United States Court of Appeals
for the Federal Circuit
__________________________
NOVO NORDISK A/S AND NOVO NORDISK, INC.,
Plaintiffs-Appellants,
v.
CARACO PHARMACEUTICAL LABORATORIES,
LTD.,
AND SUN PHARMACEUTICAL INDUSTRIES, LTD.,
Defendants-Appellees.
__________________________
2010-1001
__________________________
Appeal from the United States District Court for the
Eastern District of Michigan in case no. 2:05-CV-40188,
Judge Avern Cohn.
ON PETITION FOR PANEL REHEARING AND
REHEARING EN BANC
__________________________
Before RADER, Chief Judge, ∗ NEWMAN, CLEVENGER, ∗∗
LOURIE, BRYSON, GAJARSA, LINN, DYK, PROST, and
MOORE, Circuit Judges.
PER CURIAM.
∗
Randall R. Rader assumed the position of Chief
Judge on June 1, 2010.
∗∗
Raymond C. Clevenger, III took part in the deci-
sion on the panel rehearing.
NOVO NORDISK v. CARACO PHARMA 2
GAJARSA, Circuit Judge, with whom DYK, Circuit
Judge, joins, dissents from the denial of the petition for
rehearing en banc.
__________________________
JAMES F. HURST, Winston & Strawn LLP, of Chicago,
Illinois, filed a combined petition for panel hearing and
rehearing en banc for defendants-appellees. With him on
the petition were CHARLES B. KLEIN, STEFFEN N.
JOHNSON, SCOTT H. BLACKMAN, and ANDREW C. NICHOLS,
of Washington, DC; DAVID S. BLOCH, of San Francisco,
California.
JOSH A. KREVITT, Gibson, Dunn & Crutcher LLP, of
New York, New York, filed a response to the petition for
plaintiffs-appellants. With him on the response were
MARK A. PERRY, of Washington, DC; WAYNE BARSKY, of
Los Angeles, California; and MICHAEL A. SITZMAN, of San
Francisco, California.
WILLIAM A. RAKOCZY, Rakoczy Molino Mazzochi Siwik
LLP, of Chicago, Illinois, for amicus curiae Generic Phar-
maceutical Association.
SHASHANK UPADHYE, Apotex, Inc., of Toronto, ON
Canada, for amicus curiae Apotex, Inc. With him on the
brief was MICHAEL A. BERTA, Wilson Sonsini Goodrich &
Rosati, of San Francisco, California, for Impax Laborato-
ries, Inc.
DAVID A. BALTO, The Law Offices of David A. Balto, of
Washington, DC, for amici curiae Consumer Federation of
America and National Legislative Association on Pre-
scription Drug Prices.
3 NOVO NORDISK v. CARACO PHARMA
SHANNON M. BLOODWORTH, Perkins Coie LLP, of
Washington, DC, for amicus curiae Mylan Pharmaceuti-
cals Inc.
MICHAEL D. SHUMSKY, Kirkland & Ellis LLP, of Wash-
ington, DC for amicus curiae Teva Pharmaceuticals USA,
Inc.
__________________________
ORDER
Defendants-Appellees Caraco Pharmaceutical Labora-
tories, Ltd. and Sun Pharmaceutical Industries, Ltd.
(“Caraco and Sun”) filed a combined petition for panel
rehearing and rehearing en banc. The panel invited a
response from Plaintiffs-Appellants Novo Nordisk A/S and
Novo Nordisk, Inc. The court granted leave to file briefs
amici curiae to Teva Pharmaceuticals, USA, Inc., Mylan
Pharmaceuticals Inc., Apotex Inc. and Impax Laborato-
ries, Inc., Consumer Federation of America and National
Legislative Association on Prescription Drug Prices, and
Generic Pharmaceutical Association.
The petition for rehearing was considered by the
panel that heard the appeal, and thereafter the petition
for rehearing en banc, the response to the petition, and
briefs amici curiae were referred to the circuit judges who
are authorized to request a poll on whether to rehear the
appeal en banc. A poll was requested, taken, and failed.
Upon consideration thereof,
IT IS ORDERED THAT:
(1) The petition of Defendants-Appellees Caraco and
Sun for panel rehearing is denied.
