United States Court of Appeals
for the Federal Circuit
__________________________
BAYER SCHERING PHARMA AG AND
BAYER HEALTHCARE PHARMACEUTICALS, INC.,
Plaintiffs-Appellants,
v.
LUPIN, LTD., AND LUPIN PHARMACEUTICALS,
INC.,
Defendants-Appellees.
--------------------------------------------------------------------------
BAYER SCHERING PHARMA AG AND
BAYER HEALTHCARE PHARMACEUTICALS, INC.,
Plaintiffs-Appellants,
v.
SANDOZ, INC.,
Defendant-Appellee,
AND
WATSON PHARMACEUTICALS, INC.,
AND WATSON LABORATORIES, INC.,
Defendants-Appellees.
__________________________
2011-1143, -1228
__________________________
BAYER SCHERING PHARMA v. LUPIN LTD 2
Appeal from the United States District Court for the
Southern District of New York in Case Nos. 10-CV-5423
and 08-CV-3710, Judge Paul G. Gardephe.
___________________________
Decided: April 16, 2012
___________________________
PETER B. BENSINGER, JR., Bartlit, Beck Herman
Palenchar & Scott, LLP, of Chicago, Illinois, argued for
plaintiffs-appellants. With him on the brief were ADAM K.
MORTARA, PAUL J. SKIERMONT, SUNDEEP K. ADDY and
MATTHEW R. FORD. Of counsel on the brief was
LAWRENCE D. ROSENBERG, Jones Day, of Washington, DC.
MARK T. JANSEN, Kilpatrick Townsend and Stockton,
LLP, of San Francisco, California, argued for all defen-
dants-appellees. With him on the brief were GIA L.
CINCONE; and CEDRIC C.Y. TAN and KRISTIN M. COOKLIN,
of Washington, DC, for defendant-appellees Watson
Pharmaceuticals, Inc., et al. Also on the brief were
JOSEPH A. HYNDS and STEVEN LIEBERMAN, Rothwell, Figg,
Ernst & Manbeck, P.C., of Washington, DC, for defen-
dant-appellee Sandoz Inc.; and ROBERT F. GREEN and
CHRISTOPHER T. GRIFFITH, Leydig, Voit & Mayer, LTD., of
Chicago, Illinois, and JAMAICA P SZELIGA, of Washington,
DC, for defendants-appellees Lupin Ltd, et al.
CHRISTOPHER N. SIPES, Covington & Burling LLP, of
Washington, DC, for amicus curiae Pharmaceutical
Research and Manufacturers of America. With him on
the brief were ERIKA F. LIETZAN and ROGER A. FORD.
__________________________
Before NEWMAN, PLAGER, and BRYSON, Circuit Judges.
3 BAYER SCHERING PHARMA v. LUPIN LTD
Opinion for the court filed by Circuit Judge BRYSON.
Dissenting opinion filed by Circuit Judge NEWMAN.
BRYSON, Circuit Judge.
Bayer Schering Pharma AG and Bayer HealthCare
Pharmaceuticals, Inc., (collectively, “Bayer”) appeal from
two judgments of the United States District Court for the
Southern District of New York. In the first case, the court
dismissed Bayer’s patent infringement claims against
Watson Pharmaceuticals, Inc., and Watson Laboratories,
Inc., (collectively, “Watson”) and Sandoz, Inc. In the
second case, the court dismissed similar patent infringe-
ment claims against Lupin Ltd. and Lupin Pharmaceuti-
cals, Inc., (collectively, “Lupin”). We affirm.
I
The Drug Price Competition and Patent Term Resto-
ration Act of 1984 (“the Hatch-Waxman Act”), Pub. L. No.
98-417, 98 Stat. 1585, creates a procedure by which a
drug manufacturer can obtain permission from the Food
and Drug Administration (“FDA”) to market a generic
version of a previously approved drug. A manufacturer
seeking to market a generic drug is entitled to submit an
Abbreviated New Drug Application (“ANDA”), rather than
submitting a full New Drug Application (“NDA”). Eli
Lilly & Co. v. Teva Pharm. USA, Inc., 557 F.3d 1346,
1348 (Fed. Cir. 2009). The ANDA process streamlines
FDA approval by allowing the generic manufacturer to
rely on the safety and efficacy studies of a drug that has
previously been approved upon a showing that the generic
version and the relevant listed drug share the same active
ingredients and are bioequivalent. Caraco Pharm. Labs.,
BAYER SCHERING PHARMA v. LUPIN LTD 4
Ltd. v. Forest Labs., Inc., 527 F.3d 1278, 1282 (Fed. Cir.
2008).
In the case of drugs that enjoy patent protection, the
Hatch-Waxman Act creates a mechanism that allows for
prompt judicial determination of whether the ANDA
applicant’s drug or method of using the drug infringes a
valid patent. The Act makes it an act of infringement to
file an ANDA for a drug or for a use of the drug that is
claimed in a patent. 35 U.S.C. § 271(e)(2)(A). That
“artificial” act of infringement creates jurisdiction for a
court to entertain an action by the patentee against the
ANDA applicant in which issues of patent infringement
and validity can be resolved. Warner-Lambert Co. v.
Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003).
The Hatch-Waxman Act requires an NDA applicant
seeking FDA approval for a drug that enjoys patent
protection to identify every patent that claims the drug or
a use of the drug that could reasonably be asserted in an
infringement action. 21 U.S.C. § 355(b)(1). The FDA lists
the patents identified by the NDA applicant in a publica-
tion entitled Approved Drug Products With Therapeutic
Equivalence Evaluations, which is universally referred to
in the industry as the “Orange Book.” In the case of
patents claiming methods of use, FDA regulations provide
that only patents claiming “indications or other conditions
of use” that either have been approved by the FDA or are
in a pending NDA are to be submitted for listing in the
Orange Book. 21 C.F.R. § 314.53(b).
When an applicant files an ANDA seeking FDA per-
mission to market a generic drug, it is required to address
each patent in the Orange Book that relates to that drug.
Eli Lilly & Co., 557 F.3d at 1348. For method-of-use
patents that will not expire prior to the proposed market-
5 BAYER SCHERING PHARMA v. LUPIN LTD
ing of the generic drug, the ANDA applicant has two
options.
