Thursday, December 01, 2005

Copyright and the FDA: Unconstitutional takings?

I recently read Lawrence Cunningham’s Michigan Law Review article, Private Standards in Public Law: Copyright, Lawmaking and the Case of Accounting, 104 Mich. L. Rev. 291 (2005), which uses Veeck v. Southern Building Code Congress Int’l, Inc., 293 F.3d 791 (5th Cir. 2002) (en banc), to explore when privately created codes and standards adopted into law should be held to lose copyright protection, at least as against copiers who copy in order to comply with the law. It’s an interesting question; what I didn’t realize until I was preparing for my advertising law class was that a similar issue has come up with respect to the FDA, which doesn’t adopt drug labels as law but does sometimes require them to be copied.

In SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharmaceuticals, Inc.,
211 F.3d 21 (2d Cir. 2000), the defendants obtained approval from the FDA to sell a generic nicotine gum product that compteted with plaintiff’s Nicorette and were directed by the FDA to use labeling almost identical to the plaintiff's copyrighted guide and audio tape. SmithKline filed a copyright action, and the court found that its labeling was creative and that copying by a direct competitor would ordinarily support an injunction. In this case, however, the FDA reported to the court that its requirement of nearly identical labelling was consistent with the Hatch-Waxman Amendments to the Federal Food, Drug and Cosmetic Act, see Drug Price Competition and Patent Term Restoration Act of 1984 § 101, 21 U.S.C. § 355(j). The court accepted the FDA’s position and held that therefore the Copyright Act conflicted with Hatch-Waxman, and Hatch-Waxman controlled. Complying with both laws would have been possible, but only by entirely foregoing the production of generic drugs under Hatch-Waxman’s expedited approval process for generics, which Congress could not have intended. Also, though the court explicitly declined to rely on this, it’s plain that copyright is not needed as an incentive to produce drug labels (and that SmithKline’s concern was not to protect the commercial value of its copyright but the commercial value of its exclusive marketing rights for Nicorette).

Like Veeck, the case has not generated a substantial body of case law. It was later distinguished by FMC Corp. v. Control Solutions, Inc., 369 F. Supp. 2d 539 (E.D. Pa. 2005), on the ground that EPA regulations, unlike FDA regulations, do not require identical (or substantially similar) labels for me-too pesticides. Schwarz Pharma, Inc. v. Breckenridge Pharmaceutical, Inc., 388 F. Supp. 2d 967 (E.D. Wis. 2005), also distinguished SmithKline, on the grounds that the defendant’s copying of a prescription drug label was not undertaken pursuant to Hatch-Waxman; the court denied the defendant’s motion for summary judgment on the copyright claims absent further information about what, if anything, the FDA required for me-too labeling of generics more generally.

Only one law review article discusses SmithKline extensively (and unfavorably), John C. O'Quinn, Protecting Private Intellectual Property from Government Intrusion: Revisiting SmithKline and the Case for Just Compensation, 29 Pepp. L. Rev. 435 (2002). Given the case’s relevance to the question of when expressive works should be treated as unprotected facts, I think copyright minimalists like me should mention SmithKline more often. Alicia Ryan’s Contract, Copyright, and the Future of Digital Preservation, 10 B.U. J. Sci. & Tech. L. 152, 176 (2004), does mention SmithKline as support for other limited revocations of copyright rights – using the case to refute takings-type arguments, whereas O’Quinn thinks the case is a blatant instance of an uncompensated taking.

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