## Facts

- SmithKline manufactured Nicorette nicotine gum and held copyrights in Nicorette’s OTC user’s guide and accompanying audiotape used as FDA-required labeling materials.
- Under the Hatch–Waxman Amendments, an ANDA applicant generally must use labeling that is the “same as” the pioneer drug’s labeling.
- Watson sought FDA approval to market a generic nicotine gum and submitted labeling closely tracking Nicorette’s materials.
- SmithKline sued for copyright infringement and obtained a preliminary injunction barring Watson from distributing its product with the challenged labeling.
- Watson attempted to revise its materials to be comparable but not identical; the FDA rejected the revisions and insisted Watson’s labeling be nearly verbatim to satisfy “same labeling.”
- After the FDA’s position effectively required near-verbatim copying, the district court dissolved the preliminary injunction, citing hardship to Watson and the public interest in access to generic drugs.
- SmithKline appealed the dissolution order.

## Issues

1. Whether Hatch–Waxman’s “same labeling” requirement can mandate generic drug labeling that would otherwise infringe the pioneer’s copyrighted labeling materials.
2. Whether copyright liability may attach when the FDA requires near-verbatim copying as a condition of ANDA approval.
3. Whether the district court abused its discretion by dissolving the preliminary injunction in light of the FDA’s requirement and the resulting balance of hardships.

## Decision

- The Second Circuit affirmed the order dissolving the preliminary injunction.
- The court held that Hatch–Waxman requires generic drug sellers to use labeling that may infringe a copyright in the pioneer’s label.
- Because the copying was required by the federal regulatory scheme, copyright liability could not attach to Watson’s use of the FDA-required labeling.
- The court agreed that continuing the injunction would effectively bar marketing an FDA-approved generic and would conflict with the public interest in generic availability.

## Legal Principles

- Where federal drug law and FDA regulation require an ANDA applicant to use labeling that is substantially the same as the pioneer’s labeling, that compelled copying cannot be the basis for copyright liability.
- Copyright remedies may not be applied in a manner that would frustrate Congress’s design in Hatch–Waxman to facilitate timely generic entry and consistent safety labeling.
- In preliminary-injunction analysis, a material change in regulatory requirements affecting the defendant’s ability to comply with both federal law and an injunction may justify dissolving the injunction based on hardship and public interest.

## Conclusion

The Second Circuit concluded that Hatch–Waxman’s “same labeling” regime can require near-verbatim use of pioneer labeling materials and that, when the FDA compels such copying, copyright liability does not apply; the dissolution of the preliminary injunction was therefore affirmed.


SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharmaceuticals, Inc., 211 F.3d 21 (2d Cir. 2000)