First, the ANDA applicant can include a statement,
known as a “section viii statement,” that the applicant is
not seeking approval for the method of use that is claimed
in the patent. 21 U.S.C. § 355(j)(2)(A)(viii). When sub-
mitting a section viii statement, the ANDA applicant
must include a proposed label that removes or “carves
out” the claimed method of use. See AstraZeneca LP v.
Apotex, Inc., 633 F.3d 1042, 1046 (Fed. Cir. 2010). The
FDA will approve an ANDA with a section viii statement
only if (1) there is no overlap between the proposed label
submitted by the ANDA applicant and the use described
in the Orange Book, and (2) removing the information
about the claimed method of use from the label does not
render the drug less safe or effective. See 21 C.F.R.
§ 314.127(a)(7); see also Applications for FDA Approval to
Market a New Drug, 68 Fed. Reg. 36,676, 36,682 (June
18, 2003) (“A section viii statement would not be appro-
priate [when] the ANDA applicant is seeking approval for
exactly the same labeling as that in the NDA for which
the patent was submitted.”).
Second, the ANDA applicant can file a “paragraph IV
certification,” which states that the patent “is invalid or
will not be infringed by the manufacture, use, or sale” of
the generic drug. 21 U.S.C. § 355(j)(2)(A)(vii)(IV); see
Novo Nordisk, 601 F.3d at 1361. If the ANDA applicant
files a paragraph IV certification, it must also send a
notice letter so advising the holder of the original NDA
and the patent owner. 21 U.S.C. § 355(j)(2)(B).
For method-of-use patents, the “artificial” infringe-
ment claim provided by section 271(e)(2)(A) lies only
against a patented use that has been approved by the
BAYER SCHERING PHARMA v. LUPIN LTD 6
FDA. Warner-Lambert, 316 F.3d at 1356. As this court
explained in the Warner-Lambert case, “because an
ANDA may not seek approval for an unapproved or off-
label use of a drug under 21 U.S.C. § 355(j)(2)(A)(i), it
necessarily follows that 35 U.S.C. 271(e)(2)(A) does not
apply to a use patent claiming only such a use.” Id.; see
also AstraZeneca Pharm. LP v. Apotex Corp., 669 F.3d
1370, 1377-78 (Fed. Cir. 2012); Allergan, Inc. v. Alcon
Labs., Inc., 324 F.3d 1322, 1334 (Fed. Cir. 2003).
II
Bayer produces and markets Yasmin, an oral contra-
ceptive. In 2001, the FDA approved the new drug appli-
cation for Yasmin that was filed by Bayer’s predecessor,
Berlex Laboratories, Inc. That application sought FDA
approval for the use of Yasmin “for oral contraception.”
The FDA approved the application, noting that it had
“concluded that adequate information has been presented
to demonstrate that the drug product is safe and effective
for use as recommended in the agreed upon enclosed
labeling text.”
The defendants in the two cases before us have all
filed ANDAs with the FDA to market generic versions of
Yasmin. The ANDAs, which track the original NDA as
required, seek FDA approval for the use of the generic
versions of Yasmin for oral contraception. In their respec-
tive ANDAs, the defendants have certified that the three
patents that Bayer had listed in the Orange Book in
connection with Yasmin are either invalid or would not be
infringed by the manufacture, use, or sale of their generic
version of Yasmin. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV).
In March 2008, Watson and Sandoz sent notice letters to
Bayer regarding their ANDA filings. In response, Bayer
filed a complaint against Watson and Sandoz in April
7 BAYER SCHERING PHARMA v. LUPIN LTD
2008, alleging infringement under section 271(e)(2)(A) of
one of the three listed patents, U.S. Patent No. 5,569,652
(“the ’652 patent”). Lupin sent Bayer a notice letter in
June 2010 regarding its ANDA filing. Bayer filed a
complaint against Lupin in July 2010 alleging infringe-
ment of the same patent.
The ’652 patent is a method-of-use patent with two
independent claims:
1. A method of simultaneously achieving, during
premenopause or menopause a gestagenic effect,
antiandrogenic effect, and an antialdosterone ef-
fect in a female patient in need thereof comprising
administering an amount of dihydrospirorenone to
said female patient, wherein said amount of dihy-
drospirorenone is effective to simultaneously
achieve a gestagenic effect, antiandrogenic effect
and antialdosterone effect in said patient.
11. A method of simultaneously achieving, during
premenopause or menopause, a contraceptive ef-
fect, an anti-androgenic effect, and an anti-
aldosterone effect in a female patient in need
thereof comprising administering an effective
amount of dihydrospirorenone and an effective
amount of an estrogenic compound, wherein said
effective amount of dihydrospirorenone is effective
to simultaneously achieve a gestagenic effect,
anti-androgenic effect, and an anti-aldosterone ef-
fect in said female patient.
Those claims recite that the claimed method achieves
three effects simultaneously: a contraceptive (or
gestagenic) effect, an anti-androgenic effect (which re-
BAYER SCHERING PHARMA v. LUPIN LTD 8
duces the activity of male hormones and can be effective
in treating conditions such as hirsutism or acne), and an
anti-aldosterone effect (also known as an anti-
mineralocorticoid effect, which can be effective in reduc-
ing excess water retention in the body).
