Shire v. Amneal: No inducement liability for third party supplier in ANDA litigation

On September 24, 2015, the Federal Circuit issued an opinion in Shire LLC v. Amneal Pharm., LLC.  The opinion may be of interest to readers of this blog for its holding that a company supplying the active pharmaceutical ingredient to abbreviated new drug application (“ANDA”) filers (so that they can file for FDA approval of generic versions of existing drugs)  was protected by a statutory safe harbor provision, and could not be held liable for inducing infringement of patents covering the API.

As some readers may know, in the small molecule drug world, 35 U.S.C. § 271(e)(2) makes it “an act of infringement to submit an [ANDA] application . . . for a drug claimed in a patent or the use of which is claimed in a patent.”  This provision enables patent holders and brand drug manufacturers to sue generic drug applicants for infringement upon their filing of an ANDA.  Another provision, 35 U.S.C. § 271(e)(1), provides a safe harbor for certain activities that support the filing of an ANDA.  That safe harbor provision states that ““[i]t shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

In Shire v. Amneal, Shire sued several drug companies that had filed ANDAs seeking FDA approval for generic versions of Shire’s drug Vyvanse, alleging infringement of several patents covering the active ingredient in Vyvanse, L-lysine-d-amphetamine (“LDX”) dimesylate, and the use of the compound to treat ADHD (one of the indications for which Vyvanse is approved).  Shire also sued Johnson Matthey, a company which did not file an ANDA, but which supplied the active ingredient LDX dimesylate to the ANDA applicants.

Shire alleged that Johnson Matthey induced the ANDA applicants’ infringement by supplying the active ingredient used to support the applicants’ ANDA filings.   Shire claimed that under the Court’s 2007 decision in Forest Labs., Inc. v. Ivax Pharm., Inc.,  Johnson Matthey should be held liable “under section 271(e)(2) for its future infringement under section 271(b) as the ANDA-filers’ API supplier.” That is, Shire argued that even though Johnson Matthey did not itself submit an ANDA, it should still be held liable under 271(e)(2) because it induced (under 35 U.S.C. § 271(b)) the ANDA applicants’ infringement  by supplying the API used to support the ANDA applications “in anticipation of the eventual commercial exploitation of both its API and the generic products made from it.”

Johnson Matthey argued that providing the API to the ANDA applicants was protected by the safe harbor provision, as this activity was “reasonably related to the…submission of information under a federal law.”  Johnson Matthey further argued that “because no direct infringement has yet occur[ed], it could not be liable for induced infringement under § 271(b).”

The Court agreed with Johnson Matthey, and held that Johnson Matthey could not be held liable for its actions up to this point, as it had “thus far done nothing more than provide material for use by the ANDA defendants in obtaining FDA approval.”  The Court reasoned: “these sales [of the API], and the ANDA defendants’ use of the API for filing the ANDA, were ‘reasonably related to the submission of an ANDA,’” and “[a]s such, Johnson Matthey’s activities are protected by the safe harbor of § 271(e)(1).”  The Court further rejected Shire’s argument that Johnson Matthey could be held liable for inducing future infringement by supplying the API in anticipation of its commercial use after FDA approval of the ANDAs: “in the circumstances of this case Johnson Matthey cannot be liable for induced infringement prior to the grant of FDA approval of the application filed by the ANDA defendants.”

A natural question for the big molecule world is how this opinion may affect activities related to biosimilar drug development and abbreviated applications under the BPCIA.  In a provision similar to that which applies in the small molecule drug context, 35 U.S.C. § 271(e)(2) also makes it an act of infringement to submit an application seeking approval of a biological product.   This “artificial” or constructive act of infringement is with respect to patents that the reference product sponsor identifies during the BPCIA patent dance, or, if no dance is triggered, with respect to any patents that the reference product sponsor could have identified during the patent dance exchange.  Whether the corresponding safe harbor provision of § 271(e)(1) will also apply to protect activities related to the filing of a biosimilar application remains to be seen, but anyone challenging its applicability to the biosimilar context will now likely have to contend with Shire to explain why it should not hold in the biosimilar world.