Induced Infringement of Method of Treatment Claims: Does "United We Stand, Divided We Fall" Really Apply?

Authored by Barbara R. Rudolph, Ph.D. and Robert C. Stanley

Method of treatment claims have long been part of the pharmaceutical industry’s patent portfolio to protect its innovative drug products. Many such method claims, however, were drafted long ago and may arguably require more than one actor to complete all of the recited steps, a problem called "divided infringement." In 2014, the U.S. Supreme Court held in Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct. 2111, that a single entity must perform all steps of the claimed method to give rise to liability for induced infringement. This created a new issue for pharmaceutical patent litigants—could method of treatment claims be avoided simply by arguing that the steps required actions by both healthcare providers and patients? Decisions such as Endo v. Amneal, 2015 BL 279190 (S.D.N.Y. Aug. 18, 2015), where ANDA filers were not held liable for inducement of method of treatment claims requiring healthcare providers to "provide" a claimed drug product and patients to "administer" it, seemed to support that view.

Perhaps recognizing this potential issue with divided infringement, which certainly spills over to other industries as well, the Supreme Court remanded the Limelight case to the Federal Circuit to reconsider the standard for direct infringement. There the Federal Circuit held en banc that one could be liable for direct infringement even if more than one actor performs all of the claimed method steps, if "the acts of one are attributable to the other such that a single entity is responsible for the infringement." Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015). The acts could be attributable to a single entity when that entity directs or controls the other’s performance, or if the actors formed a joint enterprise. Id.

What remained was to see how this would play out in the context of ANDA litigation involving pharmaceutical method of treatment claims. Could one combine Limelight and Akamai such that an ANDA filer could be liable for inducing direct infringement by a healthcare provider who performed at least one method step and then directed or controlled the performance of the remaining method steps by another person, e.g., a patient, diagnostic laboratory, or another physician? In other words, could Limelight inducement be predicated on Akamai direct, divided infringement in the context of method of treatment claims in ANDA cases?

With respect to a challenge to induced infringement on the basis of divided infringement, Judge Andrews of the District of Delaware provided hope to patentees, speculating: "Although the issue is not presently before the Court, I am dubious as to whether Defendant’s [defense based on a divided infringement theory] will be successful in light of the Federal Circuit’s en banc decision in Akamai . . . ." Takeda Pharm. Co. Ltd. v. Actavis Labs. FL, Inc., No. CV 15-451-RGA, 2016 BL 179558, n.4 (D. Del. June 6, 2016) (noting, however, that the issue "is properly a question for another day").

Recently, the Federal Circuit decided this issue in Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 845 F.3d 1357 (Fed. Cir. 2017), on appeal from the Southern District of Indiana. The patent at issue was directed to methods of administering pemetrexed disodium, a chemotherapy drug, after the patients had been premedicated with two vitamins, folic acid and vitamin B12. All of the method claims at issue required patient pretreatment by "administering" or "administration of" folic acid, followed by chemotherapeutic treatment with pemetrexed disodium. Id. at 1362. The parties had agreed that physicians gave patients the vitamin B12 and pemetrexed, but that patients self-administered the folic acid in accordance with guidance from the physician, and thus no one single actor performed all claimed method steps. Id.

In the face of a clear case of divided infringement, the Lilly decision applied the "directs or controls" standard for direct infringement that had been articulated in its en bancAkamai decision: one must (1) condition participation in an activity or receipt of a benefit upon others’ performance of one or more steps of the patented method, and (2) establish the manner or timing of that performance. Id. at 1365. Holding that the relevant benefit is pemetrexed treatment, the Court held that substantial evidence supported the district court’s finding that physicians condition receipt of the benefit of pemetrexed treatment on the administration of folic acid by the patient. Id. at 1366. Indeed, the Federal Circuit pointed to the product labeling, noting that folic acid is a requirement for premedication, and to evidence that a physician would refuse to give pemetrexed unless the patient had undergone the folic acid pretreatment. Id. Furthermore, the Federal Circuit rejected the arguments that "conditioning" could only be shown by imposing a legal obligation to perform the folic acid step, or by "interposing that step as an unavoidable technological prerequisite to participation." Id. at 1366-1367 (citations and quotations omitted). The Federal Circuit also rejected arguments that physicians needed to verify patients’ compliance or to threaten the denial of potentially life-saving treatment. Id.

As for the second prong of the "directs or controls" test, the Federal Circuit again turned to the product labeling and expert testimony to support the district court’s finding that the physician established the manner or timing—both dosage and time frame—of the folic acid pretreatment. Id. at 1367. The court was careful to point out, however, that its holding "does not assume that patient action is attributable to a prescribing physician solely because they have a physician-patient relationship." Id.

The foregoing analysis was sufficient to establish direct infringement under the Akamai standard, but what remained was the question of inducement by the ANDA filer. There, the Federal Circuit once again examined the proposed ANDA product’s labeling and found "repeated instructions and warnings regarding the importance of and reasons for folic acid treatment" that are directed at physicians and that encourage or recommend infringement. Id. at 1369. As such, the Court held that while both physicians and patients were the direct infringers, the ANDA filer was liable for inducing infringement by the physicians. Even though some physicians might not adhere to the labeling’s instructions and warnings, the proposed product labeling would inevitably lead at least some physicians to infringe the claimed methods, which suffices for establishing the requisite intent for inducement. Id. The Court also gave no weight to the fact that physicians may take steps beyond the instructions in the product labeling, finding their "decision to give patients even more specific guidance is irrelevant to the question of inducement." Id.

The Federal Circuit affirmed the holding of induced infringement in the Lilly case, which bodes well for enforcement of method claims that fall within the scope of the test laid out in Akamai. Of course, it may be prudent to now draft method claims that might avoid the level of additional proof needed to survive the Akamai test for divided infringement, particularly for drugs unlike pemetrexed that do not so steadfastly require the action of two entities. The Lilly case also shows the importance, when possible, of drafting method claims grounded in the text of the product labeling to more easily survive the inducement inquiry. It remains to be seen how courts will address charges of pharmaceutical method claim inducement in the context of other situations involving divided infringement, or perhaps if reliance on contributory infringement theories may increase for post-Akamai infringement of method claims.