CARACO PHARMACEUTICAL LABORATORIES, LTD. v. NOVO NORDISK A/S
Novo Nordisk sued Caraco Pharmaceutical Laboratories and Sun Pharmaceutical Industries Ltd. for infringement in the wake of Caraco filing an abbreviated new drug application ("ANDA") for a generic version of the Type 2 diabetes drug Prandin. Caraco and Sun promptly countersued. While the litigation was pending, Novo changed the FDA Orange Book's use code — a description of the scope of the patent —undermining Caraco's argument that patent did not apply to the purpose for which the generic product would be marketed. Caraco filed a counterclaim requesting an order that would require Novo Nordisk to change back the use code.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 authorized ANDA applicants to assert a counterclaim seeking an order requiring the brand to correct or delete submitted patent information on the grounds that the patent does not claim 1) the drug for which the brand’s new drug application was approved or 2) an approved method of using the drug.
The U.S. District Court for the Eastern District of Michigan granted the counterclaim and issued an injunction ordering Novo Nordisk to change the code. Novo appealed to the United States Court of Appeals for the Federal Circuit, arguing that the district court had abused its discretion. The Federal Circuit ruled in favor of Novo, holding that Caraco could only assert a counterclaim if Novo’s patent did not claim any approved method of use.
(1) Does the counterclaim provision of the Hatch-Waxman Act only apply if Novo’s Prandin patent does not claim any approved method of use?
(2) Does Novo's use code for Prandin qualify as “patent information submitted under subsections (b) and (c)” for the purposes of the act?
Legal provision: Hatch-Waxman Act
Yes and yes. In a unanimous decision written by Justice Elena Kagan, the Court held that the Hatch-Waxman Act allows counterclaims to challenge unpatented uses of generic drugs even if other approved uses are still under patent. Justice Kagan looked to the language and purpose of the statute, focusing on the meaning of the phrase, “the patent does not claim...an approved method of using the drug.” While acknowledging that the words “not an” could be interpreted to mean “not any,” as Novo suggested, Justice Kagan rejected Novo’s argument that the counterclaim right evaporates if Novo has a patent over another use not claimed or contested by Caraco and Sun. She argued that the act’s counterclaim provision essentially allows a generic drug marketer to challenge a brand’s assertion of rights over whichever use the generic drug marketer wishes to pursue. Justice Kagan noted that if Congress intended Novo’s “not any” interpretation, it could have used that exact phrasing.
Justice Kagan also held that Novo’s use code was “patent information submitted by the brand under subsection (b) or (c)” for the purposes of the act. She pointed out that the use code describes the methods of use claimed in a patent, and must qualify as “patent information” under any ordinary understanding of that phrase. Looking to the Court’s precedent, Justice Kagan determined that information “submitted under” a federal law suggests doing so in furtherance of or in compliance with a comprehensive scheme of regulation. Justice Kagan noted that subsections (b) and (c) provide the basis for the regulation requiring brands to submit use codes and dictate the form of those submissions; thus, a brand use code is “submitted under” sections (b) and (c). She rejected Novo’s argument that congress only intended to allow generic drug marketers to correct improperly numbered or listed patents.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
CARACO PHARMACEUTICAL LABORATORIES, LTD., et al., PETITIONERS v. NOVO NORDISK A/S et al.
on writ of certiorari to the united states court of appeals for the federal circuit
[April 17, 2012]
Justice Kagan delivered the opinion of the Court.
When the Food and Drug Administration (FDA) evaluates an application to market a generic drug, it considers whether the proposed drug would infringe a patent held by the manufacturer of the brand-name version. To assess that matter, the FDA requires brand manufacturers to submit descriptions of the scope of their patents, known as use codes. The FDA does not attempt to determine if that information is accurate. Rather, the FDA assumes that it is so and decides whether to approve a generic drug on that basis. As a result, the breadth of the use code may make the difference between approval and denial of a generic company’s application.
In this case, we consider whether Congress has authorized a generic company to challenge a use code’s accuracy by bringing a counterclaim against the brand manufacturer in a patent infringement suit. The relevant statute provides that a generic company “may assert a counterclaim seeking an order requiring the [brand manufacturer] to correct or delete the patent information [it] submitted . . . under [two statutory subsections] on the ground that the patent does not claim . . . an approved method of using the drug.” 117Stat. 2452, 21 U. S. C. §355(j)(5)(C)(ii)(I). We hold that a generic manufacturer may employ this provision 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.I A
The FDA regulates the manufacture, sale, and labeling of prescription drugs under a complex statutory scheme. To begin at the beginning: When a brand manufacturer wishes to market a novel drug, it must submit a new drug application (NDA) to the FDA for approval. The NDA must include, among other things, a statement of the drug’s components, scientific data showing that the drug is safe and effective, and proposed labeling describing the uses for which the drug may be marketed. See §§355(b)(1), (d). The FDA may approve a brand-name drug for multiple methods of use—either to treat different conditions or to treat the same condition in different ways.