Watson and Sandoz moved for judgment of nonin-
fringement on the pleadings under Federal Rule of Civil
Procedure 12(c). They argued that their ANDAs related
to the use of the generic form of Yasmin only for oral
contraception and not for the combination of uses claimed
in the ’652 patent. Accordingly, they argued, they could
not be held liable for inducing infringement of that pat-
ent. The district court granted their motions. The court
held that because the FDA had not given approval for the
use of the drug that was claimed in the ’652 patent, Bayer
could not state a claim for patent infringement. Bayer
Schering Pharma AG v. Sandoz, Inc., 741 F. Supp. 2d 541
(S.D.N.Y. 2010). The court explained that an action for
infringement of a method-of-use patent could be brought
under section 271(e)(2)(A) only if the FDA had approved
the use claimed in the patent under the patent-holder’s
NDA. The court noted that the FDA had approved the
use of Yasmin only for oral contraception, and not for the
simultaneous treatment of three conditions, which was
the use claimed in the ’652 patent. Because the court
concluded that there was nothing in the record to indicate
that the defendants sought to promote their generic
versions of Yasmin based on the anti-androgenic or anti-
aldosterone properties claimed in the ’652 patent, the
court rejected Bayer’s claim that the defendants were
liable for inducement of infringement under 35 U.S.C. §
271(b). The court therefore granted the motion and
entered judgment of noninfringement in favor of Watson
and Sandoz. Based on that ruling, Bayer and Lupin
stipulated to, and the court entered, final judgment in
9 BAYER SCHERING PHARMA v. LUPIN LTD
Bayer’s suit against Lupin as well. Bayer Schering
Pharma AG v. Lupin Ltd, No. 1:10-cv-05423 (S.D.N.Y.
Dec. 8, 2010). Bayer took appeals from both judgments,
and we consolidated the two cases for appeal.
III
As the district court correctly noted, the issue in these
cases is a very narrow one. The following propositions are
not in dispute: First, Bayer does not enjoy patent protec-
tion for the drug Yasmin or for the use of the drug for
contraception alone. See Bayer Schering Pharma AG v.
Barr Labs., Inc., 575 F.3d 1341 (Fed. Cir. 2009). Second,
the ’652 patent claims a method of use consisting of
simultaneously achieving an anti-androgenic effect, an
anti-aldosterone effect, and a contraceptive effect in a
premenopausal or menopausal female patient in need of
all three effects. Third, the only proposed “indication for
use” in the NDA application filed by Bayer’s predecessor
was for oral contraception, and the only use set forth in
the “Indications and Usage” section of the label attached
to the FDA’s approval letter was “for the prevention of
pregnancy in women who elect to use an oral contracep-
tive.” Fourth, the Indications and Usage section of the
defendants’ ANDAs used the same language and did not
refer to the other effects claimed in the ’652 patent. And
finally, the parties agree that under 35 U.S.C. §
271(e)(2)(A), the ’652 patent can be infringed only if the
defendants’ ANDAs seek FDA approval to market Yasmin
for the three simultaneous effects covered by the ’652
patent.
In light of those uncontested propositions, Bayer’s
quarrel with the district court is limited to contending
that the FDA did approve the use of Yasmin to obtain all
three effects simultaneously in menopausal and premeno-
BAYER SCHERING PHARMA v. LUPIN LTD 10
pausal patients in need of all three effects, and that the
defendants’ ANDAs seek FDA approval for the same uses.
Bayer contends that its label for Yasmin demonstrates
that the FDA approved the use of the drug for all three
effects, and that the similar label to be used by the defen-
dants on their generic version of Yasmin likewise covers
the use of the drug to obtain all three effects simultane-
ously in patients needing that combined treatment.
Therefore, according to Bayer, the defendants are liable
for inducing infringement by physicians and patients
because the label instructs the use of the generic drug to
obtain the three effects claimed in the ’652 patent. The
district court rejected Bayer’s argument, and so do we.
A
This court’s 2003 decision in Warner-Lambert Co. v.
Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003), sets the
framework for analyzing this case. In Warner-Lambert,
the patentee received approval from the FDA to market a
particular drug for use in treating epilepsy. Warner-
Lambert’s patent for use of the drug in treating epilepsy
had expired, but Warner-Lambert had an unexpired
patent claiming the use of the drug for treating neurode-
generative disease. That latter use of the drug, however,
had not been approved by the FDA. Apotex, a generic
manufacturer, filed an ANDA seeking approval to market
a generic form of the drug for the approved use of treating
epilepsy. Warner-Lambert sued under its unexpired
patent, but this court held that it is “not an act of in-
fringement [under section 271(e)(2)(A)] to submit an
ANDA for approval to market a drug for a use when
neither the drug nor that use is covered by an existing
patent, and the patent at issue is for a use not approved”
by the FDA. Id. at 1354-55.
11 BAYER SCHERING PHARMA v. LUPIN LTD
A second case from this court, decided the same year,
is even more closely on point. In that case, Allergan, Inc.
v. Alcon Laboratories, Inc., 324 F.3d 1322 (Fed. Cir. 2003),
Alcon, a generic drug manufacturer, filed an ANDA
seeking approval to market the unpatented drug bri-
monidine for the FDA-approved use of reducing intraocu-
lar pressure. Allergan had two patents that claimed other
uses for which brimonidine was effective: protection of the
optic nerve and neural protection. Those uses, however,
were not approved by the FDA. This court held that
because those additional uses were not approved by the
FDA, the generic drug applicant could not be liable for
infringement under section 271(e)(2)(A), even though
brimonidine necessarily had those protective effects in
patients who took the drug for the approved purpose. Id.
at 1324.
Based on Warner-Lambert and Allergan, the defen-
dants’ conduct would constitute infringement under
section 271(e)(2)(A) (or inducement of infringement under
section 271(b)) only if the defendants’ ANDAs sought
approval for the use protected by the ’652 patent, i.e., for
the combination of a gestagenic effect, an anti-androgenic
effect, and an anti-aldosterone effect in patients needing
that combination of effects. Because the defendants’
ANDAs are substantively identical to Bayer’s NDA, the
use or uses for which the ANDAs seek FDA approval are
necessarily the same as the uses for which the FDA has
given its approval by granting Bayer’s NDA. The ques-
tion to be answered, then, is whether the FDA has ap-
proved the use of Yasmin to achieve the combination of
the three effects claimed in the ’652 patent.
BAYER SCHERING PHARMA v. LUPIN LTD 12
B
The FDA-approved label for an approved drug indi-
cates whether the FDA has approved a particular method
of use for that drug. An NDA that seeks FDA approval
for a particular use for a drug must include “full reports of
investigations” demonstrating that the drug is safe and
effective for that use, 21 U.S.C. § 355(b)(1)(A), and it must
include “the labeling proposed to be used for such drug . . .