(2) The petition of Defendants-Appellees Caraco and
Sun for rehearing en banc is denied.
NOVO NORDISK v. CARACO PHARMA 4
(3) The mandate of the court will issue on August 5,
2010.
FOR THE COURT
July 29, 2010 /s/ Jan Horbaly
—————————— ——————————
Date Jan Horbaly
Clerk
cc: Josh A. Krevitt, Esq.
James F. Hurst, Esq.
William A. Rakoczy, Esq.
Michael D. Shumsky, Esq.
Shannon M. Bloodworth, Esq.
Shashank Upadhye, Esq.
Michael A. Berta, Esq.
David A. Balto, Esq.
United States Court of Appeals
for the Federal Circuit
__________________________
NOVO NORDISK A/S AND NOVO NORDISK, INC.,
Plaintiffs-Appellants,
v.
CARACO PHARMACEUTICAL LABORATORIES,
LTD. AND
SUN PHARMACEUTICAL INDUSTRIES, LTD.,
Defendants-Appellees.
__________________________
2010-1001
__________________________
Appeal from the United States District Court for the
Eastern District of Michigan in case no. 2:05-CV-40188,
Judge Avern Cohn.
ON PETITION FOR REHEARING EN BANC
GAJARSA, Circuit Judge, with whom DYK, Circuit
Judge, joins, dissenting from the denial of the petition for
rehearing en banc.
__________________________
This case involves the statutory construction of 21
U.S.C. § 355(j)(5)(C)(ii) (“counterclaim provision”), a
critical provision of the Hatch-Waxman Act (“HWA”) that
has not previously been construed. 1 In 2003, Congress
1 The counterclaim provision provides:
NOVO NORDISK v. CARACO PHARMA 2
enacted the counterclaim provision in order to prevent
patent holders from making unwarranted or inaccurate
claims of patent coverage in the Orange Book. 2 Patent
holders previously made such claims in order to delay the
onset of competition from generic drug manufacturers, by
preventing or delaying FDA approval of a generic manu-
facturer’s Abbreviated New Drug Application (“ANDA”). 3
In Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d
1323 (Fed. Cir. 2001), this court held that generic drug
manufacturers could not sue to correct inaccurate and
expansive Orange Book listings, thus inspiring Congress
ii) Counterclaim to infringement action
(I) In general
If an owner of the patent or the holder of the approved
application under subsection (b) of this section 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 counter-
claim seeking an order requiring the holder to correct or
delete the patent information submitted by the holder
under subsection (b) or (c) of this section 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.
2 Under the HWA, Congress required the Food
and Drug Administration (“FDA”) to maintain and pub-
lish a list of patents associated with approved drugs and
methods of use. See 21 U.S.C. § 355(b)(1) (2006). The
Orange Book, or the Approved Drug Products with
Therapeutic Equivalence Evaluations, implements this
statutory mandate. See 21 C.F.R. § 314.53(c)(2)(i)(O).
3 A generic manufacturer may piggyback on the
safety and efficacy data the original drug manufacturer
submitted in its “New Drug Application” (“NDA”), and
may seek approval for an identical method of use for its
identical generic product by submitting an ANDA. See 21
U.S.C. § 355(j).
3 NOVO NORDISK v. CARACO PHARMA
to amend the HWA to include the counterclaim provision.
The majority’s opinion construes the counterclaim provi-
sion contrary to its manifest Congressional purpose. That
construction renders 21 U.S.C. § 355(j)(2)(A)(viii) (“Sec-
tion viii”) 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. Therefore, I respectfully dissent
from the court’s denial of Caraco’s petition for rehearing
en banc.
The background and facts of this case are well laid out
in Judge Dyk’s dissent in the original panel decision. See
Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 601 F.3d
1359, 1370-78 (Fed. Cir. 2010) (Dyk, J., dissenting). As
the dissent explains, the majority’s opinion adopts an
overly narrow construction of “patent information” and an
overly broad construction of “an approved method of using
the drug.” See id. at 1370-72, 1376-78. Both construc-
tions are irreconcilable with pre-existing FDA regulations,
the text of the HWA, and Congressional intent. See id. at
1370-78. I believe rehearing the case en banc is necessary
to rectify these improper constructions.
