Court Opinion

ID: 805471
Source: CourtListenerOpinion
Date Created: 2012-07-30 15:17:57+00
Date Added: 2024-06-11T12:41:42.936305
License: Public Domain

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 MOTION TO AFFIRM INJUNCTION OF THE
              DISTRICT COURT
               __________________________

Before RADER, Chief Judge, CLEVENGER and DYK Circuit
Judges.
Order for the court filed by Chief Judge RADER. Opinion
concurring in part and dissenting in part filed by Circuit
Judge DYK.
RADER, Chief Judge.
NOVO NORDISK   v. CARACO PHARMA                              2

     Defendants-Appellees Caraco Pharmaceutical Labora-
tories, Ltd. and Sun Pharmaceutical Industries, Ltd.
(collectively, “Caraco”) move for summary affirmance of
the injunction of the United States District Court for the
Eastern District of Michigan pursuant to the Supreme
Court decision in Caraco Pharmaceutical Laboratories,
Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670 (2012), which
reversed this court’s judgment and remanded for further
proceedings. Plaintiffs-Appellants Novo Nordisk A/S and
Novo Nordisk, Inc. (collectively, “Novo”) oppose. Caraco
replies. For the reasons set forth below, this court af-
firms-in-part and modifies-in-part the District Court’s
injunction.
    Novo argues that two issues remain to be resolved by
this court on remand: (1) whether Novo’s current use code
is “correct”; and (2) whether the district court erred in
issuing a mandatory injunction requiring Novo to rein-
state its prior use code.
     This court finds, in light of the admitted facts in this
case, that the Supreme Court decision forecloses any
argument that Novo’s use code is “correct.” The Court
held that the 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 ques-
tion.” Caraco, 132 S. Ct. at 1675. The Food and Drug
Administration (“FDA”) has found Novo’s current use code
covers all three FDA-approved methods of using repag-
linide. Id. at 1679; see Novo Nordisk A/S v. Caraco
Pharm. Labs., Ltd., 601 F.3d 1359, 1363 (Fed. Cir. 2010).
It is undisputed that Novo’s U.S. Patent No. 6,677,358
(“’358 patent”) claims only one of those three approved
methods of use. Caraco, 132 S. Ct. at 1678-79; Novo, 601
3                           NOVO NORDISK   v. CARACO PHARMA

F.3d at 1364. Thus, the current use code inaccurately
describes Novo’s patent as covering two FDA-approved
methods of using repaglinide that the ’358 patent admit-
tedly does not cover. Caraco, 132 S. Ct. at 1688 (holding
“Caraco may bring a counterclaim seeking to ‘correct’
Novo's use code ‘on the ground that’ the ’358 patent ‘does
not claim . . . an approved method of using the drug’-
indeed, does not claim two”) (emphasis added) (quoting 21
U.S.C. § 355(j)(5)(C)(ii)(I)).
    This court reviews a district court's grant of a perma-
nent injunction and the scope of that injunction for abuse
of discretion. Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770,
772 (Fed. Cir. 1993). The counterclaim statute provides
that the remedy is “an order requiring the holder to
correct or delete the patent information submitted by the
holder” to the FDA. 21 U.S.C. § 355(j)(5)(C)(ii)(I). Dam-
ages are prohibited. Id. § 355(j)(5)(C)(ii)(III).
    The District Court entered an injunction on Septem-
ber 25, 2009, which provided:
    Novo Nordisk is hereby directed by mandatory in-
    junction 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 descrip-
    tion 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."
    Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., No.
2:05-cv-40188, 2009 U.S. Dist. LEXIS 88551 (E.D. Mich.,
Sept. 25, 2009) (emphasis added).
NOVO NORDISK   v. CARACO PHARMA                           4

