Novo Nordisk v. Caraco

January 12, 2011 – Blog Post

Caraco Pharmaceutical and Sun Pharmaceutical recently petitioned the Supreme Court for a writ of certiorari in their case against Novo Nordisk regarding availability of an Orange Book correction counterclaim to an infringement action.  The Federal Circuit decided in April 2010 that Caraco did not have a basis for its counterclaims under 21 U.S.C. § 355 (j)(5)(C)(ii).  Caraco petitioned for rehearing en banc and the Federal Circuit denied the petition in July.

Caraco filed an ANDA for the drug repaglinide, providing a Paragraph IV certification with respect to one of Novo’s  patents, at issue here.  Novo then brought an infringement suit against Caraco, and Caraco counterclaimed, alleging impropriety in parts of Novo’s Orange Book listing.  The parties agree that the asserted patent covers only one of the three uses currently approved by the FDA.  The parties dispute whether Caraco has a valid counterclaim arising from its allegations that the patent does not claim every one of the approved uses of the drug, as listed in the Orange Book.  The parties also dispute whether allegations of improper Orange Book listings of usage information can be grounds for such a counterclaim, or whether these counterclaims are limited to problems with the Orange Book listings of patent numbers or patent expiration dates.

In a 2001 decision, the Federal Circuit ruled that, though the Hatch-Waxman Act established an infringement action for filing an ANDA with a Paragraph IV certification, the Act did not establish any defense to this type of infringement for patents listed improperly in the Orange Book. Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323, 1331 (Fed. Cir. 2002).  Congress responded to this ruling in 2003 by enacting a statutory provision establishing a counterclaim for an ANDA applicant with a Paragraph IV certification regarding an allegedly improper Orange Book listing.  The statute states in relevant part that

the [ANDA] applicant may assert a counterclaim seeking an order requiring the [NDA] holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) on the ground that the patent does not claim . . . an approved method of using the drug.

21 U.S.C. § 355 (j)(5)(C)(ii)(I).

Chief Judge Rader, writing the Federal Circuit panel decision in Caraco, found that grammatically, the phrasing of the provision and the use of a negative and an indefinite article before “approved method” means that the counterclaim applies where a patent does not claim any approved method at all, not where a patent claims some approved methods and not others.  Additionally, although the court found the statutory language unambiguous, it also looked to the legislative history of the statute.  The court found that in Mylan, the ANDA applicant alleged that the Orange Book-listed patent was irrelevant to the listed drug.  In its Caraco ruling, the court found that Congress amended the statute to establish a remedy specifically in cases where patents “were not related at all” to the listed drug, but that the patent in this case was related to the listed drug because it covered one of its approved uses.

The Federal Circuit panel’s opinion also looked to subsections (b) and (c) of § 355 and ruled that the “patent information” that a defendant may challenge in a counterclaim is limited to the patent number and the expiration date.  The court pointed to language in subsection (b) that refers to patent numbers and expiration dates and to language in subsection (c) that refers to “the patent information described in subsection (b).”  The court found that this view of the statutory language, not FDA regulation preceding the establishment of the counterclaim or legislative history, limited and defined the meaning of “patent information submitted by the holder under subsection (b) or (c).”

Judge Dyk’s dissent from the Federal Circuit panel opinion and Judge Gajarsa’s dissent from the denial of the petition for rehearing en banc also recounted Mylan and the history of the provision overruling it.  Judge Dyk argued that, in overruling Mylan, Congress did not intend to narrowly provide an opportunity to correct improper Orange Book listings only where the patent did not belong in the Orange Book at all, but also provided a mechanism for correcting the Orange Book where it may erroneously list a patent as covering more than it should.  Judge Gajarsa likewise argued that the panel opinion construed the statute against Congress’s purposes in overruling Mylan.  Judge Dyk’s dissent argued that this broader interpretation of the counterclaim scope receives support from proper grammatical analysis of the statute as well as understanding of the structure of the Orange Book in associating particular patents with approved drugs or methods of use.

The dissent further noted that the statute did not explicitly define “patent information” and that proper construction of the statute would include within “patent information” information that describes the scope of the patent and its relation to the drug or methods of use, i.e. all Orange Book information.  Furthermore, the dissent argued, even if the statute were ambiguous, the court should give deference to the FDA’s inclusion of use information as a part of the “patent information” it requires and has required since before the 2003 amendment.

In its petition for a writ of certiorari before the Supreme Court, Caraco argued that the Federal Circuit’s ruling leaves ANDA applicants vulnerable to infringement actions based on improper Orange Book listings.  It notes that suing the FDA would likely be ineffective, as the FDA does not substantively review patent issues.  Caraco then argued that proper deference to the FDA would support its construction of “patent information” and that the Federal Circuit decision is in tension with D.C. Circuit rulings on Hatch-Waxman matters.  The petition to the Supreme Court ends with an argument largely similar to Judge Dyk’s and Judge Gajarsa’s arguments against the Federal Circuit panel’s reasoning behind its interpretation of the statute.

If the Supreme Court decides to grant this case a writ of certiorari, its ruling could greatly affect the breadth of the § 355 (j)(5)(C)(ii)(I) counterclaim against an NDA holder with a challengeable Orange Book listing.  A denial to grant a writ of certiorari or a ruling upholding the Federal Circuit would expose Paragraph IV ANDA applicants to infringement suits based on Orange Book drug usage listings with potentially improper usage information.  Such exposure without the potential for effective counterclaims could deter ANDA applicants from getting their products on the market.  In such a scenario, ANDA applicants might also hesitate to challenge Orange Book listings or the validity of the underlying patents.