,” id. § 355(b)(1)(F). The FDA determines whether the
information submitted with the application shows that
the drug is safe and effective for the use described in the
submitted label. See id. § 355(d) (FDA approval requires
showing that “drug is safe for use under the conditions
prescribed, recommended, or suggested in the proposed
labeling thereof” and that there is “substantial evidence
that the drug will have the effect it purports or is repre-
sented to have under the conditions of use prescribed,
recommended, or suggested in the proposed labeling
thereof”); see also Requirements on Content and Format
of Labeling for Human Prescription Drug and Biological
Products, 71 Fed. Reg. 3922, 3934 (2006) (“The center-
piece of risk management for prescription drugs generally
is the labeling which reflects thorough FDA review of the
pertinent scientific evidence and communicates to health
care practitioners the agency’s formal, authoritative
conclusions regarding the conditions under which the
product can be used safely and effectively.”).
The label for Yasmin that was approved by the FDA
states in the Indications and Usage section that “Yasmin
is indicated for the prevention of pregnancy in women
who elect to use an oral contraceptive.” As noted, that
characterization tracks the FDA’s approval letter for
Yasmin, which stated that the NDA “provides for the use
of Yasmin . . . for oral contraception.”
13 BAYER SCHERING PHARMA v. LUPIN LTD
In claiming that the label recognizes FDA approval of
all three effects claimed in the ’652 patent, Bayer relies on
the “Pharmacodynamics” subsection of the “Clinical
Pharmacology” section of the label, which recites that
drospirenone, one of the two active compounds in Yasmin,
is a spironolactone analogue with antimineralo-
corticoid activity. Preclinical studies in animals
and in vitro have shown that drospirenone has no
androgenic, estrogenic, glucocorticoid, and an-
tiglucocorticoid activity. Preclinical studies in
animals have also shown that drospirenone has
antiandrogenic activity.
While that passage states that Yasmin exhibits anti-
mineralocorticoid activity and has the potential for anti-
androgenic activity based on animal studies, neither that
passage nor anything else on the label provides any safety
or efficacy information associated with the possible use of
Yasmin in treating patients who are in need of those
effects. Thus, while the label mentions potential anti-
mineralocorticoid and anti-androgenic activity, it does not
do so in any way that recommends or suggests to physi-
cians that the drug is safe and effective for administration
to patients for the purposes of inducing these effects.
The FDA labeling regulation, 21 C.F.R. § 201.57,
makes clear that the FDA has not approved the use of
Yasmin to produce the pharmacological effects that are
listed in the Clinical Pharmacology section of the label.
The portion of the regulation that is addressed to the
Indications and Usage section of the label requires the
indications set forth in that section to be supported by
“substantial evidence of effectiveness based on adequate
and well-controlled studies.” Id. § 201.57(c)(2)(iv). The
regulation adds that indications or uses “must not be
BAYER SCHERING PHARMA v. LUPIN LTD 14
implied or suggested in other sections of the labeling if
not included in this section.” Id. The reference in the
Clinical Pharmacology section of the label to the anti-
mineralocorticoid and anti-androgenic activity of dro-
spirenone is certainly not a direct indication of an appro-
priate use for Yasmin, and even if it could be considered
an “implied or suggested” indication of an appropriate
use, the regulation expressly states that such implied or
suggested uses do not constitute approved uses.
In addition, the FDA regulation requires the label to
provide a summary of the essential scientific information
needed for the safe and effective use of the drug. See 21
C.F.R. § 201.56(a)(1). The Yasmin label does not provide
physicians with such a summary with respect to the
drug’s anti-androgenic and anti-mineralocorticoid effects,
which is a further indication that the FDA did not ap-
prove the use of Yasmin to exploit those effects in treating
patients.
Bayer points out that the sections of the regulation
directed to the Indications and Usage portion of the label
address only “the portion of the labeling that can detail
the diseases or conditions the FDA has approved the drug
to treat,” and that other effects “that do not treat a dis-
ease or condition . . . will not be in the Indications section
and will still be FDA approved.” However, whether other
effects may be described outside the Indications and
Usage section of the FDA-approved label does not address
the issue in this case. The regulation states that the
Clinical Pharmacology section of the label must include “a
description of any biochemical or physiologic pharma-
cologic effects of the drug or active metabolites related to
the drug’s clinical effect in preventing, diagnosing, miti-
gating, curing, or treating disease, or those related to
adverse effects or toxicity.” 21 C.F.R. § 201.57(c)(13)(i)(B).
15 BAYER SCHERING PHARMA v. LUPIN LTD
That section of the label is also required to describe the
clinically significant pharmacokinetics of a drug or its
active metabolites; information related to in vitro and
animal studies is permitted to be included in that section
of the label only if the information is “essential to under-
stand dosing or drug interaction information presented in
other sections of the labeling.” Id. § 201.57(c)(13)(i).
Thus, the fact that certain of the effects of a drug are
described in the Clinical Pharmacology section of the label
does not mean that the FDA has approved the use of the
drug to produce those effects; it only ensures that physi-
cians are aware of the full range of the drug’s pharmacol-
ogical effects (especially those that might be considered
adverse effects) when prescribing the drug for a purpose
set forth in the Indications and Usage section and under
the conditions described in other parts of the label.
Bayer notes that FDA-approved methods of use do not
invariably appear in the Indications and Usage section of
the label. For example, an FDA-approved method of use
relating to the dosage or method of administration of a
drug would appear not in the Indications and Usage
section, but in the “Dosage and Administration” section of
the label. But that does not help Bayer in this case. The
’652 patent is narrowly focused on simultaneously achiev-
ing three effects in premenopausal or menopausal pa-
tients in need of all three effects; as the parties
stipulated, the claim limitation referring to a “patient in
need thereof” means a patient with a “perceived need for”
all three effects. The patent does not claim a method of
achieving a contraceptive effect in a patient in need of
contraception in which the drug used to achieve the
contraceptive effect has two generally beneficial addi-
tional effects. To practice the method claimed in the ’652
patent, a physician must determine that all three effects
are needed by a specific premenopausal or menopausal
BAYER SCHERING PHARMA v. LUPIN LTD 16
patient. FDA approval of that method of use would
require a showing that Yasmin was safe and effective for
simultaneously obtaining those three effects in patients
needing those effects. Acknowledgement of the safety and
efficacy of that specific method of use would be evidenced
by including it in the Indications and Usage section of the
label. Therefore, the point is not simply that the method
of use was not described in the Indications and Usage
section that shows lack of FDA approval; the point is that
the label, taken in its entirety, fails to recommend or
suggest to a physician that Yasmin is safe and effective
for inducing the claimed combination of effects in patients
in need thereof.
