Skinny labels: why carving out the patented indication reduces the risk but does not remove it

The problem the label cannot solve

A second-medical-use patent protects a known medicine for a new use. Once the compound is free, a generic or biosimilar can be authorised for the old uses with the patented one left off its label, a “carve-out” or “skinny label”. The difficulty is that the product that reaches the patient is identical whatever the label says. Doctors prescribe and hospitals dispense by substance, not brand; pharmacy substitution rules in many countries require the cheapest version to be dispensed; and hospital and insurer tenders are let by substance for every use at once. So a carved-out product is used for the patented indication, everyone in the chain knows it will be, and the patentee’s claim is that the supplier is liable for that use. Four jurisdictions have answered in four ways.

United Kingdom: pregabalin

Pfizer’s compound patent for pregabalin (Lyrica) expired in 2013; a second patent claimed pregabalin for pain, and ran to 2017. Generics were authorised for epilepsy and anxiety only. In January 2015 the Patents Court refused Pfizer an interim injunction against Actavis, holding that a carve-out generic infringes only if it intends its product to be used for pain. Because prescriptions are written by substance, the court then did something unusual: on 26 February 2015 it ordered NHS England to tell prescribers to write “Lyrica” by brand for pain, with Pfizer’s cross-undertaking to the NHS behind the order, after finding the generics’ letters to prescribers and pharmacists “not sufficiently effective”. Pfizer’s own letters to pharmacies were later held to be unjustified threats.

At trial in September 2015 the pain claims were held invalid for insufficiency and, in any case, not infringed. The Court of Appeal in 2016 agreed the claims were invalid but took a wider view of infringement: a manufacturer is taken to intend what it can reasonably foresee, and leaving the indication off the label does not by itself negate that intention, though taking “all reasonable steps within his power” to prevent the use would. The Supreme Court on 14 November 2018 held the pain claims invalid by a majority and, unanimously, that the generics had not infringed even if they were valid; but the five judges split three ways on why. Two held that the only question is how the product is presented as it leaves the factory, label and leaflet included, which is the most label-friendly test in Europe; two preferred the trial judge’s test of intention; one sat between. All of it is obiter, because the patent was invalid. The generics’ and the NHS’s claims for what the brand-prescribing order cost them ran for years afterwards; the NHS in England settled in 2022, and the outcome for the remaining claimants had not been reported by October 2026.

The lesson: the carve-out generics won, and the patent fell, but it took a court-ordered change to national prescribing practice, three rounds of appeal, and the UK’s most label-friendly test, which carried only two of five judges.

Netherlands: zoledronic acid, and the test that followed

Sun launched a generic of Novartis’s zoledronic acid infusion with the osteoporosis indication carved out, Paget’s disease being the only remaining use, and then won an insurer’s tender that did not allow bids by indication and made Sun’s product the preferred one for every patient. Some 97% of use was for osteoporosis. The Hague Court of Appeal held in January 2015 that Sun was indirectly infringing: it knew its product would be used for the patented indication, its only measure had been an email to wholesalers headed as a “formality”, and it should have asked the insurer to split the tender. The Supreme Court upheld that in April 2017, and the District Court found direct infringement on the merits the same month, calling Sun’s later letter “too little, too late”. In November 2017 the Supreme Court stated the general Dutch test in a ribavirin case: a supplier infringes a use claim if it foresees, or should foresee, that its product will deliberately be used for the patented indication; a carve-out in the label “is in general not sufficient” to exclude infringement; the supplier must take every effective measure that can reasonably be required of it. A separate Dutch reference produced the Court of Justice’s 2019 ruling that a carve-out limits the generic’s authorisation and the regulator may not publish the full label.

The lesson: the opposite of the UK: the label is the starting point, and winning an indication-blind tender without trying to change it is the act that infringes.