    The relevant FDA regulations make the branded
company responsible for drafting appropriate use codes
and submitting them to the FDA.             See 21 C.F.R.
§ 314.53(c)(2)(ii)(P) (describing information to be submit-
ted on FDA Form 3542 for each method-of-use patent).
The company must certify under penalty of perjury “that
this is an accurate and complete submission of patent
information.” FDA Form 3542, Part 6.1. In this context,
an appropriate order granting relief under 21 U.S.C.
§ 355(j)(5)(C)(ii)(I) will give the branded company the
opportunity to draft its own corrected use code.
    The use code offered by the branded company must
not “sweep more broadly than the patent.” Caraco, 132 S.
Ct. at 1683 n.7. Rather, the use code must accurately
describe “the patented method of use”—i.e., the approved
method of use claimed in the patent. 21 C.F.R. §
314.53(c)(2)(ii)(P)(3) (emphasis added). Here, the ’358
patent claims “[a] method for treating non-insulin de-
pendent diabetes mellitus (NIDDM) comprising adminis-
tering to a patient in need of such treatment repaglinide
in combination with metformin.” ’358 patent, claim 4. An
appropriate use code therefore must be limited to use of
“repaglinide in combination with metformin” to treat
NIDDM.
    This court holds that while the District Court was
correct in issuing an injunction requiring correction of
Novo’s use code listing for the ’358 patent, it abused its
discretion in dictating the precise terms of the use code to
be submitted on FDA Form 3542. To be clear, it is appro-
priate for district courts to construe the scope of the
patent claims and provide clear limits on the appropriate
scope of the corresponding use code. Within those limits,
the branded company is given the opportunity to propose
the specific language of the use code. Therefore, this
court modifies the injunction as follows to permit Novo to
5                           NOVO NORDISK   v. CARACO PHARMA

draft an appropriate use code in light of the guidance
above. Contrary to the dissent’s concerns, this holding
does not give Novo unbounded discretion to propose a new
overbroad use code. If the revised code offered is over-
broad, the district court has the power to correct the error.
Therefore,
IT IS ORDERED THAT:
      Novo Nordisk is hereby directed by manda-
      tory     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 descrip-
      tion shall be clearly limited to use of repag-
      linide in combination with metformin to
      treat non-insulin dependent diabetes melli-
      tus.

                                    FOR THE COURT

     July 30, 2012                  /s/ Jan Horbaly
         Date                       Jan Horbaly
                                    Clerk

cc: Josh A. Krevitt, Esq.
    James F. Hurst. 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 MOTION TO AFFIRM INJUNCTION OF THE
               DISTRICT COURT

               __________________________

DYK, Circuit Judge, concurring in part and dissenting in
part.
    I agree with the majority that under the Supreme
Court’s decision in Caraco Pharmaceutical Laboratories,
Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670 (2012), Novo’s
use code is not correct and Caraco is entitled to an injunc-
tion requiring Novo to correct its use code. I respectfully
NOVO NORDISK   v. CARACO PHARMA                           2

dissent to the extent that the majority suggests the dis-
trict court cannot order Caraco to adopt a compliant use
code but only enjoin the use of an improper use code. As
in the original decision, such an approach would read into
the statute limitations that are not there.
     The counterclaim provision entitles Caraco to the
remedy of “an order requiring the [NDA] holder [i.e.,
Novo] to correct . . . the patent information [i.e., the use
code].” 21 U.S.C. § 355(j)(5)(C)(ii)(I). On its face this
provision appears to allow the district court to require a
particular use code as a corrective measure. See Webster’s
Third New International Dictionary 511 (2002) (defining
correct, in the year before the counterclaim provision’s
enactment, as “to make or set right,” “remove the faults or
errors from,” or “alter or adjust so as to bring to some
standard or required condition”). Traditionally, district
courts have broad inherent authority to shape remedial
injunctive orders. See Lemon v. Kurtzman, 411 U.S. 192,
200 (1973) (“In shaping equity decrees, the trial court is
vested with broad discretionary power; appellate review is
correspondingly narrow.”); Hecht Co. v. Bowles, 321 U.S.
321, 329 (1944) (noting that district courts have inherent
equitable authority to “mould each decree to the necessi-
ties of the particular case”). In particular, it is estab-
lished that courts have authority to require specific
affirmative acts through mandatory injunctions. See
California v. Am. Stores Co., 495 U.S. 271, 280-83 (1990)
(holding that a statute entitling a party to “have injunc-
tive relief” entitles parties to both prohibitory and manda-
tory injunctions under the “traditional principles of
equity”); Morrison v. Work, 266 U.S. 481, 490 (1925)
(stating that a mandatory injunction may be granted “in
the exercise of a sound judicial discretion”); 1 Dan B.
Dobbs, Dobbs Law of Remedies § 2.9 (2d ed. 1993).
3                           NOVO NORDISK   v. CARACO PHARMA

