Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S

• Decision Date: 17 April 2012
• Docket Number: No. 10–844.,10–844.
• Citation: 182 L.Ed.2d 678,132 S.Ct. 1670,566 U.S. 399
• Parties: CARACO PHARMACEUTICAL LABORATORIES, LTD., et al., Petitioners v. NOVO NORDISK A/S et al.
• Court: U.S. Supreme Court

566 U.S. 399

132 S.Ct. 1670

182 L.Ed.2d 678

CARACO PHARMACEUTICAL LABORATORIES, LTD., et al., Petitioners

v.NOVO NORDISK A/S et al.

No. 10–844.

Supreme Court of the United States

Argued Dec. 5, 2011.

Decided April 17, 2012.

James F. Hurst, Chicago, IL, for Petitioners.

Benjamin J. Horwich, for the United States, as amicus curiae, supporting the Petitioners.

Mark A. Perry, Washington, DC, for Respondents.

James F. Hurst, Counsel of Record, William P. Ferranti, Winston & Strawn LLP, Chicago, IL, David S. Bloch, Winston & Strawn LLP, San Francisco, CA, Charles B. Klein, Steffen N. Johnson, Andrew C. Nichols, Christopher M. Bruno, Winston & Strawn LLP, Washington, DC, for Petitioners.

Josh A. Krevitt, Gibson, Dunn & Crutcher LLP, New York, NY, Wayne Barsky, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, Mark A. Perry, Counsel of Record, Scott P. Martin, Gibson, Dunn & Crutcher LLP, Washington, DC, Michael A. Sitzman, Gibson, Dunn & Crutcher LLP, San Francisco, CA, for Respondents.

Justice KAGAN delivered the opinion of the Court.

When the Food and Drug Administration (FDA) evaluates an application to market a generic drug, it considers whether the proposed drug would infringe a patent held by the manufacturer of the brand-name version. To assess that matter, the FDA requires brand manufacturers to submit descriptions of the scope of their patents, known as use codes. The FDA does not attempt to determine if that information is accurate. Rather, the FDA assumes that it is so and decides whether to approve a generic drug on that basis. As a result, the breadth of the use code may make the difference between approval and denial of a generic company's application.

In this case, we consider whether Congress has authorized a generic company to challenge a use code's accuracy by bringing a counterclaim against the brand manufacturer in a patent infringement suit. The relevant statute provides that a generic company "may assert a counterclaim seeking an order requiring the [brand manufacturer] to correct or delete the patent information [it] submitted ... under [two statutory subsections] on the ground that the patent does not claim ... an approved method of using the drug." 117 Stat. 2452, 21 U.S.C. § 355(j)(5)(C)(ii)(I). We hold that a generic manufacturer may employ this provision to force correction of a use code that inaccurately describes the brand's patent as covering a particular method of using the drug in question.

I

A

The FDA regulates the manufacture, sale, and labeling of prescription drugs under a complex statutory scheme. To begin at the beginning: When a brand manufacturer wishes to market a novel drug, it must submit a new drug application (NDA) to the FDA for approval. The NDA must include, among other things, a statement of the drug's components, scientific data showing that the drug is safe and effective, and proposed labeling describing the uses for which the drug may be marketed. See §§ 355(b)(1), (d). The FDA may approve a brand-name drug for multiple methods of use—either to treat different conditions or to treat the same condition in different ways.

Once the FDA has approved a brand manufacturer's drug, another company may seek permission to market a generic version pursuant to legislation known as the Hatch–Waxman Amendments. See Drug Price Competition and Patent Term Restoration Act of 1984, 98 Stat. 1585. Those amendments allow a generic competitor to file an abbreviated new drug application (ANDA) piggy-backing on the brand's NDA. Rather than providing independent evidence of safety and efficacy, the typical ANDA shows that the generic drug has the same active ingredients as, and is biologically equivalent to, the brand-name drug. See §§ 355(j)(2)(A)(ii), (iv). As we have previously recognized, this process is designed to speed the introduction of low-cost generic drugs to market. See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990).

Because the FDA cannot authorize a generic drug that would infringe a patent, the timing of an ANDA's approval depends on the scope and duration of the patents covering the brand-name drug. Those patents come in different varieties. One type protects the drug compound itself. Another kind—the one at issue here—gives the brand manufacturer exclusive rights over a particular method of using the drug. In some circumstances, a brand manufacturer may hold such a method-of-use patent even after its patent on the drug compound has expired.

