Patent Law

Manipulative Practices

By Gary Odom and Jordan Kuhn

"In 2003, Congress enacted the counterclaim provision of the Hatch-Waxman Act in order to prevent manipulative practices by patent holders with respect to the Orange Book listings. These practices were designed to delay the onset of competition from generic drug manufacturers." Judge DYK, dissenting in Novo Nordisk v. Caraco. The Byzantine regulatory labyrinth over drugs coming off patent protection bounces like a ball on the roulette wheel of case law once more.

Novo Nordisk v. Caraco Pharmaceutical and Sun Pharmaceutical (CAFC 2001-1001) precedential

The Hatch-Waxman Act strikes a balance between two potentially competing policy interests--inducing pioneering development of pharmaceutical formulations and methods and facilitating efficient transition to a market with low-cost, generic copies of those pioneering inventions at the close of a patent term. See Andrx Pharms., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed. Cir. 2002).

Title 21 prohibits sale of a new drug without FDA approval. 21 U.S.C. § 355(a). To obtain that approval, a pioneering manufacturer must file a new drug application ("NDA"), containing clinical studies of the drug's safety and efficacy. 21 U.S.C. § 355(b)(1). As part of the NDA process, the manufacturer must also identify all patents that claim the drug or a method of use...

A manufacturer that seeks to market a generic copy of these listed drugs may submit an abbreviated new drug application ("ANDA"). 21 U.S.C. § 355(j). The ANDA process streamlines FDA approval by allowing the generic manufacturer to rely on the safety and efficacy studies of a drug already listed in the Orange Book upon a showing of bioequivalence. 21 U.S.C. § 355(j)(2)(A)(iv).

As part of the ANDA process, a generic manufacturer must make a certification addressing each patent identified in the Orange Book pertaining to its drug. 21 U.S.C. § 355(j)(2)(A)(vii). Specifically, the generic manufacturer must select one of four alternatives permitting use of the patented product or process: (I) no such patent information has been submitted to the FDA; (II) the patent has expired; (III) the patent is set to expire on a certain date; or (IV) the 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).

The Hatch-Waxman Act facilitates early resolution of disputes between pioneering and generic manufacturers. To achieve this objective, the Act makes a Paragraph IV certification into an act of patent infringement. 35 U.S.C § 271(e)(2).

And so filing an ANDA starts a patent fight.

The Hatch-Waxman Act enables a generic manufacturer in a Paragraph IV suit to assert a counterclaim challenging the accuracy of the "patent information" submitted to the FDA...

Caraco filed an ANDA. Novo sued Caraco. Caraco countered that Novo was misusing its patents to claim overly broad protection. The district court bought the argument, entering an injunction that told the FDA to adjust its Orange Book listing.

On appeal, Novo got the CAFC to reverse and vacate, because Caraco "does not have a statutory basis to assert a counterclaim requesting such injunctive relief."

Caraco's real complaint should lie with the FDA, not with Novo. Had it not been for the FDA's regulatory action, Caraco could have asserted in a Paragraph IV lawsuit that its proposed labeling did not infringe the '358 patent. It was the FDA, not Novo, that tipped the careful balance in the favor of pioneering manufacturers.

Judge Rader penned the majority decision. Judge Clevenger had his own concurring opinion, while Judge DYK dissented, that this ruling makes more of a mess.

You can hurt your head by trying to comprehend the ruling and its subtexts, so don't be surprised if you end up heavily medicated from the attempt. Maybe that was the whole point all along: to peddle drugs.

Full post as published by The Patent Prospector on April 15, 2010 (boomark / email).