Eli Lilly v. Teva: District Court Applies the Federal Circuit's Recent Akamai Decision to Drug Method-of-Treatment Claim

In 2014 I published an article entitled “Caught between a Rock and a Hard Place: How Limelight Compounds the Challenges Facing Biotechnology Innovators after Mayo and Myriad” (available here), which explained how Supreme Court’s decision in Limelight Networks v. Akamai Technologies limiting the ability of patentees to establish liability in cases of divided infringement had undermined the value of method claims, particularly with respect to diagnostics and drugs.  In that article, I noted that in Limelight the Court had explicitly pointed out that its decision did not necessarily preclude the Federal Circuit from revisiting that court's decision in Muniauction, and to reinterpret 271(a) in a manner that would allow a patent owner to hold at least certain parties liable for active participation in a concerted act of divided infringement.  I also predicted that that the Federal Circuit would likely revisit the issue and expand 271(a) in a manner that would hold at least some divided infringer’s liable.

On Aug. 13, 2015, the Federal Circuit did just that when it issued an en banc opinion unanimously setting forth the law of divided infringement under 35 U.S.C. § 271(a) and vacating the earlier panel decision. Akamai Technologies, Inc. v. Limelight Networks, Inc., 2015 WL 4760450 (Fed. Cir.).  Akamai explicitly overruled prior case law regarding divided infringement, “[t]o the extent [those] prior cases formed the predicate for the vacated panel decision,” and no longer limited § 271(a) to principal-agent relationships, contractual arrangements, and joint enterprises.

Under 35 U.S.C. § 271(a), direct patent infringement occurs where all steps of a claimed method are performed by or attributable to a single entity. In Akamai, the court held that “[w]here more than one actor is involved in practicing the steps, a court must determine whether the acts of one are attributable to the other such that a single entity is responsible for the infringement.” On a claim for direct infringement of a method patent, the court will hold an entity responsible for anothers’ performance of method steps under two circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise. With respect to the former requirement, Akamai concluded that “liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” In those instances, the third party’s actions are attributed to the alleged infringer “such that the alleged infringer becomes the single actor chargeable with direct infringement.”

In Limelight, Eli Lilly filed an amicus brief with the Supreme Court explaining the critical role of method-of-treatment claims in pharmaceutical innovation, and noting that such claims ‘‘routinely and sometimes necessarily present divided infringement issues.’’ According to Lilly, ‘‘[i]t has been increasingly common for patent challengers to argue that the relationship between these various actors does not meet the current standard articulated by the Federal Circuit necessary to find liability for direct infringement under 35 USC 271(a).’’

On August 25, 2015, Eli Lilly’s concerns were presumably at least partially abated by the district court's decision  in Eli Lilly v. Teva (available here).  The  Eli Lilly court applied the new Akamai standard and held that doctors directly infringed an Eli Lilly method-of-treatment claim, even though the claim explicitly recites the step of administering folic acid to a patient prior to administration of the drug, and it is the patient that takes the folic acid, i.e., the doctor does not administer the folic acid to the patient.  As a consequence, a generic company would be liable for inducing the doctor’s infringement based on drug labeling that instructs doctors to have their patients take folic acid prior to the doctor administering the drug to the patient.  It is significant that the generic drug company is required by law to use essentially the same label as the branded drug, and is thus required to “induce” doctors to instruct patients to take their folic acid.

In particular, the district court found that “the instant case involves the administration of a medical treatment, the factual circumstances are sufficiently analogous to those in Akamai to support a finding of direct infringement by physicians under § 271(a), and thus inducement of infringement by Defendants under § 271(b), under the legal standard recently set forth by the Federal Circuit.”  The generic company defendants argued unsuccessfully that the "actions of the patient in taking folic acid prior to [administration of the drug] cannot be attributed to the physician because the physician does not physically place the folic acid into the patients’ mouth, and because patients are instructed to obtain folic acid, either by prescription or over the counter, and take it on their own.”  But the district court found this argument to be premised on “now overruled case law on divided infringement,” and found the following language of the label to be unambiguous on this point:

The prescribing information requires physicians to “[i]nstruct patients to initiate folic acid 400 mcg to 1000 mcg orally once daily beginning 7 days before the first dose of ALITMA®.” Additionally, the patient information states “[i]t is very important to take folic acid . . . during your treatment with ALITMA to lower your chances of harmful side effects. You must start taking 400-1000 micrograms of folic acid every day for at least 5 days out of the 7 days before your first dose of ALITMA.” TX. 3017 at 2 (emphasis in original). It is clear from the patent, the prescribing information, and the patient information that taking folic acid in the manner specified is a condition of the patient’s participation in pemetrexed treatment as described by the patent, and is necessary in order to receive the benefit of such treatment. If the patient fails to carry out this step, he or she would not receive the benefit of the patented method, i.e. a reduction of potentially life-threatening toxicities caused by pemetrexed. The physician, based upon the patented method, directs the manner and timing of the patient’s ingestion of folic acid—400 to 1000 μg of folic acid for at least five days out of the seven days prior to and during pemetrexed administration—and the patient is required to do so to receive the full benefit of the treatment.