ANDA applicant's proposed labeling, which might instruct physicians that the drug is indicated for a particular (patented) use. But when an ANDA includes a "skinny" label and a section viii statement, the proposed labeling might not be useful evidence. When the Supreme Court agreed to hear Global-Tech Appliances v. SEB, in which the Court would construe § 271(b) for the first time, some innovator companies were hopeful that the Court would effectively overrule DSU Medical and make it easier to prove inducement of infringement.
The issue in Global-Tech, as stated by the Court, was "whether a party who 'actively induces infringement of a patent' under 35 U.S.C. § 271(b) must know that the induced acts constitute infringement." In the case, SEB held a patent on a deep fryer. Global-Tech sold infringing deep fryers to Sunbeam, Fingerhut and Montgomery Ward, each of which resold them in the United States under their own trademarks. SEB alleged that Global-Tech violated § 271(b) by actively inducing Sunbeam, Fingerhut and Montgomery Ward to sell or offer to sell Global-Tech's deep fryers in violation of SEB's patent. Global-Tech argued that inducement of infringement under § 271(b) requires knowledge of the patent, and since Global-Tech did not actually know of SEB's patent, it was not liable for inducement under § 271(b).
Global-Tech's arguments failed in the district court, and last year the Federal Circuit affirmed. The Federal Circuit held that actual knowledge of the patent is not required to support a finding of induced infringement--it was enough that Global-Tech "deliberately disregarded a known risk" that it would induce infringement. Last week, in an 8-1 decision, the Supreme Court affirmed the Federal Circuit. The Supreme Court tweaked the test, though, holding that "induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement," and that such knowledge may be proven through the doctrine of "willful blindness."
Innovator pharmaceutical companies might argue that, by requiring only "knowledge that the induced acts constitute patent infringement," the Supreme Court has established the test for proving inducement of infringement under § 271(b) and effectively overruled the Federal Circuit's test enunciated in DSU Medical. And to an innovator company, it is relatively easy to prove that an ANDA applicant knows that doctors will prescribe its ANDA product for all of the uses for which the brand drug is approved, even if the ANDA product label omits one or more of those uses--considerably easier than producing "evidence of culpable conduct, directed to encouraging another's infringement" under DSU.
In response, generic pharmaceutical companies might argue that the Supreme Court addressed an entirely different question in Global-Tech than the Federal Circuit addressed in DSU Medical, and thus DSU Medical is still controlling law. In support, they might cite the following portion of the Court's opinion: "[Global-Tech argues] that § 271(b) demands more than willful blindness with respect to the induced acts that constitute infringement. This question, however, is not at issue here." Indeed, the Federal Circuit's en banc holding in DSU Medical was based on the Supreme Court's holding in MGM v. Grokster, and the Court gave no indication in Global-Tech that it was reconsidering Grokster.
Furthermore, the patent-in-suit in Global-Tech was directed toward an apparatus, not a method of use. Therefore, every sale of the apparatus was an infringing sale; there were no non-infringing uses, as there might be in an ANDA case involving a section viii statement. And the actual question addressed in Global-Tech--whether knowledge of the patent is required--is rarely an issue in ANDA litigation, because the patents are listed in the Orange Book.
In the end, Global-Tech might have very little impact on ANDA litigation. Time, and the lower courts, will tell.

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