Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd. (Fed. Cir. 2012)

[author: Andrew Williams]

Novo NordiskOn Monday, the Federal Circuit issued an Order in the Novo Nordisk A/S v. Caraco Pharm. Labs. Ltd. case, modifying an injunction against Novo issued by the lower court from one dictating express language to amend its Orange Book use code to one that required Novo to amend the use code.  The Order, however, provides flexibility for the exact language, provided that the language accurately describes the scope of the Orange Book-listed patent claim.  Judge Dyk dissented in part because he believed that the lower court's injunction should not have been modified because district courts are supposed to have broad authority to shape remedial injunctive orders.

Caraco Pharmaceutical LaboratoriesThe Novo case had an extensive history, with the most recent stop at the Supreme Court, resulting in a reversal of the Federal Circuit's previous opinion and a remand for further proceedings consistent with the Supreme Court's decision.  The history and outcome of the Supreme Court's opinion has been discussed here, and therefore this summary will only provide a brief introduction to provide the proper context for the Federal Circuit's recent order.  Novo markets the drug PRANDIN® for the treatment of Type 2 (adult-onset) diabetes.  Repaglinide, the active ingredient in PRANDIN®, is covered by Reissue Patent No. RE37,035, and the use of repaglinide in combination with metformin is covered by U.S. Patent No. 6,677,358 ("the '358 patent").  However, PRANDIN® was also approved for use as a monotherapy and in combination with thiazolidinediones, and the use code listed in the Orange Book was broad enough to cover these other non-patented uses.  Caraco filed an ANDA to market a generic version of PRANDIN®, and included a Section viii statement to "carve-out" the claimed method of use in an attempt to circumvent the '358 patent.  Nevertheless, because the use code was overly broad, the FDA rejected Caraco's carve out label.  As a result, Caraco sought a court order requiring the FDA to narrow the Orange Book listed use code.  After the District Court granted such an order, and the Federal Circuit vacated the injunction, the Supreme Court held that 21 U.S.C. § 355(j)(5)(c)(ii)(I) provided an ANDA applicant an opportunity to challenge inaccurate use codes and designations.  The current order is a result of Caraco's motion for a summary affirmance of the injunction based on the Supreme Court's remand of the case.

The first issue raised by Novo's challenge to the motion was whether the current use code was actually incorrect.  All three members of the panel believed that, based on the admitted facts of this case, the Supreme Court's decision foreclosed any argument to the contrary.  Therefore, the only remaining issue advanced by Novo was whether the mandatory injunction of the District Court was in error.

The majority answered this question in affirmative.  It began with the language of the counterclaim statue, which provides that the court can issue "an order requiring the holder to correct or delete the patent information submitted by the holder" to the FDA.  The Court also noted that the FDA regulations make the branded company responsible for drafting the use code in the first place, and in fact must certify that the information was accurate and complete.  When viewed in combination, these two provisions provide that the only appropriate order would allow the branded company to draft its own corrected use code.  The District Court's injunction, however, dictated the exact language of the modification (even if the exact language was a previously appearing use code for PRANDIN®):

Novo Nordisk is hereby directed by mandatory injunction under 21 U.S.C. § 355(j)(5)(C)(ii)(1)(bb) to correct within twenty (20) days from the date of this Order and Injunction its inaccurate description of the '358 patent by submitting to FDA an amended form FDA 3542 that reinstates its former U-546 listing for Prandin and describes claim 4 of the '358 patent in section 4.2b as covering the "use of repaglinide in combination with metformin to lower blood glucose."

As a result, the Court found that the District Court had abused its discretion.  Of course, the Court noted that the use code must accurately describe the patented use, and that it is appropriate for a district court to construe the scope of the patent claims (which will influence the scope of the use code).  Also, in response to the dissent's concerns, the majority pointed out that the district court always has the power to correct any attempt to submit an overly broad revised use code.  Therefore, the majority revised the injunction to read:

Novo Nordisk is hereby directed by mandatory injunction under 21 U.S.C. § 355(j)(5)(C)(ii)(1)(bb) to correct within twenty (20) days from the date of this Order and Injunction its inaccurate description of the '358 patent by submitting to FDA an amended form FDA 3542 for Prandin that accurately describes the scope of claim 4 of the '358 patent in section 4.2b.  The description shall be clearly limited to use of repaglinide in combination with metformin to treat non-insulin dependent diabetes mellitus.

In dissent, Judge Dyk also began with the language of the statue, as provided above.  However, he could find no prohibition from allowing the district court to dictate the particular use code as a corrective measure.  The dissent also pointed out that district courts have traditionally had broad authority to shape injunctive orders.  Finally, Judge Dyk pointed out that there is no statute or regulation that says that a district court cannot correct a use code under the counterclaim statute, which would be required to prevent a court from doing so (citing Weinberger v. Romero-Barcelo, 456 U.S. 305, 313 (1982) ("[T]he comprehensiveness of this equitable jurisdiction is not to be denied or limited in the absence of a clear and valid legislative command.")).  By way of illustration, it analogized this current situation to an order from a lower court amending the inventorship of a patent, noting that the Federal Circuit has never limited a lower court to ordering a general correction of an incorrect list of inventors rather than directing exactly how the inventorship should be changed.  This might not be a completely appropriate analogy, but the dissent had a valid point when it noted that a patent holder should not be allowed to continue to "throw a wrench" into the ability of the FDA to approve generic drugs, and such a ruling by the majority would have this effect.  Whether Novo in this case, or some future NDA holder in a separate case, could craft a revised use code that still accurately reflects the patented use but also thwarts the attempts of an ANDA applicant to obtain a "carve out" remains to be seen.

Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd. (Fed. Cir. 2012)
Panel: Chief Judge Rader and Circuit Judges Clevenger and Dyk
Order for the court by Chief Judge Rader; opinion concurring in part and dissenting in part by Circuit Judge Dyk