Addressing the issue of divided infringement, the US Court of Appeals for the Federal Circuit affirmed the district court’s finding of induced infringement even though no single actor performed all steps of the asserted claims in a method patent. Eli Lilly and Co. v. Teva Parenteral Medicines, Inc., Case No. 15-2067 (Fed. Cir., Jan. 12, 2017) (Prost, C.J.).
The patent at issue related to methods of administering the chemotherapy drug pemetrexed disodium (pemetrexed) after pretreatment with two common vitamins, folic acid and vitamin B12. Eli Lilly markets pemetrexed under the brand name ALIMTA®. After the patent issued in 2010, Teva and other drug makers notified Eli Lilly that they had submitted Abbreviated New Drug Applications seeking approval by the US Food and Drug Administration to market generic versions of ALIMTA®, and also filed Paragraph IV certifications declaring the patent invalid, unenforceable and not infringed. Eli Lilly brought suit against Teva and the other drug makers, alleging infringement under the Hatch-Waxman Act. The parties agreed that no single actor performed all steps of the asserted claims—rather, the steps were divided between physicians administering vitamin B12 and pemetrexed and patients administering folic acid.
During the litigation in 2013, the defendants conditionally conceded induced infringement under then-current law set forth in the Federal Circuit’s Akamai decision (Akamai II). The Supreme Court of the United States, however, reversed Akamai II, holding that liability for inducement cannot be found without direct infringement, and remanded to the Federal Circuit to reconsider the standards for direct infringement. This resulted in the Federal Circuit’s Akamai V decision in 2015. After applying Akamai V, which broadened the circumstances in which others’ acts may be attributed to a single actor to support direct infringement liability in cases of divided infringement, the district court found that defendants still induced infringement. Defendants appealed. Defendants also appealed the district court’s finding that the asserted claims were not invalid.
The Federal Circuit affirmed, stating that under Akamai V, the performance of method steps is attributable to a single entity in two circumstances: (1) when that entity “directs or controls” others’ performance, or (2) when the actors “form a joint enterprise.” In the instant case, the question was whether physicians directed or controlled their patients’ administration of folic acid. As to that question, the Court reiterated the two-prong test set forth in Akamai V, where directing or controlling others’ performance includes circumstances in which an actor conditions participation in an activity or receipt of a benefit upon others’ performance of one or more steps of a patented method, and establishes the manner or timing of that performance. The Court also noted that going forward, “other factual scenarios may arise which warrant attributing others’ performance of method steps to a single actor.”
Regarding the first prong, the Federal Circuit, after considering the product labeling and expert testimony, agreed with the district court’s finding that physicians condition pemetrexed treatment on folic acid pretreatment. The Court noted that for purposes of applying the test, “conditioning” was not limited to “legal obligations or technological prerequisites.” Regarding the second prong, the Federal Circuit again agreed with the district court’s ruling that, in view of the record evidence, physicians establish the manner and timing of patients’ folic acid pretreatment. The Court cautioned, however, that its holding “does not assume that patient action is attributable to a prescribing physician solely because they have a physician-patient relationship,” and stated that it “leave[s] to another day what other scenarios also satisfy the ‘direction or control’ requirement.” Turning next to the issue of whether Eli Lilly proved the requisite intent to find liability for induced infringement, the Federal Circuit found that the evidence established that the product labeling in issue would inevitably lead some physicians to infringe which was sufficient to establish the requisite intent for inducement.