U.S. Supreme Court Petitioned to Review Federal Circuit Patent Use Code Decision

December 28, 2010

By Kurt R. Karst –      

Another week, another Petition for Writ of Certiorari filed with the U.S. Supreme Court on an issue involving the drug industry.  The latest petition comes from Caraco Pharmaceutical Laboratories, Ltd. (“Caraco”) and Sun Pharmaceutical Laboratories, Ltd. (“Sun”) and requests the Court’s review of an April 14, 2010 decision from the Federal Circuit in Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd., 601 F.3d 1359 (Fed. Cir. 2010), which addressed whether the patent delisting counterclaim provisions at FDC Act §505(j)(5)(C)(ii)(I), as added by the Medicare Modernization Act, may be used to correct or delete an Orange Book-listed Patent Use Code (“PUC”).

FDC Act §505(j)(5)(C)(ii)(I) states:

If an owner of the patent or the holder of the approved application under [FDC Act § 505(b)] 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 applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under [FDC Act § 505(b)] or (c) 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.

As we previously reported (here, here, and here), in 2009, the U.S. District Court for the Eastern District of Michigan (Southern Division) ruled and issued an Order and Injunction requiring Novo Nordisk, Inc. (“Novo”) to change an Orange Book-listed PUC for a patent – U.S. Patent No. 6,677,358 (“the ’358 patent”) – on its drug product, PRANDIN (repaglinide) Tablets, as a result of Caraco’s FDC Act §505(j)(5)(C)(ii)(I) counterclaim.  Novo appealed and the Federal Circuit reversed and vacated the district court’s judgment in a 2-1 decision.  The Federal Circuit ruled that Caraco “does not have a statutory basis to assert a counterclaim requesting” a court to enter an order to replace Novo’s new PUC with the former PUC.  (See our previous posts for additional background on the case.)  First, the Federal Circuit ruled that “the Hatch-Waxman Act authorizes a counterclaim only if the listed patent does not claim any approved methods of using the listed drug.”  Second, “the terms of the counterclaim provision do not authorize an order compelling the patent holder to change its use code narrative,” just the patent number and expiration date of an Orange Book-listed patent.  Judge Dyk lodged a 28-page dissent arguing that “the majority’s crabbed view of the statute sanctions an unjustified manipulation of the Orange Book,” and that FDC Act §505(j)(5)(C)(ii)(I) should be available with respect to challenging PUCs, because “all Orange Book information is ‘patent information.’”

In May 2010, Caraco/Sun filed a Petition for Panel Rehearing and Rehearing en banc of the Federal Circuit’s panel decision.  The Federal Circuit denied that petition in a July 29, 2010 Order, but Judges Gajarsa and Dyk took the opportunity to lodge their complaints with the majority’s decision.  Among other things, Judges Gajarsa and Dyk believe that the majority’s opinion renders “section viii” labeling carve-out statements “a virtual nullity and leaves generic drug manufacturers without a remedy to challenge inaccurate Orange Book listings with respect to method of use patents.”

In their December 2010 Petition for Writ of Certiorari, Caraco/Sun “seek review of a splintered Federal Circuit decision raising issues of recurring importance under the Hatch-Waxman Act,” and ask the Court to address “[w]hether [FDC Act §505(j)(5)(C)(ii)(I)] applies where (1) there is ‘an approved method of using the drug’ that ‘the patent does not claim,’ and (2) the brand submits ‘patent information’ to the FDA that misstates the patent’s scope, requiring ‘correct[ion].’”  According to Caraco/Sun, the Federal Circuit’s decision is “[i]n conflict with this Court’s precedents and recent D.C. Circuit authority” (i.e., Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303 (D.C. Cir. 2010), which is also at the heart of another Petition for Writ of Certiorari) and “effectively nullifies both a critical provision of the [FDC] Act and related FDA regulations – which Congress ratified in 2003 – without calling for the FDA’s views.”  Moreover, Caraco/Sun argue that:

By the majority’s lights, no counterclaim is available because (1) Novo’s patent claims one approved use, even though it “does not claim” two other “approved method[s] of use”; and (2) the counterclaim is effectively limited to “delet[ing]” wrongly-listed patents, when Congress also authorized “correct[ing]” patent information.   The majority reached this result by announcing that the phrase “an approved method of us[e]” really means “any approved method of us[e].”  But that rewriting of the [FDC] Act violated this Court’s precedents – not least because the word “any” appears elsewhere in the same provision.  Moreover, the majority read the term “patent information” as limited to “an erroneous patent number or expiration date” – i.e., to exclude “use codes” – invalidating the FDA’s contrary interpretation, which Congress ratified. [(internal citations omitted)]

Interest in the Caraco/Sun petition will likely run high and may generate several amicus briefs.  GPhA, Mylan, Teva, Apotex, Impax, the National Legislative Association on Prescription Drug Prices, and the Consumers Federation of America filed briefs in the Federal Circuit in support of Caraco/Sun’s rehearing petition.