Germany: rebate contracts and the measures the court prescribes

German pharmacies must substitute by substance under health-insurer rebate contracts. In April 2015 the Hamburg Regional Court held that a generic company which joined an insurer’s open rebate contract for pregabalin without excluding the pain indication was indirectly infringing; generics had to write the exclusion into their contracts, and a procurement court later held that an insurer tendering pregabalin without separating the patented indication was acting unlawfully. The Düsseldorf Higher Regional Court’s fulvestrant decisions of 2017 and 2019 set the general rule: a supplier that has not itself prepared the product for the patented use can still be liable where the product is suitable for it and the supplier exploits circumstances that ensure the patented use occurs to a more than isolated extent, knowingly or with wilful blindness; in that case, palliative use of under about 7% was not enough. In December 2024 the Munich Regional Court went further on a nilotinib use patent: a price-list entry plus statutory substitution plus known prescribing practice was imminent infringement, and the court enjoined the generic unless it stayed out of rebate contracts lacking an express exclusion, placed warnings in pharmacy and prescribing software, bound its wholesalers to carry the warnings, and wrote to specialists every six months until expiry. The appeal had not been reported.

The lesson: in Germany the carve-out is the beginning of a list of things the supplier must do, and the court will write the list.

France, Denmark and the UPC

The Paris court refused Pfizer injunctions against pregabalin generics in 2015 and 2016 because they had carved out the indication and written to tens of thousands of doctors and pharmacists; what prescribers and pharmacists then did was not the manufacturer’s act. In Denmark in 2015 the court acquitted the generic, which had already written to every pharmacy, doctor and wholesaler, and instead enjoined the pharmacies from dispensing it for pain despite the substitution rules.

The Unified Patent Court’s first ruling, in May 2025, drew the threads together. Infringement of a use claim needs an objective element, offering or marketing the product in a way that leads or may lead to the patented use, and a subjective one, that the seller knew or should have known it would; the court weighs how much of the market is the patented use, local prescribing custom, and what the seller did to encourage or to prevent it. The label and leaflet matter but are not always decisive. On those facts Amgen was not liable, because its label said nothing about the use and nobody prescribed for it.

Timeline

Date	Event
2013	Pregabalin compound patent expires in the UK; pain patent runs to 2017
27 January 2015	Hague Court of Appeal: Sun’s carve-out zoledronic acid indirectly infringes through the tender
26 February 2015	Patents Court orders NHS England to direct brand prescribing of Lyrica for pain
2 April 2015	Hamburg: joining a rebate contract without excluding the pain indication infringes
2015–16	Paris refuses injunctions against carve-out generics that had written to prescribers
13 October 2016	Court of Appeal: foreseeability, offset by all reasonable steps
14 April and 3 November 2017	Dutch Supreme Court: Sun’s appeal dismissed; the general Dutch test stated in MSD v Teva
14 November 2018	UK Supreme Court: patent invalid; no infringement; “outward presentation” test from two judges
9 January 2019	Düsseldorf: liability without preparation where the patented use is more than isolated
4 December 2024	Munich prescribes the measures a nilotinib generic must take
13 May 2025	UPC: the knowledge-plus-conduct test; Amgen not liable

What it means if you are…

A generics or biosimilar planner. The carve-out is step one. Step two depends on the country: in the UK, a clean label and no promotion for the use is close to enough on the Supreme Court’s majority view, though that view is obiter and was not unanimous; in the Netherlands and Germany you must also stay out of, or split, any tender or rebate contract that covers the patented use, warn wholesalers, pharmacies and prescribers, and keep doing so; at the UPC, be able to show what you did. For a biologic bought through hospital tenders by substance, the tender is the exposure: a bid that covers every use is the Dutch zoledronic acid fact pattern, and a biosimilar’s label will not save it.

A parallel trader. Not your dispute unless you move a carved-out generic, in which case the destination country’s test applies to you as a supplier. Moving the originator’s own product is unaffected.

A hospital buyer or tender authority. The German procurement court’s view, that tendering a substance without separating a patented indication facilitates infringement, is the one to design around: lots by indication, or a tender that says the patented use is excluded. The Dutch insurer’s refusal to allow indication-limited bids is what produced the judgments against Sun.

Status and what to watch

The EU pharmaceutical package’s Directive text of March 2026 widens the carve-out: a generic or biosimilar may ask to omit not only indications but posologies, forms, routes and “any other way in which the medicinal product may be used” that are still covered by a patent or SPC, and its Bolar provision lets a generic submit a tender bid during the protection period provided it does not sell. Neither changes the infringement tests above; they change what the label may leave out and when a bid may be made. Still open: the UK damages inquiry’s final outcome, the Munich appeal, and any UPC Court of Appeal ruling on the 2025 test.