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A Company May Draft Its Own Use Code When Corrections Are Required Under 21 U.S.C. § 355(j)(5)(C)(ii)(I)

July 30, 2012

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Last Month at the Federal Circuit - August 2012

Judges: Rader (author), Clevenger, Dyk (concurring-in-part and dissenting-in-part)

[Appealed from: E.D. Mich., Judge Cohn]

In Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd., No. 10-1001 (Fed. Cir. July 30, 2012), the Federal Circuit affirmed-in-part and modified-in-part the district court’s injunction requiring Novo Nordisk A/S and Novo Nordisk, Inc. (collectively “Novo”) to reinstate its prior use code.

Novo’s U.S. Patent No. 6,677,358 (“the ’358 patent”) claims one of the three FDA-approved methods of using repaglinide. Novo’s current use code covers all three of the methods. The district court entered an injunction under 21 U.S.C. § 355(j)(5)(C)(ii)(I) requiring Novo to reinstate its prior use code. Caraco Pharmaceutical Laboratories, Ltd. and Sun Pharmaceutical Industries, Ltd. (collectively “Caraco”) moved for summary affirmance of the injunction.

The Court held that while the district court was correct in issuing an injunction requiring Novo to correct its use code, it abused its discretion in dictating the precise terms of the use code. “[T]he counterclaim provided by 21 U.S.C. § 355(j)(5)(C)(ii)(I) can be used ‘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.’” Slip op. at 2 (quoting Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670, 1675 (2012) (“Caraco I”)). The Court held that “[i]n this context, an appropriate order granting relief . . . will give the branded company the opportunity to draft its own corrected use code.” Id. at 4.

The Court noted that a use code may not “sweep more broadly than the patent,” id. (quoting Caraco I, 132 S. Ct. at 1683 n.7), but rather “must accurately describe . . . the approved method of use claimed in the patent,” id. (citing 21 C.F.R. § 314.53(c)(2)(ii)(P)(3)). “To be clear, it is appropriate for district courts to construe the scope of the patent claims and provide clear limits on the appropriate scope of the corresponding use code.” Id. “Within those limits, the branded company is given the opportunity to propose the specific language of the use code.” Id. The Court modified the injunction to permit Novo to draft an appropriate use code in light of its guidance, and noted that if it is overbroad, the district court has the power to correct the error.

Judge Dyk concurred-in-part and dissented-in-part. Judge Dyk agreed that, under the Supreme Court’s decision in Caraco I, Caraco was entitled to an injunction requiring Novo to correct its use code. Judge Dyk dissented “to the extent that the majority suggests the district court cannot order [Novo] to adopt a compliant use code but only enjoin the use of an improper use code.” Dyk Dissent at 1-2. “Novo should not be permitted to throw in a new wrench each time one is removed by offering new overbroad use codes and forcing Caraco to seek correction of each one.” Id. at 4. Judge Dyk stated that the present case “is a particularly easy case because the district court merely ordered reinstatement of the use code originally proposed by Novo.” Id.

Summary authored by Christopher M. Kurpinski, Esq.