IV
Bayer relies on four pieces of evidence to support its
argument that the references to anti-mineralocorticoid
and anti-androgenic activity in the Clinical Pharmacology
section of the Yasmin label indicate that the FDA has
approved the use of Yasmin to induce those effects: (1) the
FDA regulation that addresses the listing of patents in
the Orange Book; (2) a declaration from Dr. Lee Shulman,
a physician; (3) a declaration from Dr. Susan Allen, a
former FDA official; and (4) marketing materials for
Yasmin that were approved by the FDA. That evidence,
however, demonstrates only that the FDA was aware that
Yasmin could cause the effects discussed in the ’652
patent. It does not go to the critical question of whether
the FDA has found Yasmin to be safe and effective for the
purpose of inducing those effects in a premenopausal or
menopausal patient with a specific need for those effects.
Absent that finding of safety and efficacy, and the recog-
nition of such safety and efficacy on the Yasmin label, the
Yasmin label cannot instruct (and the ANDA proposed
17 BAYER SCHERING PHARMA v. LUPIN LTD
label cannot induce infringement of) the method of use
claimed in the ’652 patent.
A
Bayer first relies on the FDA regulation that ad-
dresses the requirement to submit patents for inclusion in
the Orange Book, 21 C.F.R. § 314.53. Bayer argues that
the regulation supports its contention that the FDA
approved the pharmacological effects listed in the Clinical
Pharmacology section of the Yasmin label because the
regulation requires the submission not only of patents
that claim “indications,” but also patents that claim
“other conditions of use.” Id. § 314.53(b). In Bayer’s view,
that requirement shows that the FDA considered that
infringement under section 271(e)(2)(A) could extend to
the type of pharmacological effects detailed in the Clinical
Pharmacology section of the Yasmin label. Bayer further
contends that the regulation constitutes an interpretation
of section 271(e)(2)(A), and that it is entitled to deference
under Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984).
Bayer’s argument reflects a misinterpretation of sec-
tion 314.53. The regulation implements the patent listing
requirements of 21 U.S.C. § 355(b)(1), which requires a
patent holder to submit those patents for listing in the
Orange Book “with respect to which a claim of patent
infringement could reasonably be asserted . . . .” The fact
that Bayer submitted the ’652 patent for inclusion in the
Orange Book is not helpful to its case, for several reasons.
First, the FDA does not make a determination as to
whether particular patents should be listed in the Orange
Book; it simply lists those patents that are submitted by
patent holders. Second, the category of claims as to which
infringement could reasonably be asserted is plainly
BAYER SCHERING PHARMA v. LUPIN LTD 18
broader than the category of claims that are infringed.
Section 355(b)(1) and its implementing regulations en-
courage broad disclosure and do not require NDA appli-
cants to make an extrajudicial determination of actual
infringement. Section 271(e)(2)(A) defines the filing of an
ANDA as an act of infringement, but it does not alter the
underlying patent infringement analysis, which requires
in the case of a method-of-use patent that the accused
infringer use the patented product for the use claimed in
the patent. See Warner-Lambert, 316 F.3d at 1356.
Nothing in the regulation provides any support for
Bayer’s position in this case.
B
Dr. Shulman, an obstetrician-gynecologist with ex-
perience in the clinical use of contraceptives, stated in his
declaration that prescribing Yasmin as an oral contracep-
tive with the intent to produce an anti-mineralocorticoid
pharmacological effect and an anti-androgenic pharma-
cological effect “is clearly stated and on-label.” That
opinion, however, is contrary to the contents of the FDA-
approved label for Yasmin. The language of the Clinical
Pharmacology section of the label does not indicate that
the FDA has determined that the drug is safe or effective
in inducing those effects in patients with a specific need
for those effects, as claimed in the patent. See Warner-
Lambert, 316 F.3d at 1356.
As to Yasmin’s anti-mineralocorticoid effect, the label
simply states that drospirenone is a spironolactone ana-
logue “with antimineralocorticoid activity.” It does not
describe the extent of—or summarize the scientific evi-
dence for—that activity in humans. The Dosage and
Administration section of the label specifically describes
the use of the Yasmin “[t]o achieve maximum contracep-
19 BAYER SCHERING PHARMA v. LUPIN LTD
tive effectiveness”; it contains no discussion of the dosage
required to achieve a therapeutic level of anti-
mineralocorticoid effect. Even if knowing that dro-
spirenone is a spironolactone analogue were all the in-
formation a physician would need to induce a desired
therapeutic effect, the label contains no information
regarding the safety of the drug in a patient needing such
an effect. 1
Similarly, as to Yasmin’s anti-androgenic effect, the
information in the Clinical Pharmacology section of the
label indicates only that drospirenone has been shown to
generate that activity in preclinical studies in animals.
The FDA has not found the drug to be safe or effective in
inducing an anti-androgenic effect in a human patient,
and the label neither provides a statement to that effect
nor summarizes any supporting research. Therefore,
notwithstanding Dr. Shulman’s understanding to the
contrary, any prescription of Yasmin to produce either an
anti-mineralocorticoid or anti-androgenic effect has not
been approved by the FDA and is therefore “off label.”
C
Dr. Allen, a former FDA official, stated that while she
was at the FDA she oversaw the approval of the Yasmin
NDA, including the preparation of final contents of the
Yasmin label. Dr. Allen stated that the label indicates
that the FDA approved Yasmin for a therapeutic effect
1 The dissent questions whether we are finding
fault with the FDA procedures or the FDA-approved label.
To the contrary, the lack of information on the label
regarding dosage and administration to induce an anti-
mineralocorticoid effect is completely appropriate for a
drug that has not been found safe and effective for induc-
ing that effect.