Not only is the majority’s construction of the counter-
claim provision erroneous, it also eliminates the careful
balance Congress has struck between encouraging phar-
maceutical discoveries and ensuring that the American
people have access to low cost generic drugs. Specifically,
the majority’s opinion seriously undermines Section viii, a
critical provision of the HWA that facilitates the approval
and marketing of lower-cost generic drugs for uses no
longer protected by a patent.
Under the HWA, Section viii comes into play when a
patent listed in the Orange Book “claims one, but not all,
approved methods of using a drug.” Id. at 1365. Sec-
NOVO NORDISK v. CARACO PHARMA 4
tion viii permits a generic manufacturer seeking to mar-
ket an approved use of a drug to certify that its method of
using the drug (as described on its label) is not covered by
a patent in the Orange Book. Normally, the label associ-
ated with the generic version of a drug must be exactly
the same as the label associated with the drug approved
in the original New Drug Application. 21 U.S.C. §
355(j)(2)(A)(v), (j)(4)(G); 21 C.F.R. § 14.94(a)(8)(iv). A
Section viii statement allows a generic manufacturer to
avoid infringement by deleting patented used from its
proposed label information, thus allowing it to avoid
infringement. 21 U.S.C. § 355(j)(2)(A)(viii).
Congress intended Section viii to facilitate the ap-
proval and marketing of lower-cost generic drugs, while
still respecting the patent rights of pioneering drug manu-
facturers. Pioneering drug manufacturers, however, have
found another way to game the system by subverting
Section viii carve-out statements and delaying the onset
of generic competition by submitting overbroad and
inaccurate use codes. Use codes are codes created by
patent holders in Orange Book listings to identify the
scope of their Orange Book patents. The FDA will not
approve a generic manufacturer’s Section viii proposed
label amendment if a use code covers the proposed label.
Importantly, the FDA makes no effort to determine the
accuracy of use codes. 4
4 The FDA has maintained, and we have af-
firmed, that its role in listing patents in the Orange Book
is “ministerial”; it simply lists the patent information that
it receives from brand manufacturers, expecting those
parties to properly abide by the statutory and regulatory
mandates. See Apotex, Inc. v. Thompson, 347 F.3d 1335,
1349 (Fed. Cir. 2003); Applications for FDA Approval to
Market a New Drug: Patent Submission and Listing
Requirements and Application of 30-Month Stays on
5 NOVO NORDISK v. CARACO PHARMA
In this case, Novo Nordisk (the brand drug manufac-
turer) owns a patent on the chemical composition of
repaglinide, which expired on March 14, 2009. See
U.S. Patent No. RE 37,035 (‘the ’035 patent). Novo also
owns a patent on the use of repaglinide in combination
with metformin to treat diabetes, which does not expire
until 2018. See U.S. Patent No. 6,677,358 (“the ’358
patent”). In addition to its combination with metformin to
treat diabetes, the FDA had approved repaglinide for two
other uses: (1) by itself, i.e. monotherapy and (2) in com-
bination with thiazolidinediones. See Novo Nordisk, 601
F.3d at 1362. Novo does not own any patents covering the
latter two approved uses.
In anticipation of the ’035 patent’s expiration, Caraco,
the generic manufacturer, sought to market the mono-
therapy use of repaglinide to treat diabetes, a use no
longer covered by a patent. In June 2005, Novo sued
Caraco, claiming that if Caraco marketed repaglinide, it
would nonetheless infringe the ’358 patent because Ca-
raco’s label would suggest the use of repaglinide together
with metformin. Following the FDA’s suggestion, Caraco
sought a Section viii carve-out statement, making clear
that it was not seeking approval to market the use of
repaglinide in combination with metformin and limiting
its label to the monotherapy use.