To facilitate the approval of generic drugs as soon as patents allow, the Hatch–Waxman Amendments and FDA regulations direct brand manufacturers to file information about their patents. The statute mandates that a brand submit in its NDA "the patent number and the expiration date of any patent which claims the drug for which the [brand] submitted the [NDA] or which claims a method of using such drug." §§ 355(b)(1). And the regulations issued under that statute require that, once an NDA is approved, the brand provide a description of any method-of-use patent it holds. See 21 CFR §§ 314.53(c)(2)(ii)(P)(3), (e) (2011). That description is known as a use code, and the brand submits it on FDA Form 3542. As later discussed, the FDA does not attempt to verify the accuracy of the use codes that brand manufacturers supply. It simply publishes the codes, along with the corresponding patent numbers and expiration dates, in a fat, brightly hued volume called the Orange Book (less colorfully but more officially denominated Approved Drug Products with Therapeutic Equivalence Evaluations).

After consulting the Orange Book, a company filing an ANDA must assure the FDA that its proposed generic drug will not infringe the brand's patents. When no patents are listed in the Orange Book or all listed patents have expired (or will expire prior to the ANDA's approval), the generic manufacturer simply certifies to that effect. See 21 U.S.C. §§ 355(j)(2)(A)(vii)(I)–(III). Otherwise, the applicant has two possible ways to obtain approval.

One option is to submit a so-called section viii statement, which asserts that the generic manufacturer will market the drug for one or more methods of use not covered by the brand's patents. See § 355(j)(2)(A)(viii). A section viii statement is typically used when the brand's patent on the drug compound has expired and the brand holds patents on only some approved methods of using the drug. If the ANDA applicant follows this route, it will propose labeling for the generic drug that "carves out" from the brand's approved label the still-patented methods of use. See 21 CFR § 314.94(a)(8)(iv). The FDA may approve such a modified label, see § 314.127(a)(7), as an exception to the usual rule that a generic drug must bear the same label as the brand-name product, see 21 U.S.C. §§ 355(j)(2)(A)(v), (j)(4)(G). FDA acceptance of the carve-out label allows the generic company to place its drug on the market (assuming the ANDA meets other requirements), but only for a subset of approved uses—i.e., those not covered by the brand's patents.

Of particular relevance here, the FDA will not approve such an ANDA if the generic's proposed carve-out label overlaps at all with the brand's use code. See 68 Fed.Reg. 36682–36683 (2003). The FDA takes that code as a given: It does not independently assess the patent's scope or otherwise look behind the description authored by the brand. According to the agency, it lacks "both [the] expertise and [the] authority" to review patent claims; although it will forward questions about the accuracy of a use code to the brand,¹ ITS OWN "role with respect to patent listing is ministerial." Id., at 36683; see ibid. ("A fundamental assumption of the Hatch–Waxman Amendments is that the courts are the appropriate mechanism for the resolution of disputes about the scope and validity of patents").² Thus, whether section viii is available to a generic manufacturer depends on how the brand describes its patent. Only if the use code provides sufficient space for the generic's proposed label will the FDA approve an ANDA with a section viii statement.

The generic manufacturer's second option is to file a so-called paragraph IV certification, which states that a listed patent "is invalid or will not be infringed by the manufacture, use, or sale of the [generic] drug." 21 U.S.C. § 355(j)(2)(A)(vii)(IV). A generic manufacturer will typically take this path in either of two situations: if it wants to market the drug for all uses, rather than carving out those still allegedly under patent; or if it discovers, as described above, that any carve-out label it is willing to adopt cannot avoid the brand's use code. Filing a paragraph IV certification means provoking litigation. The patent statute treats such a filing as itself an act of infringement, which gives the brand an immediate right to sue. See 35 U.S.C. § 271(e)(2)(A). Assuming the brand does so, the FDA generally may not approve the ANDA until 30 months pass or the court finds the patent invalid or not infringed. See 21 U.S.C. § 355(j)(5)(B)(iii). Accordingly, the paragraph IV process is likely to keep the generic drug off the market for a lengthy period, but may eventually enable the generic company to market its drug for all approved uses.

In the late 1990's, evidence mounted that some brands were exploiting this statutory scheme to prevent or delay the marketing of generic drugs, and the Federal Trade Commission (FTC) soon issued a study detailing these anticompetitive practices. See FTC, Generic Drug Entry Prior to Patent Expiration: An FTC Study, pp. iii–vi (July 2002) (hereinafter FTC Study). That report focused attention on brands' submission of inaccurate patent information to the FDA. In one case cited by the FTC, Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323 (C.A.Fed.2001), a brand whose original patent on a drug was set to expire listed a new patent ostensibly extending its rights over the drug, but in fact covering neither the...