CAFC affirms D. Del. in Sanofi v. Watson related to generic Multaq®

The outcome in Sanofi v. Watson:



After a three-day bench trial, the district court ruled
in crucial respects for Sanofi. Sanofi v. Glenmark Pharm.
Inc., USA, 204 F. Supp. 3d 665, 704–705 (D. Del. 2016).
As to the ’167 patent, the court made the following rulings
of relevance here: Sanofi proved that Watson’s and
Sandoz’s sale of their proposed generic drugs, with their
proposed labels, would induce physicians to infringe all
but one of the asserted claims, id. at 673–84; and Watson
and Sandoz did not prove that any of the asserted claims
were invalid for obviousness, id. at 685–96. As to the ’800
patent, the district court, rejecting the non-infringement
argument made by Watson and Sandoz, concluded that
the asserted claims do not exclude compositions contain-
ing polysorbate surfactants. Id. at 699–704. The district
court then entered a final judgment rejecting the obvious-
ness challenge to claims 1–6, 8–13, and 16 of the ’167
patent; finding inducement of infringement, by both
defendants, of all of those claims except claim 5; and
finding infringement by both defendants of claims 1–3, 5-
9, and 12–15 of the ’800 patent and by Watson of claims
10 and 11 as well.

Watson and Sandoz appeal. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(1). We affirm.


The issues presented to the CAFC:



Watson and Sandoz challenge the district court’s in-
ducement finding as to the ’167 patent, the district court’s
rejection of their obviousness challenge to that patent,
and the district court’s rejection of their prosecution-
disclaimer argument for limiting the scope of the ’800
patent claims.


As to inducement:


The dispute in this case involves an aspect of the con-
nection between the marketing and the medical providers’
infringement that is different from the two knowledge
requirements and is inherent in the word “induce” as it
has been understood in this area. The Supreme Court
stated the following in Global-Tech:
The term “induce” means “[t]o lead on; to influ-
ence; to prevail on; to move by persuasion or in-
fluence.” Webster’s New International Dictionary
1269 (2d ed. 1945). The addition of the adverb ‘ac-
tively’ suggests that the inducement must involve
the taking of affirmative steps to bring about the
desired result, see id., at 27.
563 U.S. at 760 (brackets in original). The purposeful-
causation connotation of that language is reinforced by
the Court’s statement: “When a person actively induces
another to take some action, the inducer obviously knows
the action that he or she wishes to bring about.” Id.

(...)

When proof of intent to encourage de-
pends on the label accompanying the marketing of a drug,
“[t]he label must encourage, recommend, or promote
infringement.” Takeda Pharm. USA, Inc. v. West-Ward
Pharm. Corp., 785 F.3d 625, 631 (Fed. Cir. 2015) (cita-
tions omitted).

(...)

We review the district court’s finding of inducement
based on encouragement and inferred intent for clear
error. See AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042,
1056 (Fed. Cir. 2010). We find no such error. The label
itself has a short “Indications and Usage” section, one
sentence long. It states what dronedarone is indicated
for: it “is indicated to reduce the risk of hospitalization for
atrial fibrillation.” J.A. 7609; see J.A. 7784.

(...)

Watson and Sandoz contend that, because Multaq®
has substantial noninfringing uses not forbidden by the
proposed labels, Sanofi, 204 F. Supp. 3d at 684, the dis-
trict court could not permissibly find intent to encourage
an infringing use. But there is no legal or logical basis for
the suggested limitation on inducement. Section 271(b),
on inducement, does not contain the “substantial nonin-
fringing use” restriction of section 271(c), on contributory
infringement. And the core holding of Grokster, a copy-
right decision that drew expressly on patent and other
inducement law, is precisely that a person can be liable
for inducing an infringing use of a product even if the
product has substantial noninfringing uses (like the peer-
to-peer software product at issue there, which was capa-
ble of infringing and non-infringing uses). 545 U.S. at
934–37. There is no basis for a different inducement rule
for drug labels.



As to obviousness:


Watson and Sandoz accept the legal framework under
which they had to establish that, as of February 2008, a
person of ordinary skill in the art would have had a
reasonable expectation that the processes claimed would
succeed in their (claimed) aims, a factual issue. Cumber-
land Pharm. Inc. v. Mylan Institutional LLC, 846 F.3d
1213, 1221–23 (Fed. Cir. 2017); PharmaStem Therapeu-
tics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1360 (Fed. Cir.
2007). On appeal, Watson and Sandoz make no argument
as to obviousness independent of their challenge to the
district court’s finding of no such expectation. We reject
the contention that the district court adopted an incorrect
legal standard on the issue, and we are unpersuaded that
the district court was clearly erroneous in determining
that Watson and Sandoz failed to prove the required
reasonable expectation. Based on those conclusions, we
affirm the nonobviousness judgment.

(...)

Watson and Sandoz’s appeal on obviousness thus ul-
timately rests on the contention that the district court’s
finding under the standard was clearly erroneous. We
conclude that it was not. Although the evidence might
well have supported the opposite finding, we cannot
conclude that the district court clearly erred in its finding
that Watson and Sandoz did not carry their burden of
showing that a person of ordinary skill in the art in
February 2008 would have had a reasonable expectation
that dronedarone would succeed in reducing cardiovascu-
lar hospitalization in the ATHENA patient population.

(...)


The
district court credited Dr. Reiffel’s testimony, explaining
why. Sanofi, 204 F. Supp. 3d at 692–95. We have been
furnished no basis on which to say, in light of the other
evidence in the case, that the district court clearly erred
in doing so. See Senju Pharm. Co. v. Lupin Ltd., 780 F.3d
1337, 1351 (Fed. Cir. 2015) (stressing need for exceptional
evidentiary reasons for appellate court not to defer to trial
court’s determination to credit expert testimony about
what prior art taught). This is not a case like Phar-
maStem, in which the expert testimony about prior-art
references was rejected because the testimony could not
“be reconciled with statements made by the inventors in
the [patent] specification and with the prior art references
themselves.” 491 F.3d at 1361; id. at 1361–63.