Novo Nordisk (NYSE:NVO) v. Caraco Pharm. Labs. et al. (Fed. Cir. 2010)
In the Medicare Modernization Act of 2003, Congress gave ANDA applicants who have been sued for patent infringement the statutory right to file a counterclaim seeking the delisting of the patent from the Orange Book:
If an owner of the patent or the holder of the [NDA] for the drug that is claimed by the patent or a use of which is claimed by the patent brings a patent infringement action against the [ANDA] applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder . . . on the ground that the patent does not claim either—(aa) the drug for which the application was approved; or (bb) an approved method of using the drug. 21 USC 355(j)(5)(C)(ii).
Pursuant to this provision, after Novo Nordisk sued Caraco (NYSEMKT:CPD) for infringement of U.S. Patent No. 6,677,358 based on Caraco’s paragraph IV certification, Caraco filed a counterclaim requesting an order directing Novo to change the Orange Book patent use code for the ‘358 patent, and thereby “correct the patent information” for the ‘358 patent.
Prandin (repaglinide) is FDA-approved for three uses: (1) repaglinide by itself (i.e., monotherapy); (2) repaglinide in combination with metformin; and (3) repaglinide in combination with thiazolidinediones. The ‘358 patent, which is the only patent listed in the Orange Book for Prandin, claims, “A method for treating non-insulin dependent diabetes mellitus (NIDDM) comprising administering to a patient in need of such treatment repaglinide in combination with metformin.” Accordingly, the original patent use code for Prandin was “Use of repaglinide in combination with metformin to lower blood glucose.”
Caraco’s ANDA contained a paragraph IV certification to the ‘358 patent and a section viii statement declaring that Caraco was not seeking approval for the repaglinide-metformin combination therapy. Because there was no overlap between Caraco’s proposed carve-out label and the repaglinide-metformin use code, FDA accepted the proposed label.
Thereafter, Novo changed the use code for the ‘358 patent to broaden it from the repaglinide-metformin combination therapy to “A method for improving glycemic control in adults with type 2 diabetes mellitus.” The new use code covered all three approved uses for Prandin, even though the ‘358 patent covered only one approved use. Caraco’s carve-out label now overlapped with the use code, and therefore FDA retracted its approval of Caraco’s proposed label and section viii statement. As a result, Caraco’s current label now includes the repaglinide-metformin combination therapy, which is stipulated to infringe claim 4 of the ‘358 patent. This prompted Caraco’s counterclaim seeking an order directing Novo to replace the new use code with the former listing.
On September 24, 2009, the U.S. District Court for the Eastern District of Michigan ruled (.pdf) that Caraco was entitled to the requested injunction. The court stated, “Novo, by the change in the use code narrative is attempting to extend the life of an expired patent”—namely, U.S. patent RE37,035, which broadly claims repaglinide. According to the court,
the clear legislative intent behind the 2003 amendments to Hatch-Waxman that added the counterclaim provision, section 355(j)(5)(C)(ii), [was] to curb Orange Book abuses arising from misinformation regarding listed patents.
The next day, the court issued an order (.pdf) granting the injunction sought by Caraco.
On Wednesday, in a 2–1 decision (.pdf) —over a 28–page dissent from Judge Dyk—the Federal Circuit reversed and vacated the injunction. The majority reasoned that the statutory language is clear on its face: “an approved method of using the drug” means “any approved method” (as Novo urged) rather than “all approved methods” (as Caraco argued). Further, according to the majority, its decision to vacate the injunction is consistent with the legislative intent: the counterclaim provision in the 2003 Act “sought to correct the specific issue raised in Mylan v. Thompson (Fed. Cir. 2002), i.e., to deter pioneering manufacturers from listing patents that were not related at all to the patented product or method.” In addition, the majority concluded that “the patent information” referred to in the counterclaim provision meant “the patent number and the expiration date”—not also the use code narrative.
In dissent, Judge Dyk expressed strong disagreement with the majority. He wrote:
In 2003, Congress enacted the counterclaim provision of the Hatch-Waxman Act in order to prevent manipulative practices by patent holders with respect to the Orange Book listings. These practices were designed to delay the onset of competition from generic drug manufacturers. In my view, the majority, in reversing the district court, now construes the statute contrary to its manifest purpose and allows the same manipulative practices to continue in the context of method patents.
Judge Clevenger, in a short concurring opinion, stated that, in his view, “Novo did nothing that was illegal or forbidden.” He acknowledged that FDA “may have inadvertently upset the careful balance of interests represented by the efficient dispute resolution mechanism Congress created in the Hatch-Waxman Act.” But, he concluded,
Congress is the appropriate entity to readjust, if necessary, the delicate balance it has struck between original drug manufacturers and their generic counterparts.
Caraco and Novo Nordisk have not yet commented on the Federal Circuit’s decision. It will be interesting to see whether Congress will address the issue presented by this case.