Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

PETITIONER: Caraco Pharmaceutical Laboratories, Ltd., et al.
RESPONDENT: Novo Nordisk A/S, et al.
LOCATION: Novo Nordisk U.S. Headquarters

DOCKET NO.: 10-844
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Federal Circuit

CITATION: 566 US (2012)
GRANTED: Jun 27, 2011
ARGUED: Dec 05, 2011
DECIDED: Apr 17, 2012

ADVOCATES:
Benjamin J. Horwich - Assistant to the Solicitor General, Department of Justice, as amicus curiae, supporting the petitioners
James F. Hurst - for the petitioners
Mark A. Perry - for the respondents

Facts of the case

Novo Nordisk sued Caraco Pharmaceutical Laboratories and Sun Pharmaceutical Industries Ltd. for infringement in the wake of Caraco filing an abbreviated new drug application ("ANDA") for a generic version of the Type 2 diabetes drug Prandin. Caraco and Sun promptly countersued. While the litigation was pending, Novo changed the FDA Orange Book's use code — a description of the scope of the patent —undermining Caraco's argument that patent did not apply to the purpose for which the generic product would be marketed. Caraco filed a counterclaim requesting an order that would require Novo Nordisk to change back the use code.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 authorized ANDA applicants to assert a counterclaim seeking an order requiring the brand to correct or delete submitted patent information on the grounds that the patent does not claim 1) the drug for which the brand's new drug application was approved or 2) an approved method of using the drug.

The U.S. District Court for the Eastern District of Michigan granted the counterclaim and issued an injunction ordering Novo Nordisk to change the code. Novo appealed to the United States Court of Appeals for the Federal Circuit, arguing that the district court had abused its discretion. The Federal Circuit ruled in favor of Novo, holding that Caraco could only assert a counterclaim if Novo's patent did not claim any approved method of use.

Question

(1) Does the counterclaim provision of the Hatch-Waxman Act only apply if Novo's Prandin patent does not claim any approved method of use?

(2) Does Novo's use code for Prandin qualify as "patent information submitted under subsections (b) and (c)" for the purposes of the act?

Media for Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

Audio Transcription for Oral Argument - December 05, 2011 in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

Audio Transcription for Opinion Announcement - April 17, 2012 in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

John G. Roberts, Jr.:

Justice Kagan has our opinion this morning in case 10-844, Caraco Pharmaceutical Laboratories versus Novo Nordisk.

Elena Kagan:

In this case, we consider the scope of a statute authorizing a generic drug manufacturer to bring a counterclaim against a branch named manufacturer in patent litigation.

Now, to understand anything about the statute, you need to know a little bit about how the Food and Drug Administration, the FDA, approves the marketing of prescription drugs, both brand name and generic.

When the manufacturer seeks to market a new drug, it must submit an application to the FDA, showing that the drug is safe and effective.

In this case, a company called Novo submitted an application for a diabetes drug called Prandin, which is the brand name for a drug compound called Repaglinide and the FDA approved that application for three distinct methods of using the drug.

Once a new drug is approved in this way, other companies may seek approval from the FDA to market a generic version which will be cheaper for consumers, but the FDA cannot approve a generic drug if it would infringe the brand manufacturer's patents.

So, the FDA requires the brand manufacturer to provide it with information about what patents it holds and in particular, when a brand manufacturer holds a patent on a particular method of using a drug, it has to submit a description of that patent, which is known and this is important to determine this opinion as a use code.

Now, for better or worse, the FDA doesn't actually check whether the use code is accurate.

The agency simply assumes that it is and makes decisions about whether to approve generic drugs on that basis.

Okay now, when a generic manufacturer applies to the FDA, it checks the brand manufacturer's use codes, which are published in something called the Orange Book and then it tries to assure the FDA that its drug will not infringe the brand's patents.

You can do this in a few ways, one of which is by what's called a Section 8 statement which certifies that the generic drug will be marketed only from methods of use that are not covered by the brand manufacturer's patents.

Here, the generic manufacturer is a company called Caraco, which wants to market a generic version of Repaglinide.

Caraco thought that it could file a Section 8 statement because the FDA had approved Repaglinide for three methods of use, but Novo, the brand manufacturer holds a patent on only one of them and Caraco wanted to sell its drug, its generic version, only for the other two.

So, Caraco filed a Section 8 statement in the hopes of getting FDA approval, but here's the problem.

Novo's use code, its description of its own patent was overbroad.

It inaccurately claimed that the company held a patent on all three approved uses of Repaglinide and because that's what the use code said, and as I told you before, the FDA doesn't check its accuracy, because that's what the use code said, the FDA could not approve Caraco's application based on a Section 8 statement.

The only thing left for Caraco to do under the statute was to file a different kind of statement which the law -- which the law treats as itself an act of patent infringement entitling the brand manufacturer to sue the generic company and that's what Novo did and now finally, we get to the question in this case.

Once having been sued by Novo, could Caraco bring a counterclaim to force Novo to correct its use code?

That's important because if the use code is corrected, Caraco could re-file its Section 8 statement.

The FDA would approve it and then Caraco could market its generic drug.

Now, there's a statute that specifies when a generic manufacturer can bring a counterclaim against a brand manufacturer in patent litigation.

The statute allows a counterclaim and I'm going to quote now, it's kind of a mouthful, “When the generic company seeks an order, requiring the brand manufacturer to correct or delete the patent information submitted by the brand manufacturer under two particular statutory provisions on the ground that the patents does not claim an approved method of using the drug.”

So, what we had to do in this case was to decide whether this statutory language entitles a generic manufacturer like Caraco to use the counterclaim method to seek correction of a brand manufacturer's use code.

We hold today that the statutory language does allow such a counterclaim.

Caraco can bring a claim against Novo to force Novo to narrow its use code so that the FDA can approve Caraco's generic product.

Our opinion focuses on two phrases in the statute.

First, the statute says that a generic may bring a counterclaim when the patent does not claim an approved method of using the drug.

Now, Novo would have us read that provision to require the generic company to show that the patent does not claim any approved method of using the drug and if that's -- if that's right, then Novo was in the clear because its patent does claim one approved method of use.

By contrast, Caraco says, “All it has to prove is that the patent does not claim a particular method of use, the one for which it seeks to market its product,” and if that's so, Caraco wins, because Novo's patent does not in fact claim two other approved methods of use, the methods of use that Caraco seeks to market its product for.

We think this is a pretty interesting question as a grammatical matter and the opinion has a bit of fun with it, but in the end, we say that the context of this statute shows that Caraco is right.