United States: Federal Circuit Restricts Injunctions To Correct Brand’s FDA Use Codes

Originally published in V&E IP Insights E-communication, July 31, 2012

On July 30, 2012, the Federal Circuit issued an opinion on remand in the Novo Nordisk v. Caraco Pharm. Labs case holding that injunctions issued to correct use codes cannot specify the particular use codes and descriptions to be listed in the FDA's Orange Book.

Previously in this case, the U.S. Supreme Court held that the Hatch Waxman Act provides a generic drug manufacturer (generic) with a counterclaim to force the branded drug manufacturer (brand) to correct a use code that inaccurately describes the brand's patent as covering a particular use for the drug. Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670 (2012).

Novo owns a patent covering only one of the three FDA-approved uses of its brand-name drug. In 2005, Caraco filed an abbreviated new drug application (ANDA) seeking to market its generic drug under paragraph IV. See 21 U.S.C. §355(j)(2)(A)(vii)(IV). This prompted a patent infringement suit by Novo in the Eastern District of Michigan. While the suit was pending, Novo amended its use code in the Orange Book to cover all three FDA-approved uses. As such, Caraco's proposed uses overlapped with Novo's use codes. Accordingly, Caraco was no longer able to seek the shorter route to market under section viii and instead needed to resort to the lengthier paragraph IV process. See §355(j)(2)(A)(viii).

Caraco responded by filing a counterclaim to "correct" Novo's use code on the grounds that the patent covers only one of the three uses. Under an amendment to the Hatch Waxman Act, a successful counterclaim achieves "an order requiring the [brand] to correct or delete the patent information submitted by the [brand in the Orange Book] 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). The Supreme Court reversed the Federal Circuit and held that a generic may employ the counterclaim provision to force correction of a use code that inaccurately describes the uses of a brand's patent.

On remand, the Eastern District of Michigan issued an injunction requiring Novo to reinstate its prior use code with the particular description "use of repaglinide in combination with metformin to lower blood glucose." On appeal, the Federal Circuit affirmed the injunction but modified it to require a use code that "accurately describes the scope" of the patent and a description that "shall be clearly limited to use of repaglinide in combination with metformin to treat non-insulin dependent diabetes mellitus." The Federal Circuit reasoned that the court could not dictate the specific language submitted to the FDA because FDA regulations give the responsibility for drafting appropriate use codes to the branded company. See 21 C.F.R. § 314.53(c)(2)(ii)(P).

In dissent, Judge Dyk argued that the counterclaim provision of the Hatch Waxman Act does not limit the authority of the district court to dictate the precise use code and description submitted to the FDA. Further, he was concerned that branded companies will continue using overbroad use codes that will require generics to seek additional time-consuming corrections.

What This Means for You

the Federal Circuit has limited the ability of the district courts to direct the correction of inaccurate use codes. It remains to be seen whether branded companies will use this restriction to submit overbroad use codes as the dissent predicts.

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