BAYER SCHERING PHARMA v. LUPIN LTD 20
(contraception) and for the two additional pharmacologi-
cal effects (the anti-mineralocorticoid and anti-androgenic
effects). Regarding the pharmacological effects, Dr. Allen
stated that listing those effects in the Clinical Pharmacol-
ogy section of the label indicated that those effects were
confirmed in Yasmin and are “‘pertinent’ to human use of
the drug.” However, just because those effects were
confirmed and are “pertinent” to human use, and there-
fore important for a prescribing physician to be aware of,
does not mean—as the dissent contends—that the drug is
safe or effective for use in inducing those effects in a
patient with a specific need for them. Moreover, Dr. Allen
distinguished between the contraceptive effect of Yasmin
and the other effects, stating that the FDA “approved” the
“therapeutic effect (contraceptive)” and the “two addi-
tional pharmacological effects.” Importantly, Dr. Allen
did not say that Yasmin was approved for achieving those
two additional effects in patients with a therapeutic need
for those effects. Therefore, Dr. Allen’s view of the effect
of FDA approval does not draw into question the proposi-
tion that Yasmin was not approved for the purpose of
inducing the three simultaneous effects recited in the ’652
patent in premenopausal and menopausal patients.
D
Finally, Bayer argues that the FDA’s approval of cer-
tain promotional materials highlighting the anti-
mineralocorticoid and anti-androgenic properties of
Yasmin indicates that the FDA approved those pharma-
cological effects. The problem with that argument is that
the description of those effects is, in almost all cases,
qualified. In the case of the anti-mineralocorticoid effect,
the description is accompanied by a warning regarding
the potential for hyperkalemia in high-risk patients. In
the case of the anti-androgenic effect, the materials note
21 BAYER SCHERING PHARMA v. LUPIN LTD
that this effect is “seen in preclinical studies.” The FDA’s
regulations require such disclosure of “specific side ef-
fect[s] . . . in [approved] labeling.” 21 C.F.R. § 202.1(e)(4).
That treatment is in contrast to the “clinically proved
benefits” of contraceptive efficacy and cycle control. The
fact that Bayer was able to frame a required disclosure in
a positive light without crossing the line into promoting
such use does not mean that the FDA has approved a use
not otherwise indicated in the approved label. See 21
C.F.R. § 202.1(e)(6)(i) (advertisement violates 21 U.S.C.
§ 352(n), among other reasons, if it “[c]ontains a represen-
tation or suggestion, not approved or permitted for use in
the labeling, that a drug is . . . useful in a broader range
of conditions”).
***
As applied to this case, Warner-Lambert and Allergan
make clear that the defendants do not infringe Bayer’s
’652 patent under section 271(e)(2)(A) and that their sale
of the generic form of Yasmin would not induce infringe-
ment of that patent. The defendants’ ANDAs seek ap-
proval to market the generic form of Yasmin solely for
contraceptive use, and there is no valid patent on the use
of the drug for that purpose alone. The FDA-approved
label for Yasmin does not indicate to physicians that the
specific use claimed in the ’652 patent, i.e., producing
contraceptive, anti-mineralocorticoid, and anti-androgenic
effects in premenopausal and menopausal women with a
specific need of all three effects, is safe and effective.
Therefore, we agree with the district court that the FDA
has not approved such use and that the defendants can-
not be held liable for infringement of the patent.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
__________________________
BAYER SCHERING PHARMA AG AND
BAYER HEALTHCARE PHARMACEUTICALS, INC.,
Plaintiffs-Appellants,
v.
LUPIN, LTD. AND LUPIN PHARMACEUTICALS,
INC.,
Defendants-Appellees.
--------------------------------------------------------------------------
BAYER SCHERLING PHARMA AG AND
BAYER HEALTHCARE PHARMACEUTICALS, INC.,
Plaintiffs-Appellants,
v.
SANDOZ, INC.,
Defendant-Appellee,
AND
WATSON PHARMACEUTICALS, INC.,
AND WATSON LABORATORIES, INC.,
Defendants-Appellees.
__________________________
2011-1143, -1228
__________________________
BAYER SCHERING PHARMA v. LUPIN LTD 2
Appeal from the United States District Court for the
Southern District of New York in Case Nos. 10-CV-5423 and
08-CV-3710, Judge Paul G. Gardephe.
__________________________
NEWMAN, Circuit Judge, dissenting.
The district court dismissed this complaint on the plead-
ings under Fed. R. Civ. P. 12(c), thereby denying the pat-
entee the opportunity to litigate infringement of its U.S.
Patent No. 5,569,652 before the defendants market their
generic counterpart of the Yasmin® product. My colleagues
err in endorsing this dismissal, which is contrary not only to
the Federal Rules and judicial precedent, but also to the
premises of FDA generic drug practices and to the purposes
of the Hatch-Waxman Act.
Motions for judgment on the pleadings pursuant to Rule
12(c) are considered under the same standards applicable to
Rule 12(b)(6). King v. Am. Airlines, Inc., 284 F.3d 352, 356
(2d Cir. 2002). Pleading standards are a matter of regional
circuit law. See CoreBrace LLC v. Star Seismic LLC, 566
F.3d 1069, 1072 (Fed. Cir. 2009) (“The question . . . whether
a Rule 12(b)(6) motion was properly granted is a purely
procedural question not pertaining to patent law, to which
this court applies the rule of the regional . . . circuit.”).
Review of the substantive patent law embodied in the
pleadings is, however, in accordance with the law of this
court.
The district court held, on the pleadings as a matter of
law, that the generic counterpart of the Bayer product,
brand name Yasmin®, does not infringe the ’652 patent. My
colleagues on this panel affirm, on the theory that some of
the claimed properties of the Yasmin® product are not
covered by the FDA-approved label, in part because these
3 BAYER SCHERING PHARMA v. LUPIN LTD
properties are stated in a different part of the label. The
FDA-approved label for Yasmin® recites use as an oral
contraceptive in the section headed “Indications and Usage,”
and recites the properties of anti-androgenic activity (acne
control) and anti-mineralocorticoid activity (diuretic effect)
in the “Clinical Pharmacology” section. The ’652 patent
recites these three effects in the same claim.