To defeat this Section viii carve-out statement, Novo
changed the Orange Book use code associated with the
’358 patent from “use of repaglinide in combination with
metformin to lower blood glucose” to “a method for im-
proving glycemic control in adults with type 2 diabetes
Approval of Abbreviated New Drug Applications Certify-
ing that a Patent Claiming a Drug Is Invalid or Will Not
Be Infringed, 68 Fed. Reg. 36,676, 36,683 (June 18, 2003)
(codified at 21 C.F.R. pt. 314).
NOVO NORDISK v. CARACO PHARMA 6
mellitus.” See id. at 1362-63. The latter use code unmis-
takably covering both patented and unpatented uses.
Because the FDA declined to police this inaccurate listing,
Caraco asserted the counterclaim provision in the under-
lying HWA litigation and requested that Novo revise its
use code to reflect the ’358 patent’s true scope. 5 The
majority opinion, however, held that counterclaim relief is
not available because the ’358 patent covered at least one
approved use. See id. at 1364-65. This effectively allows
a patent holder to extend its monopoly to unpatented
uses.
The majority opinion thus eviscerates Section viii. A
generic, like Caraco, cannot use Section viii if the pioneer-
ing manufacturer’s use code is erroneously broad. With
the majority’s blessing, pioneering drug manufacturers
now have every incentive to follow Novo’s lead and draft
exceedingly broad use codes thereby insulating them-
selves from generic competition and rendering Section viii
a dead letter.
The evisceration of Section viii is exacerbated by the
fact that, as Judge Clevenger points out in his concurring
opinion in the panel decision, the majority decision likely
leaves generic manufacturers such as Caraco with no
other remedy. See Novo Nordisk, 601 F.3d at 1367-68
(Clevenger, J., concurring). The FDA declined to grant
Caraco’s Section viii carve-out because the broad use code
for the ’358 patent now appears to cover Caraco’s pro-
5 Novo argued, and the majority and concurrence
agreed, that this predicament was somehow the fault of
the FDA, which had required Novo (and all oral diabetes
drug manufacturers) to change the “Indications” part of
the drug label for therapeutic reasons. As explained in
the dissenting opinion, Novo admits that the FDA did not
require Novo’s inaccurate listing. Novo Nordisk, 601 F.3d
at 1380 (Dyk, J. dissenting).
7 NOVO NORDISK v. CARACO PHARMA
posed carve-out label. Caraco also cannot disprove in-
fringement in the infringement lawsuit because the FDA
requires it to use Novo’s original label, which includes
information regarding the patented combination therapy.
Thus, Caraco will apparently have to wait to launch its
generic repaglinide product until 2018, the date on which
Novo’s ’358 patent on the combination therapy expires—
despite the fact that the ’358 patent concededly does not
cover the use for which Caraco seeks to market the drug.
This is an untenable and absurd result, and contravenes
the intent of Congress in adopting the counterclaim
provision.
Finally, the majority opinion effectively invalidates
the FDA’s effort to define “patent information” for the
purposes of the counterclaim provision. See Novo Nord-
isk, 601 F.3d at 1366-67. This invalidation is especially
troubling given Congress’s explicit approval of those
regulations. See Legislative and Regulatory Responses to
the FTC Study on Barriers to Entry in the Pharmaceutical
Marketplace: Hearing Before the S. Comm. on the Judici-
ary, 108th Cong. 19 (2003) (Statement of Sen. Schumer)
(“The bill provides a critical complement to the work the
FDA has done in clarifying its regulations on patent
listing, but it goes much further.”). Without even request-
ing the views of the FDA, the majority opinion refuses to
give effect to the FDA’s interpretation of an important
statutory term. See Apotex, Inc. v. Thompson, 347 F.3d
1335, 1351-52 (Fed. Cir. 2003) (“Deference is due to an
administrative agency’s regulations particularly when the
subject matter of the regulatory authority is a highly
detailed regulatory program to which the agency has
brought its specialized expertise, a characterization that
aptly describes the FDA’s role in the context of the regula-
tory scheme created pursuant to the Hatch-Waxman Act.”
(citation and quotations omitted)).
NOVO NORDISK v. CARACO PHARMA 8
Because the majority’s statutory construction of the
counterclaim provision abrogates the HWA and frustrates
the clear intent of Congress, I dissent from the court’s
denial of Caraco’s request for rehearing en banc.