October Term, 2011
April 17, 2012
Today the Supreme Court issued one decision, described below, of interest to the business community.
Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, No. 10-844 (previously discussed in the June 27, 2011 Docket Report).
The FDA is authorized to approve generic drugs only if they do not infringe the patent of a brand manufacturer. For drugs that are covered by unexpired patents, the Hatch-Waxman Amendments permit generic manufacturers to show that a proposed generic drug will not infringe the patent. One method of doing that, a “section viii statement,” asserts that the generic drug will be marketed only for uses that the patent does not cover. In evaluating section viii statements, the FDA relies on “use codes” submitted by the patent holder. Today, in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, No. 10-844, the Supreme Court held that a generic manufacturer may file a statutory counterclaim to force a patent holder to correct use codes that inaccurately describe the patent as covering a particular use.
The FDA approved three uses of the diabetes drug repaglinide. Novo Nordisk, a respondent in the Supreme Court, held a patent, since expired, on the repaglinide chemical compound. It still holds a method-of-use patent on one of the three approved uses. Caraco, a petitioner in the Supreme Court, filed a “paragraph IV certification,” another method of showing non-infringement under the Hatch-Waxman Amendments, which asserted that the patent was invalid or will not be infringed. Caraco later submitted a section viii statement, together with a proposed label that carved out the use described in the patent. Novo Nordisk then amended its use code to cover the other FDA-approved uses, leading the FDA to deny Caraco’s application.
Novo Nordisk had also responded to the paragraph IV certification, which is an act of constructive patent infringement, by filing an infringement suit. Following the use-code amendment, Caraco counterclaimed under 21 U.S.C. § 355(j)(5)(C)(ii)(I) to force Novo Nordisk to correct the use codes, which Caraco argued were not claimed by the patent. That statutory provision states that a generic manufacturer “may assert a counterclaim seeking an order requiring the [brand manufacturer] to correct or delete the patent information [it] submitted . . . under [two statutory subsections] on the ground that the patent does not claim . . . an approved method of using the drug.”
The district court granted summary judgment to Caraco and issued an injunction requiring Novo Nordisk to correct the codes. A divided panel of the Federal Circuit reversed, on two alternative grounds. It held that the statutory counterclaim is available only when the patent does not claim any FDA-approved method of use, not when it merely does not cover a particular use, and that the counterclaim provision in any event does not reach use codes, because they are not “patent information” submitted under the relevant statutory subsections.
In an opinion by Justice Kagan, the Supreme Court unanimously reversed. The Court first rejected Novo Nordisk’s contention that “not . . . an” in the statute means “not any.” It agreed with Caraco that the phrase instead means “not a particular one,” such that the statute permits a counterclaim whenever the patent does not claim a method of use for which the generic manufacturer seeks to market the drug. The Court also rejected Novo Nordisk’s contention that a counterclaim is not a proper mechanism for forcing correction of use codes because they are not “patent information” that is “submitted . . . under” the relevant statutory subsections. The Court agreed with Caraco that a use code satisfies the ordinary meaning of “patent information” and that “submitted under” should be read broadly to cover filings required, not only by the statutory subsections themselves, but also by their implementing regulations.
Justice Sotomayor wrote a concurring opinion, which highlighted the inefficiencies in the statutory scheme for correcting use codes through litigation and urged the FDA to clarify what is expected of brand manufacturers submitting the codes.
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