The court holds that the listing of some of the Yasmin®
properties in the Clinical Pharmacology section of the FDA
label, instead of the Indications and Usage section, removes
the generic counterpart of the Yasmin® product from the
scope of the ’652 claims. That ruling is in error, for the
portion of the FDA label in which a product’s properties are
described is irrelevant to whether the patent is infringed by
sale or use of the product. The court also finds, albeit
incorrectly, that “the label, taken in its entirety, fails to
recommend or suggest to a physician that Yasmin is safe
and effective for inducing the claimed combination of effects
in patients in need thereof,” maj. op. 16, and holds that this
also requires non-infringement on the pleadings, as a mat-
ter of law. Neither the district court, nor this court, con-
ducted a standard infringement analysis.
The infringement question is whether sale or use of the
generic equivalent of the Yasmin® product, in accordance
with the representations in the ANDA with respect to FDA
approval for the generic equivalent of Yasmin®, infringes
the ’652 patent. FDA approval is embodied in the approved
label for the Yasmin® product. The court concentrates on
the inclusion of the anti-androgenic and anti-
mineralocorticoid activity in the Pharmacodynamics section
of the label instead of the Indications and Usage section.
The purpose of the Pharmacodynamics section is to describe
“[i]mportant pharmacologic effects other than the main
desired effect” of the drug product. See FDA Draft Guidance
BAYER SCHERING PHARMA v. LUPIN LTD 4
for Industry: Clinical Pharmacology Section of Labeling for
Human Prescription Drug and Biological Products—Content
and Format, cited at Rep. Br. 10. The court now propounds
the theory that the FDA label for Yasmin® is required to
include specific dosages for the anti-androgenic and anti-
mineralocorticoid effects in the same section of the label as
“the main desired effect,” in order for the patent to be in-
fringed. Maj. op. at 18-19 (“The Dosage and Administration
section of the label specifically describes the use of the
Yasmin ‘[t]o achieve maximum contraceptive effectiveness’;
it contains no discussion of the dosage required to achieve a
therapeutic level of anti-mineralocorticoid effect. Even if
knowing that drospirenone is a spironolactone analogue
were all the information a physician would need to induce a
desired therapeutic effect, the label contains no information
regarding the safety of the drug in a patient needing such
an effect.”). I can’t tell whether the court is holding that the
FDA label is fatally flawed, but even if the FDA were some-
how remiss (I discern no evidence thereof), this does not
render ineffective the patent directed to the combination of
these three effects, all of which are set forth in the FDA
label for which the generic producers have filed their AN-
DAs. The placement of these effects in the FDA-approved
label does not immunize the identical generic counterpart
from infringement.
The FDA’s mission is to “protect public health by ensur-
ing that . . . drugs are safe and effective.” 21 U.S.C. §393(b).
In FDA v. Brown and Williamson Tobacco Corp., 529 U.S.
120 (2000), the Court explained that:
Viewing the FDCA [Food, Drug, and Cosmetic Act]
as a whole, it is evident that one of the Act’s core ob-
jectives is to ensure that any product regulated by
the FDA is “safe” and “effective” for its intended
use. . . . This essential purpose pervades the FDCA
5 BAYER SCHERING PHARMA v. LUPIN LTD
. . . . The FDCA requires premarket approval of any
new drug, with some limited exceptions, and states
that the FDA “shall issue an order refusing to ap-
prove the application” of a new drug if it is not safe
and effective for its intended purpose.
529 U.S. at 133-34.
The panel majority is incorrect in its statement that the
safety and efficacy of the anti-androgenic and anti-
mineralocorticoid effects were never reviewed by the FDA.
Maj. op. at 16 (“Absent that finding [by the FDA] of safety
and efficacy, and the recognition of such safety and efficacy
on the Yasmin label, the Yasmin label cannot instruct (and
the ANDA proposed label cannot induce infringement of) the
method of use claimed in the ’652 patent.”). The Clinical
Pharmacology section of the Yasmin® label discusses these
effects of the active ingredient drospirenone: “Drospirenone
is a spironolactone analogue with antimineralocorticoid
activity. . . . Preclinical studies in animals have also shown
that drospirenone has antiandrogenic activity.”
The record contains, among other evidence, the expert
declaration of Dr. Allen, FDA past Director of the Division
of Reproductive and Urologic Drug Products, that these
effects were demonstrated when Yasmin® was presented for
FDA approval. Dr. Allen states:
Each of the three effects identified in Claim 11 of
the ’652 Patent are listed in the professional label-
ing for Yasmin®. . . . The inclusion of statements
describing these three effects in the FDA-approved
labeling means that the FDA approved (a) the
therapeutic effect (contraceptive) and (b) the two
additional pharmacological effects (anti-androgenic
and anti-mineralocorticoid) of Yasmin®.
BAYER SCHERING PHARMA v. LUPIN LTD 6
When the FDA approved the Yasmin® NDA, it “concluded
that adequate information has been presented to demon-
strate that the drug product is safe and effective for use as
recommended in the agreed upon enclosed labeling test.”
FDA Approval Letter (May 11, 2001). Dr. Shulman, a
leading obstetrician-gynecologist with extensive experience
in oral contraceptive research and clinical use, stated in his
declaration that prescriptions of Yasmin® as an oral contra-
ceptive with intent to produce the two further pharmacol-
ogical effects are “on-label,” and that he prescribes Yasmin®
for these additional pharmacological effects. Dr. Shulman
stated:
The physician labeling for Yasmin® contains the
data supporting the use of Yasmin® in the treat-
ment method of claim 11 of the ’652 patent. . . . Be-
cause drospireneone has anti-mineralocorticoid
activity as disclosed in the Clinical Pharmacology
section, the prescription of Yasmin® as an oral con-
traceptive with the intent to produce an anti-
mineralocorticoid pharmacological effect is clearly
stated and on-label . . . . Because drospireneone has
anti-androgenic activity, the prescription of Yas-
min® as an oral contraceptive with the intent to
produce an anti-androgenic pharmacological effect
is clearly stated and on label. . . . I have prescribed
Yasmin® for premenopausal women in accordance
with claim 11 of the ’652 patent, continue to do so,
and consider such prescriptions to be on-label.
