April 17, 2012

Supreme Court Decides Brand-Name-Drug "Use Code" Case: Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

On April 17, 2012, the U.S. Supreme Court decided Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, No. 10-844, holding that generic-drug manufacturers may use the counterclaim provision of 21 U.S.C. § 355(j) to require a brand-name-drug manufacturer to correct a use code that inaccurately describes the brand-name drug's patent as covering a particular method of using a drug.

Federal law requires the brand-name drug maker to submit as part of its application for marketing the number and expiration date of any patent that claims the drug or a method of using the drug. Once the marketing application is approved, the brand-name manufacturer provides a description of any method-of-use patent that it holds. That description is known as a "use code," and it is published (along with other use codes) in a publication called the "Orange Book." The Food and Drug Administration (FDA) will not try to determine whether a use code supplied by a brand-name manufacturer is accurate or not; the agency accepts the use code at face value. 

Once the FDA has approved a brand-name drug for marketing, other manufacturers may seek permission to market a generic version of the same drug. Federal law allows the generic-drug manufacturer to obtain that approval through a regulatory filing that is more abbreviated than the filing required to obtain approval to market the original brand-name drug. The FDA cannot authorize a generic drug that would infringe a brand-name manufacturer's patent, and will not approve a generic drug if the generic's proposed use will overlap at all with a brand-name drug's use code.  If a generic-drug manufacturer finds from the Orange Book that its proposed label overlaps with a brand-name drug's use code, federal law allows it to file a certification stating that the listed patent is invalid or will not be infringed by the generic drug. But filing such a certification provokes litigation, as the patent statute treats the filing in and of itself as an action of infringement, giving the patent holder the right to sue.

Should the patent holder commence such action, 21 U.S.C. § 355(j)(5)(C)(ii)(I) permits the generic manufacturer to challenge patent information that the brand-name manufacturer has submitted to the FDA. This challenge takes the form of a counterclaim that asks the court to order the brand-name manufacturer to "correct or delete the patent information submitted by the [brand-name manufacturer] under subsection (b) or (c) of [21 U.S.C. § 355] on the ground that the patent does not claim either" the drug for which the brand-name's application was approved, or an approved method of using the drug. The question in this case was whether such a counterclaim is available to fix a brand-name manufacturer's use code.

The Supreme Court held that the counterclaim is available to fix a use code. The Court rejected the brand-name manufacturer's argument (which the Federal Circuit had adopted) that the phrase "on the ground that the patent does not claim . . . an approved method of using the drug" means that the counterclaim was available only if the listed patent did not claim any approved method of using the drug. The Court held that, in context, the statute contemplates that one patented use of a drug will not foreclose a competitor from marketing a generic drug for other  non-patented uses, meaning that the counterclaim functions to challenge the brand manufacturer's assertion of rights over the specific use(s) that the generic company wishes to pursue. The Court also rejected the argument that use codes are not "patent information submitted by the [brand-name manufacturer] under subsection (b) or (c)" of Section 355. Under federal regulations, a use code describes the method of use claimed in a patent, and therefore must constitute "patent information." The information is "submitted under" Section 355 because it is required by regulations that implement Section 355.

Justice Kagan delivered the unanimous opinion of the Court. Justice Sotomayor filed a concurring opinion.

Download Opinion of the Court

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