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The U.S. Supreme Court’s 2014 decision in Limelight Networks v. Akamai Technologies decision (Akamai III), in conjunction with the Federal Circuit’s stance on divided infringement claims, effectively undermined the value of method claims, particularly in the realm of pharmaceuticals, diagnostics, and other biotechnology related innovation, by limiting the ability of patentees to establish liability in cases where steps of the claimed method are performed by multiple parties. On remand, the en banc Federal Circuit in Akamai Technologies v. Limelight Networks (Akamai IV) sought to address the problem by expanding the definition of direct infringement under 271(a) to encompass more scenarios in which method steps performed by multiple actors can be attributed to a single entity. In January 2017, the Federal Circuit issued a decision in Eli Lilly & Co. v. Teva Parenteral Medicines (Eli Lilly) wherein the court applied Akamai IV to uphold a district court’s determination that sale of a generic version of pemetrexed would induce infringement of method of treatment claims even though two of the recited steps are performed by a physician while the third step is performed by the patient. Although Eli Lilly is an encouraging decision for pharmaceutical and biotechnology firms, that the decision hinged on the specific facts of the case, including the language of the patent claims and the instructions on FDA-mandated labeling for the proposed generic versions of pemetrexed. In this Report, I review the Federal Circuit’s decision in Eli Lilly, pointing out factors that seemed relevant to the court’s finding of infringement. I also discuss potential alternate scenarios involving divided infringement where it is still unclear whether the Federal Circuit would find liability. Finally, I discuss two alternative theories of liability that were put forward by Eli Lilly but which the court declined to address as moot.

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Biotechnology Law Report