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the
Court cautioned that “Rule 12(b)(6) does not countenance . .
. dismissals based on a judge’s disbelief of a complaint’s
factual allegations.” 550 U.S. at 556 (quoting Neitzke v.
Williams, 490 U.S. 319, 327 (1989)). Bayer has sufficiently
alleged that an “intended use” for Yasmin®, as approved by
7 BAYER SCHERING PHARMA v. LUPIN LTD
the FDA, is the simultaneous treatment of all three effects.
The majority’s statement at n.1 that Yasmin® “has not been
found safe and effective” is contrary to the record.
All of the defendants state in their ANDAs that their
product is identical to the Yasmin® product and that the
biological effects are identical, with no carve-outs from the
methods and uses set forth on the FDA label. Contrary to
representations made on this appeal, defendant Sandoz
described Yasmin® to the district court as “the only drug
that combines the properties of oral contraception, antimin-
eralocorticoid (antialdosterone), and anti-androgenic proper-
ties, which cause exceptional control of acne and greatly
reduced fluid retention.” J.A. 1212. Sandoz stated that
“[n]o other product offers this combination of therapeutic
properties and contraception.” J.A. 1216.
The evidence before the district court, presented in re-
sponse to this motion, supported the statement in Bayer’s
complaint that a “significant proportion of drospirenone and
ethinylestradiol prescriptions are written with the intent of
producing three pharmacological effects – gestagenic, anti-
aldosterone, and anti-androgenic.” Even were these thresh-
old facts disputed – and they were not – it is improper for a
court to make contrary findings under Rule 12(c). In con-
sidering a motion to dismiss, “the court is to accept as true
all facts alleged in the complaint.” Kassner v. 2nd Ave.
Delicatessen Inc., 496 F.3d 229, 237 (2d Cir. 2007).
My colleagues hold that the ’652 patent cannot be in-
fringed, as a matter of law, unless the label specifically
authorizes physicians to prescribe Yasmin® to treat acne or
as a diuretic. Maj. op. at 19. This criterion of infringement
is as irrelevant as it is factually incorrect. Bayer states, and
the record adduced on this motion supports, that “Bayer
promoted the ’652 patented method because Yasmin®’s
BAYER SCHERING PHARMA v. LUPIN LTD 8
unique pharmacological profile differentiated it from other
oral contraceptives. The FDA pre-cleared advertising
containing this promotion because it is consistent with
Yasmin®’s FDA-approved labeling,” Rep. Br. 27. No con-
trary evidence is in the record. The adverse inferences
drawn by the district court and the adverse findings made
by this court are inappropriate as well as incorrect, for it is
not disputed that all of the defendants seek approval of
their Yasmin® counterpart on representations of chemical
and biological identity to the approved Yasmin® product.
The infringement inquiry is whether the generic coun-
terpart, when used in accordance with its proposed ANDA
authorization, would infringe the patent. The Hatch-
Waxman Act does not alter the inquiry into infringement.
As summarized in Harman, Patents and the Federal Circuit
494 n.161 (9th ed. 2009): “The inquiry under § 271(e)(2) is a
standard infringement test. The only difference is that the
allegedly infringing drug has not yet been marketed and
therefore the question of infringement must focus on what
the ANDA applicant will likely market if its application is
approved.” See also Warner-Lambert Co. v. Apotex Corp.,
316 F.3d 1348, 1366 (Fed. Cir. 2003) (“The proper inquiry
under § 271(e)(2)(A) is whether, if a particular drug were
put on the market, it would infringe the relevant patent.”).
Whether a patent is infringed is a question of fact, and
cannot be resolved on pleadings by adverse inference or
assumption. Contrary to the theory of the panel majority,
Warner-Lambert does not support this dismissal. In War-
ner-Lambert the patented neurodegenerative use was not
the label-approved use, and was not the use for which the
ANDA was submitted. 316 F.3d at 1364 (“In the absence of
any evidence that Apotex has or will promote or encourage
doctors to infringe the neurodegenerative method patent
[for the “off-label” use], there has been raised no genuine
9 BAYER SCHERING PHARMA v. LUPIN LTD
issue of material fact.”). In contrast, for Yasmin® it is not
disputed that the three properties recited in the patent
claim are coextensive with the FDA-approved label. Bayer’s
complaint, and the several declarations provided in re-
sponse to this motion, show that the FDA so recognized, and
also show that physicians prescribe Yasmin® for this com-
bination of effects. The court errs in ruling as a matter of
law that the FDA-approved label for Yasmin® does not
encompass the three effects stated in the label and claimed
in the ’652 patent. Bayer’s complaint contains well pleaded
and well-supported factual allegations, and states a plausi-
ble claim of infringement. The complaint “state[s] a claim
for relief that is plausible on its face.” Twombly, 550 U.S. at
570.
This appeal is from dismissal and judgment on the
pleadings. However, a plaintiff’s nonconclusory factual
allegations must be taken as true at this stage. See
Swerkiewicz v. Sorema N. A., 534 U.S. 506, 508 n.1 (2002)
(on a motion to dismiss, the court “must accept as true all of
the factual allegations contained in the complaint.”). These
firm premises are reinforced in Ashcroft v. Iqbal, 556 U.S.
662 (2009). Yet the court discounts Bayer’s factual allega-
tions, creating adverse inferences unrelated to either FDA
approval or the criteria of infringement. See Allergan, Inc.
v. Alcon Labs., Inc., 324 F.3d 1322, 1331 (Fed. Cir. 2003) (“a
court must employ a traditional infringement analysis,
focusing on all elements of infringement”). The court in
Allergan explained once again that the “only difference in
the analysis of a traditional infringement claim and a claim
of infringement under section 271(e)(2) is the timeframe
under which the elements of infringement are considered.”
Id.
Bayer is entitled to the opportunity to resolve patent in-
fringement at the Hatch-Waxman stage. Dismissal of the
BAYER SCHERING PHARMA v. LUPIN LTD 10
complaint was contrary to the premises of the Federal
Rules, and contrary to the purposes of the Hatch-Waxman
Act. I respectfully dissent.