Smithkline Beecham Consumer Healthcare, L.P. v. Watson Pharmaceuticals, Inc.

211 F.3d 21, 54 U.S.P.Q. 2d (BNA) 1317, 2000 U.S. App. LEXIS 6200, 2000 WL 345704
CourtCourt of Appeals for the Second Circuit
DecidedApril 4, 2000
DocketDocket No. 99-9501
StatusPublished
Cited by21 cases

This text of 211 F.3d 21 (Smithkline Beecham Consumer Healthcare, L.P. v. Watson Pharmaceuticals, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Smithkline Beecham Consumer Healthcare, L.P. v. Watson Pharmaceuticals, Inc., 211 F.3d 21, 54 U.S.P.Q. 2d (BNA) 1317, 2000 U.S. App. LEXIS 6200, 2000 WL 345704 (2d Cir. 2000).

Opinion

WINTER, Chief Judge:

This appeal arises out of a copyright action alleging infringement of appellant’s copyright in a user’s guide and audiotape developed for its Nicorette-brand gum. Appellees, in obtaining approval to sell a competing generic nicotine gum product, were directed by the Food and Drug Administration (“FDA”) to use labeling almost identical to appellant’s copyrighted guide and tape. The FDA acted pursuant to the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act (“FFDCA”), see Drug Price Competition [23]*23and Patent Term Restoration Act of 1984 § 101, 21 U.S.C. § 355© (“Hatch-Wax-man Amendments”). Judge Chin initially-enjoined appellees from selling or shipping its nicotine gum with the infringing label. See SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharms., Inc., 63 F.Supp.2d 467, 473 (S.D.N.Y.1999) (“SmithKline /”). Subsequently, the district court determined that the balance of the hardships tilted in favor of appellees and dissolved its earlier injunction, see SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharms., Inc., No. 99 Civ. 9214, 1999 WL 1243894, at *5-*7 (S.D.N.Y. Dec.22, 1999) (“SmithKline II”), and SmithKline appealed.

Appellees cannot be liable for copyright infringement because the Hatch-Waxman Amendments require generic drug producers to use the same labeling as was approved by the FDA for, and is used by, the producer of the pioneer drug. We therefore affirm.

BACKGROUND

Appellant SmithKline Beecham Consumer Healthcare, L.P. (“SmithKline”) manufactures and sells Nicorette nicotine polacrilex gum (“Nicorette”), an over-the-counter (“OTC”) product designed to help smokers overcome the cigarette habit. The FDA administrative history of Nicor-ette, which was the subject of a patent, is as follows. On January 13, 1984, Smith-Kline obtained FDA approval to sell 2 mg strength Nicorette for prescription-only use. Later, on June 8, 1992, the FDA approved prescription-only use of 4 mg Nicorette. Finally, on February 9, 1996, the FDA approved both 2 mg and 4 mg Nicorette for OTC sale. Pursuant to 21 U.S.C. § 355(c)(3)(D)(iv), SmithKline obtained a three-year period of exclusivity— essentially an extension of the effective term of SmithKline’s Nicorette patent based on additional clinical testing — for OTC sale of Nicorette.

SmithKline’s user’s guide and audiotape were developed in the course of its research into producing a method of, and product for, quitting smoking. To obtain approval for the OTC sale of Nicorette, SmithKline submitted various versions of the guide and tape to the FDA for review. See 21 U.S.C. § 355(b)(1)(F) (requiring application for approval of drug to include “specimens of the labeling proposed to be used for such drug”). Between July 1993 and February 1996, SmithKline made approximately 70 changes to the guide and the tape at the FDA’s request. Most of the changes related to factual matters, safety, and efficiency. The tape and guide were ultimately included as part of Nicor-ette’s FDA-approved OTC labeling. On April 21, 1998, SmithKline registered a federal copyright for the guide and audiotape script. On February 9, 1999, the day when its exclusivity period for Nicorette expired, SmithKline registered a copyright for the words and music on the tape.

Shortly thereafter, appellees Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Circa Pharmaceuticals, Inc. (collectively “Watson”) obtained FDA approval for the OTC marketing of a generic version of nicotine gum intended to compete directly with Nicorette. To obtain that approval from the FDA, Watson had to comply with the requirement imposed by the Hatch-Waxman Amendments that “the labeling proposed for [its] new drug [be] the same as the labeling approved for” Nicorette. 21 U.S.C. § 355(j)(2)(A)(v); see also 21 C.F.R. § 314.127(a)(7) (“FDA will refuse to approve an abbreviated application for a new drug under section 505© of the act [if] .... information submitted in the abbreviated new drug application is insufficient to show that the labeling proposed for the drug is the same as the labeling approved for , the listed drug....”). Thus, Watson’s generic nicotine gum was “accompanied by a user guide and audio tape that [we]re virtually identical to SmithKline’s.” SmithKline I, 63 F.Supp.2d at 469.

Before Watson could sell its product to the public, SmithKline initiated the pres[24]*24ent copyright action, alleging willful infringement of its guide and tape. The district court granted a preliminary injunction that effectively stopped Watson from shipping or selling its product. See id. at 473. The district court relied on a March 1999 FDA letter recounting that the agency had explained to Watson that “the ‘same labeling’ requirement d[oes] not require that the generic’s behavioral support materials be identical to the innovator’s materials” and indeed that “generic sponsors, like all other sponsors of nicotine-based smoking cessation aids, have discretion to design their own audio support materials.” Id. at 470. Based on this representation, the district court “concluded that the FDA would have permitted Watson to use a user’s guide and audio tape that deviated to some extent from SmithKline’s materials ... [and] that were sufficiently different in wording and otherwise to avoid copyright concerns.” Smith-Kline II, 1999 WL 1243894, at *3.

Subsequently, the FDA altered its position. In the face of the preliminary injunction, Watson revised its guide and tape to render them “comparable, but not identical, to SmithKline’s.” Id. However, on November 23, 1999, the FDA rejected the revised user guide. The FDA “advised Watson that it would approve a revised version of Watson’s ‘previously approved labeling,’ ie., the virtually identical user’s guide previously approved by the FDA.” Id. To assist Watson, the FDA “marked up a copy of the previously approved user guide” and bracketed certain portions of text which could be in appropriate cases deleted or “substituted with new text .... similar to the original in tone, content and length.” Id. Nevertheless, the bracketed guide gave Watson “very little leeway to deviate from the previously approved user guide.” Id. In essence, therefore, the FDA “determined that Watson had to copy verbatim substantially all of the text used in the SmithKline” user’s guide. Id. at *4.

In December, representatives of the FDA attended a conference with the district court, at which time the court asked the FDA to “‘revisit’ the question of whether portions of Watson’s proposed user’s guide could be rewritten to change the text ‘a little bit’ to address the copyright concerns.” Id. On December 15, the FDA wrote the court and advised that it had “declinefd] to change its approach to Watson’s labeling” and that it could not address copyright concerns because it “ha[d] never been directed by Congress to consider potential copyright rights in approving generic drug labeling.” Id.

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211 F.3d 21, 54 U.S.P.Q. 2d (BNA) 1317, 2000 U.S. App. LEXIS 6200, 2000 WL 345704, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smithkline-beecham-consumer-healthcare-lp-v-watson-pharmaceuticals-ca2-2000.