    “[T]he comprehensiveness of this equitable jurisdic-
tion is not to be denied or limited in the absence of a clear
and valid legislative command.” Weinberger v. Romero-
Barcelo, 456 U.S. 305, 313 (1982) (emphasis added) (quot-
ing Porter v. Warner Holding Co., 328 U.S. 395, 398
(1946)); see also United States v. Oakland Cannabis
Buyers’ Coop., 532 U.S. 483, 496 (2001). There is no “clear
and valid legislative command” constraining the district
court’s broad discretionary power over the scope of the
order requiring Novo to correct its use code. See 21 U.S.C.
§ 355(j)(5)(C)(ii)(I). The majority may suggest that the
district court’s injunction was somehow improper because
FDA regulations make the branded company responsible
for initially proposing a use code, 1 but those regulations
do not constrain the court’s authority under the counter-
claim provision to order a correction, and do not purport
to do so. No statute or regulation says that a use code
cannot be corrected by a court under the counterclaim
provision. The use code information is simply the descrip-
tion of the scope of the patent. Courts routinely construe
the scope of patent protection, so there is hardly anything
unusual in the court’s doing exactly the same thing in the
context of the counterclaim provision.
    Analogously, when the inventorship of a patent is
challenged, 35 U.S.C. § 256 allows a court to “order cor-
rection of the patent.” As with the FDA filings, the patent
applicant is required to list the inventors in the first
instance and to file an oath or declaration indicating that
    1   Within 30 days of approval of a new drug, “the
applicant shall submit FDA Form 3542 for each patent
that claims the drug substance (active ingredient), drug
product (formulation and composition), or approved
method of use.” 21 C.F.R. § 314.53(c)(2)(ii). The required
information on Form 3542 includes “[t]he description of
the patented method of use” for each method-of-use pat-
ent. Id. § 314.52(c)(2)(ii)(P)(3).
NOVO NORDISK   v. CARACO PHARMA                            4

the inventor list is correct. 37 C.F.R. § 1.63. We have
never limited district courts’ authority under this provi-
sion to ordering only general correction of an incorrect list
of inventors, rather than directing who should be added or
removed as a co-inventor. See, e.g., Bd. of Educ. ex rel.
Bd. of Trs. of Fla. State Univ. v. Am. Bioscience, Inc., 333
F.3d 1330, 1342 (Fed. Cir. 2003) (“[W]e conclude that
Soon-Shiong and Desai are coinventors with Tao of the
compounds claimed in the ’653 patent, but that Holton,
Nadizadeh, and Yang are not.”).
    In its opinion in this case, the Supreme Court noted
that “[a]n overbroad use code” like Novo’s “throws a
wrench into the FDA’s ability to approve generic drugs,”
and that the counterclaim provision was enacted to rem-
edy this problem. Caraco, 132 S. Ct. at 1684. 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. Such
an approach could potentially hamstring the district court
by denying it the authority to state what the correct code
is. This is a particularly easy case because the district
court merely ordered the reinstatement of the use code
originally proposed by Novo.