On January 12, 2017, the Federal Circuit affirmed the district court’s holding that, under Akamai Technologies, Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (en banc), the acts of patients may be attributable to the physician such that a single entity (the physician) is responsible for the direct infringement, a pre-requisite to the court’s ultimate holding of induced infringement against the generic companies.¹ See Eli Lilly and Company v. Teva Parenteral Medicines, Inc. et al., No. 2015-2067, slip op. (Fed. Cir. Jan. 12, 2017). Specifically, the Lilly court found that under the facts of that case physicians who would prescribe defendants’ ANDA products direct or control patients’ performance of a step in the claimed method.

At issue in Lilly, inter alia, was whether defendants-appellants would induce infringement of the asserted method claims, requiring administration of two common vitamins, folic acid and vitamin B12, before the chemotherapy drug pemetrexed disodium (“pemetrexed,” brand name, “ALIMTA®”).  Physicians administer vitamin B12 and pemetrexed, while patients self-administer folic acid with guidance from physicians.  Id. at 4-5. 

Liability for induced infringement under 35 U.S.C. § 271(b) requires (a) finding of direct infringement, (b) finding that the direct infringer was induced to infringe and (c) that the alleged infringer possess the requisite intent to induce infringement.  See Lilly, slip. op. at 7.  When no single actor performs all steps of a method claim, direct infringement can only be found if “the acts of one are attributable to the other such that a single entity is responsible for infringement.”  See id. at 9 (quoting Akamai, 797 F.3d at 1022).  Acts are attributable to a single entity in situations where the entity “directs or controls” others’ performance or when the actors form a “joint enterprise.”  Id.  Here, the Court considered whether an entity directs or controls the performance of others which requires a two-prong inquiry: whether an actor (1) “conditions participation in an activity or receipt of a benefit upon others’ performance of one or more steps of a patented method, and (2) establishes the manner or timing of that performance.”  Id. at 9 (citing 797 F.3d at 1023) (emphasis in original; internal quotations omitted).

The Lilly court, in affirming the lower court’s decision, held that, based on the proposed product labeling presented in that case (i.e., the language contained in the Physician Prescribing Information and Patient Information), the physician sufficiently directs or controls the acts of the patients in such a manner as to condition participation in an activity or receipt of a benefit of treatment with pemetrexed in the manner that reduces toxicities.  Id. at 11-12.  Mere guidance or instruction is insufficient to show “conditioning” under Akamai.  Yet the Federal Circuit reasoned that the critical nature of folic acid pretreatment and physicians’ practices supported a finding that under the facts presented physicians cross the line from merely guiding or instructing patients to take folic acid to conditioning pemetrexed treatment on their administration of folic acid.  Id. at 12. 

With respect to what establishes the manner or timing of the performance by patients, the Court also relied on specific statements in the product labeling which instructed physicians to ask patients to take “400 [μg] to 1000 [μg] [of folic acid] once daily beginning 7 days before the first dose of [pemetrexed],” accompanied with warnings about the consequences of non-compliance.  Id. at 14.  Indeed, the Court held that “physicians prescribe or specify a dose of folic acid, specify that patients must ingest the folic acid daily during a particular span of days, and withhold pemetrexed if patients do not follow orders.”  Id.

Significantly, the Federal Circuit’s holding does not assume that patient action is attributable to a prescribing physician solely because they have a physician-patient relationship.  Id. at 15.  That is, there must be facts presented that the physician directs or controls the actions of the patient in order to find that a patient’s action is attributable to the prescribing physician.

Although the Federal Circuit concluded that the physician directly infringes the method claim, the patentee must also establish that the alleged infringer induced the direct infringer to infringe and that the alleged infringer has the requisite specific intent to induce infringement.  See id. at 15.  Again, the Court looked to the instructions provided in the proposed product labeling.  The Court explained that vague instructions that require one to “look outside the label to understand the alleged implicit encouragement” do not, without more, induce infringement.  Id. at 15 (quoting Takeda Pharm. USA, Inc. v. West-Ward Pharm. Corp., 785 F.3d 625, 634 (Fed. Cir. 2015)).  But, in affirming the district court’s holding that Appellant would induce infringement of the asserted claims of the patent-at-issue, the Court explained that fact sensitive nature of the inquiry and, in this case, the defendants’ proposed label (i.e., Physician Prescribing Information) includes repeated instructions and warnings regarding the importance of and reasons for folic acid treatment, which would inevitably lead some physicians to infringe, and establishes the requisite intent for inducement.  Id. at 15-18.

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In many Hatch-Waxman cases, induced infringement of asserted method claims is analyzed based on the proposed ANDA labeling.  The Lilly decision makes clear that, under certain circumstances, patient actions may be attributable to the prescribing physician when the plaintiff proves facts showing that the physician directs or controls the actions of the patient (as evidenced by the product label) such that the physician is responsible for the direct infringement, especially where treatment is conditioned upon the performance of certain steps.  Likewise, the specific intent requirement for a finding of induced infringement may be based on the specificity of the “instructions” in the product label.  Under Lilly, generic pharmaceutical manufacturers should  assess the instructions set forth in their proposed label and, to the extent possible, should consider any appropriate modifications that could avoid an allegation of induced infringement.