Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/s
566 U.S. 399, 182 L. Ed. 2d 678, 2012 U.S. LEXIS 3106 (2012)
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Rule of Law:
Under 21 U.S.C. § 355(j)(5)(C)(ii)(I), a generic drug manufacturer sued for patent infringement may assert a counterclaim seeking to compel a brand-name manufacturer to correct an inaccurate 'use code' that overstates the scope of a patent, even if the patent validly covers at least one approved method of using the drug.
Facts:
- Novo Nordisk (Novo) manufactured Prandin, a brand-name diabetes drug (repaglinide), which the FDA had approved for three distinct methods of use: alone, in combination with metformin, and in combination with thiazolidinediones (TZDs).
- Novo's patent on the repaglinide compound itself was set to expire, but it held a separate method-of-use patent (the '358 patent) that claimed only one of the three approved uses: the use of repaglinide in combination with metformin.
- Caraco Pharmaceutical Laboratories (Caraco) sought to market a generic version of repaglinide for the two unpatented uses: alone and in combination with TZDs.
- Initially, Novo's 'use code' submitted to the FDA accurately described the '358 patent as covering only the use with metformin.
- After Caraco began the process to market its generic for the two non-patented uses, Novo changed its use code to a much broader description: 'A method for improving glycemic control in adults with type 2 diabetes.'
- This new, overbroad use code inaccurately suggested that the '358 patent covered all three approved uses of the drug, which had the effect of blocking the FDA from approving Caraco's generic drug application for the two non-infringing uses.
Procedural Posture:
- Caraco filed an Abbreviated New Drug Application (ANDA) with the FDA, which included a paragraph IV certification for Novo's '358 patent.
- Pursuant to the Hatch-Waxman Act, Novo sued Caraco for patent infringement in the U.S. District Court for the Eastern District of Michigan (trial court).
- After Novo amended its use code to be overbroad, Caraco filed a counterclaim in the infringement suit, seeking an order requiring Novo to correct its inaccurate use code.
- The District Court granted summary judgment to Caraco on the counterclaim.
- Novo, as appellant, appealed the decision to the U.S. Court of Appeals for the Federal Circuit.
- The Court of Appeals reversed, holding that the statutory counterclaim was not available to challenge the accuracy of a use code.
- Caraco, as petitioner, successfully petitioned the U.S. Supreme Court for a writ of certiorari.
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Issue:
Does 21 U.S.C. § 355(j)(5)(C)(ii)(I) authorize a generic drug manufacturer to file a counterclaim to force the correction of a brand-name manufacturer's inaccurate 'use code' that overstates the scope of a patent, even if the patent does cover at least one approved method of using the drug?
Opinions:
Majority - Justice Kagan
Yes, 21 U.S.C. § 355(j)(5)(C)(ii)(I) authorizes a generic drug manufacturer to file a counterclaim to force the correction of an inaccurate use code that overstates a patent's scope. The counterclaim is available when a patent 'does not claim ... an approved method of using the drug,' which, in the context of the Hatch-Waxman Act, refers to a particular method of use the generic company wishes to pursue, not the absence of any patented use whatsoever. The statutory phrase 'patent information submitted... under subsection (b) or (c)' is broad enough to include use codes, which are submitted pursuant to the FDA's regulatory scheme implementing those subsections. Finally, the statute's provision of a remedy to 'correct or delete' patent information supports this interpretation; allowing correction for overbroad use codes gives meaning to the word 'correct,' whereas Novo's interpretation would render it superfluous, as the only remedy for a completely invalid patent listing would be to 'delete' it.
Concurring - Justice Sotomayor
Yes, the counterclaim is the most sensible reading of the statute, but it is an imperfect solution. Even with this remedy, the generic manufacturer must endure expensive and time-consuming litigation to correct an overbroad use code, which subverts the statutory goal of speedy generic drug approval. The process requires the generic to file a paragraph IV certification, get sued by the brand, litigate the counterclaim, and only then return to the FDA with a corrected use code. This problem originates with the FDA's 'remarkably opaque' guidance on what use codes must contain, and a more effective solution would require clearer regulations from the FDA or new legislation from Congress.
Analysis:
This decision significantly empowers generic drug manufacturers by providing a direct statutory tool to combat anticompetitive behavior by brand-name manufacturers. It clarifies that the counterclaim mechanism in the Hatch-Waxman Amendments is not just for delisting entirely irrelevant patents, but also for correcting overbroad descriptions of valid patents. By preventing brands from using inaccurate 'use codes' to improperly extend their monopolies over unpatented methods of use, the ruling reinforces the Act's core purpose of facilitating the timely market entry of lower-cost generic drugs, which can impact drug prices and competition.
