Shire LLC v. Amneal Pharms., LLC

Addressing the scope of the safe harbor provision of § 271(e)(1), the U.S. Court of Appeals for the Federal Circuit reversed the district court, holding that supplying an active pharmaceutical ingredient (API) to the filer of an abbreviated new drug application (ANDA) is not an act of induced infringement when it takes place prior to the approval of an ANDA application. Shire LLC v. Amneal Pharms., LLC, Case Nos. 14-1736, -1737, -1738, -1739, -1740, -1741 (Fed. Cir., Sept. 24, 2015) (Linn, J.).

Shire markets a branded version of L-lysine-d-amphetamine dimesylate (LDX), an amphetamine useful for treatment of attention deficit hyperactivity disorder (ADHD). When several generic companies (ANDA defendants) filed ANDAs to LDX, Shire sued for patent infringement, including a claim of induced infringement against Johnson Matthey—the supplier of LDX to the ANDA defendants. Johnson Matthey filed a drug master file (DMF) with the FDA in support of the generic companies’ ANDAs, but did not itself file an ANDA. This type of supply arrangement between ANDA filers and companies that provide API and independently file the DMF is quite common in the generics pharmaceutical industry. The district court granted several summary judgment motions, including that Johnson Matthey induced infringement and that the claims were not invalid as obvious. Defendants appealed to the Federal Circuit.

The Federal Circuit reversed the district court’s finding of induced infringement on two grounds. First, the Court explained that Johnson Matthey cannot be liable under § 271(e)(2)—which provides that filing an ANDA constitutes a constructive act of infringement—because it did not actually file an ANDA. Second, because the generic companies’ ANDAs have not yet been approved, the Court observed that Johnson Matthey “has thus far done nothing more than provide material for use by the ANDA defendants in obtaining FDA approval.” Johnson Matthey’s sales to the ANDA defendants fall within the scope of the § 271(e)(1) safe harbor because they were “reasonably related to” preparation of the generic companies’ ANDA submissions.

Distinguishing the present facts from those in Forest v. Ivax (IP Update, Vol. 10, No. 9), the Court effectively drew a line between API sales before and after ANDA approval. In particular, supplying the ANDA defendants with API after ANDA approval is no longer related to submission of their ANDAs and thus would constitute induced infringement. After ANDA approval, Johnson Matthey could properly be enjoined under § 271(e)(4) from supplying API to the ANDA defendants.

The Court also affirmed the district court’s grant of summary judgment that the claims were not invalid as obvious. The Court agreed that the cited prior art reference described enormous chemical genera without providing any specific teachings to direct a skilled person to arrive at LDX out of the expansive number of possible options described in the reference. Without describing a “finite and limited class” of compounds including LDX, or any “preference” for such compounds, hindsight would be required to arrive at LDX from the broad prior art disclosure.