In Eli Lilly v. Teva (Fed. Cir. 2017), the patent owner (Eli Lilly) sued Teva under a theory of active inducement of infringement. In particular, the patent owner asserted that Teva induced others to infringe Eli Lilly’s patent (U.S. Pat. No. 7,772,209). Teva was not accused of directly infringing the patent itself, but instead was accused of indirectly infringing the patent by actively inducing physicians to directly infringe the patent. This case was further complicated because the patent claims asserted against Teva were method claims and one entity or person has to be responsible for completing all of the steps in the method claims. Here, the physicians completed some, but not all, of the patented method steps while the physician’s patients completed the remaining steps of the method claim. Fortunately, for the patent owner, there are ways to make one entity responsible for the actions of another. See Akamai.
In the present case, the defendants prepared to launch a generic version of a patented chemotherapy drug. The drug would be sold with specific instructions (i.e., Physician Prescription Information) to be followed by both the physician and the patient in order to mitigate harmful side effects of the chemotherapy drug.
The patient would self-administer folic acid and the physician would administer the chemotherapy drug. The patented method steps required administration of the folic acid and a separate step of administering the chemotherapy drug. The physician performed a step of the patented method and the patient performed the other step. However, neither the physician nor the patient performed all of the steps.
Active inducement of infringement
However, to find a party liable for active inducement of infringement, a single actor must be responsible for the infringement. Since neither the physician nor the patients completed all the steps, infringement could still be found if the acts of one were attributable to the other such that a single entity was responsible for infringement. In this case, the single entity would be the physician.
Two types of circumstances
There are two types of circumstances that may make the actions of one person attributable to another. The first is when that entity “directs or controls” the other’s performance. The second is when the actors form a joint enterprise. In this case, the patent owner did not allege that the patient and physician formed a joint enterprise. As such, the sole issue here was whether the physician directed and controlled the performance of the administration of the folic acid by the patient so as to hold the physician responsible for the acts of the patient.
The court explained that directing and controlling can be found based on a two prong analysis wherein an actor “(1) ’conditions participation in an activity or receipt of a benefit’ upon another’s performance of one or more steps of the patented method, and (2) ’establishes the manner and timing of that performance.’” The court also left open the possibility that other factual scenarios could exist that could still lead to the conclusion that one actor is directing and controlling the performance by another.
The court agreed that the evidence showed the physicians conditioned administration of the chemotherapy drug based on whether the patient self-administered folic acid. The Physician Prescription Information explained that the folic acid was a requirement for the patient if they want to receive the chemotherapy drug because folic acid reduced the severity of hematologic and gastrointestinal toxicity of the chemotherapy drug. The Physician Prescription Information also repeatedly stated that physicians should instruct patients to take folic acid. The Physician Prescription Information also informed patients that physicians may withhold the chemotherapy drug if the patients failed to self-administer folic acid. The patent owner’s expert also testified that it wouldn’t be safe to take the chemotherapy drug without taking the folic acid. Thus, administration of the folic acid by the patient at home and as directed was an absolute requirement. Also, if the physician realized that the patient did not take folic acid, the physician was instructed not to give the chemotherapy drug to the patient.
Teva attempted to characterize the instruction as mere guidance and insufficient to show “conditioning”. However, the written Instructions and the expert testimony regarding the critical nature of folic acid in the administration of the chemotherapy drug supported a finding that physicians crossed the line from merely guiding or instructing patients to take folic acid, to conditioning treatment with the chemotherapy drug based on whether the patient self-administered folic acid.
In the physician-patient relationship, the patient was not legally obligated to take folic acid and the defendant attempted to use this fact to show that the physician did not condition treatment with the chemotherapy drug based on the patient self-administering the folic acid. Nevertheless, the court did not require a legal contract for there to be sufficient direction or control by one actor to another.
The second prong of the test required that the physician establish the manner and timing of performance. The defendant argued that the product labeling gave patients wide latitude to select the dose, the dosage form and the timing of folic acid self-administration. Nevertheless, the court recognized that the Physician Prescription Information provided very specific information on how and when to take folic acid. In particular, the physician prescription information instructed physicians not only to tell patients to take folic acid orally but also to take 400 µg to 1000 µg of folic acid once daily beginning seven days before the first dose of the chemotherapy drug.
The court clarified that the finding of infringement was not based solely on the physician-patient relationship. In a physician-patient relationship, the physician gives patients directions of care. However, the court did not want to make a blanket rule that all directions by physicians to patients would be tantamount to physicians directing and controlling patients. The court clarified that there must be more than just the physician-patient relationship in order for the physician to be said to direct and control the actions of the patient.
Specific intent to induce others to directly infringe
As indicated above, the patent owner drug company did not sue the physicians (its customers) for patent infringement. Rather, the patent owner sued a competing drug manufacturer that made a generic version of the chemotherapy drug under a theory of active inducement of infringement of a patent. In particular, the patent owner asserted that the competitor chemotherapy drug manufacturer induced the physicians to directly infringe the patented method through the combined actions of the physicians and the patients.
To show active inducement of infringement, the patent owner must prove specific intent to infringe and action to actively induce infringement. In this case, the instructions provided in the Physician Prescription Information was not merely a suggestion or recommendation but instead repeatedly reinforced the importance of taking folic acid. It required the patient to self-administer folic acid at home under the direction and control of the physician and was not vague in its instructions. Because of this, the court found the necessary specific intent on the part of Teva to induce physicians to infringe the method claims.
For these reasons, the court held Teva liable for active inducement of infringement of a patent.
The legal value of this case is in the discussion of what acts are sufficient to constitute “direction and control” by one party over another. In this case, the physician had a high degree of latitude to withhold the chemotherapy drug treatment if the folic acid was not properly administered by the patient, while being admonished to instruct the patient to self-administer folic acid and how such folic acid was to be self-administered. The bottom line is that the physician had a great deal of control over the patient and could withhold treatment based on whether the patient followed the physician’s directions.
The further one goes away from having such a tight grip over another entity and what that entity does, the court would be less likely to find that the actions of one entity would be attributable to the other entity.