On September 24, 2015, the Federal Circuit issued an opinion addressing infringement liability for active pharmaceutical ingredient (“API”) suppliers in Hatch-Waxman cases. In particular, the Court held that API supplier Johnson Matthey’s activities are protected by the safe harbor provision of 35 U.S.C. § 271(e)(1), and that it did not induce infringement under 35 U.S.C. § 271(b) by providing API to abbreviated new drug application (“ANDA”) applicants for use obtaining FDA approval.

Background

Shire’s drug Vyvanse® (lisdexamfetamine dimesylate) is a central nervous system stimulant approved to treat attention deficit hyperactivity disorder and moderate to severe binge eating disorder. Several generic drug companies filed ANDAs seeking approval to market generic versions of Vyvanse® prior to expiration of its Orange Book-listed patents.

In addition to suing the ANDA applicants, Shire also sued their API supplier, Johnson Matthey Pharmaceutical Materials (“Johnson Matthey”). The district court granted summary judgment that, inter alia, the ANDA applicants infringed the asserted compound claims and Johnson Matthey induced infringement of the compound claims. The district court interpreted the Federal Circuit’s prior decision in Forest Labs., Inc. v. Ivax Pharms., Inc., 501 F.3d 1263 (Fed. Cir. 2007) as standing for the proposition that the filing of an ANDA can create inducement liability for the ANDA applicant’s manufacturer/supplier.

Federal Circuit Opinion

The Federal Circuit panel affirmed the district court’s holdings that the asserted claims were non-obvious and that Johnson Matthey did not directly infringe under 35 U.S.C. § 271(e)(2) because it did not submit an ANDA. However, it reversed the district court’s decision on the issue of inducement, stating that the § 271(e)(2) safe harbor provision protected Johnson Matthey’s activities thus far, which consisted of providing material for use by the ANDA applicants in obtaining FDA approval. The Court distinguished its Forest decision, stating that Forest involved the scope of an injunction under § 271(e)(4), whereas no injunction had been issued against Johnson Matthey in this case.