Once the FDA has approved a brand manufacturer’s drug, another company may seek permission to market a generic version pursuant to legislation known as the Hatch-Waxman Amendments. See Drug Price Competition and Patent Term Restoration Act of 1984, 98Stat. 1585. Those amendments allow a generic competitor to file an abbreviated new drug application (ANDA) piggy-backing on the brand’s NDA. Rather than providing independent evidence of safety and efficacy, the typical ANDA shows that the generic drug has the same active ingredients as, and is biologically equivalent to, the brand-name drug. See §§355(j)(2)(A)(ii), (iv). As we have previously recognized, this process is designed to speed the introduction of low-cost generic drugs to market. See Eli Lilly & Co. v. Medtronic, Inc., 496 U. S. 661, 676 (1990) .
Because the FDA cannot authorize a generic drug that would infringe a patent, the timing of an ANDA’s approval depends on the scope and duration of the patents covering the brand-name drug. Those patents come in different varieties. One type protects the drug compound itself. Another kind—the one at issue here—gives the brand manufacturer exclusive rights over a particular method of using the drug. In some circumstances, a brand manufacturer may hold such a method-of-use patent even after its patent on the drug compound has expired.
To facilitate the approval of generic drugs as soon as patents allow, the Hatch-Waxman Amendments and FDA regulations direct brand manufacturers to file information about their patents. The statute mandates that a brand submit in its NDA “the patent number and the expiration date of any patent which claims the drug for which the [brand] submitted the [NDA] or which claims a method of using such drug.” §§355(b)(1). And the regulations issued under that statute require that, once an NDA is approved, the brand provide a description of any method-of-use patent it holds. See 21 CFR §§314.53(c)(2)(ii)(P)(3), (e) (2011). That description is known as a use code, and the brand submits it on FDA Form 3542. As later discussed, the FDA does not attempt to verify the accuracy of the use codes that brand manufacturers supply. It simply publishes the codes, along with the corresponding patent numbers and expiration dates, in a fat, brightly hued volume called the Orange Book (less colorfully but more officially denominated Approved Drug Products with Therapeutic Equivalence Evaluations).
After consulting the Orange Book, a company filing an ANDA must assure the FDA that its proposed generic drug will not infringe the brand’s patents. When no patents are listed in the Orange Book or all listed patents have expired (or will expire prior to the ANDA’s approval), the generic manufacturer simply certifies to that effect. See 21 U. S. C. §§355(j)(2)(A)(vii)(I)–(III). Otherwise, the applicant has two possible ways to obtain approval.
One option is to submit a so-called section viii statement, which asserts that the generic manufacturer will market the drug for one or more methods of use not covered by the brand’s patents. See §355(j)(2)(A)(viii). A section viii statement is typically used when the brand’s patent on the drug compound has expired and the brand holds patents on only some approved methods of using the drug. If the ANDA applicant follows this route, it will propose labeling for the generic drug that “carves out” from the brand’s approved label the still-patented methods of use. See 21 CFR §314.94(a)(8)(iv). The FDA may approve such a modified label, see §314.127(a)(7), as an exception to the usual rule that a generic drug must bear the same label as the brand-name product, see 21 U. S. C. §§355(j)(2)(A)(v), (j)(4)(G). FDA acceptance of the carve-out label allows the generic company to place its drug on the market (assuming the ANDA meets other requirements), but only for a subset of approved uses—i.e., those not covered by the brand’s patents.
Of particular relevance here, the FDA will not approve such an ANDA if the generic’s proposed carve-out label overlaps at all with the brand’s use code. See 68 Fed. Reg. 36682–36683 (2003). The FDA takes that code as a given: It does not independently assess the patent’s scope or otherwise look behind the description authored by the brand. According to the agency, it lacks “both [the] expertise and [the] authority” to review patent claims; although it will forward questions about the accuracy of a use code to the brand, 1 its own “role with respect to patent listing is ministerial.” Id., at 36683; see ibid. (“A fundamental assumption of the Hatch-Waxman Amendments is that the courts are the appropriate mechanism for the resolution of disputes about the scope and validity of patents”). 2 Thus, whether section viii is available to a generic manufacturer depends on how the brand describes its patent. Only if the use code provides sufficient space for the generic’s proposed label will the FDA approve an ANDA with a section viii statement.
The generic manufacturer’s second option is to file a so-called paragraph IV certification, which states that a listed 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)(IV). A generic manufacturer will typically take this path in either of two situations: if it wants to market the drug for all uses, rather than carving out those still allegedly under patent; or if it discovers, as described above, that any carve-out label it is willing to adopt cannot avoid the brand’s use code. Filing a paragraph IV certification means provoking litigation. The patent statute treats such a filing as itself an act of infringement, which gives the brand an immediate right to sue. See 35 U. S. C. §271(e)(2)(A). Assuming the brand does so, the FDA generally may not approve the ANDA until 30 months pass or the court finds the patent invalid or not infringed. See 21 U. S. C. §355(j)(5)(B)(iii). Accordingly, the paragraph IV process is likely to keep the generic drug off the market for a lengthy period, but may eventually enable the generic company to market its drug for all approved uses.
In the late 1990’s, evidence mounted that some brands were exploiting this statutory scheme to prevent or delay the marketing of generic drugs, and the Federal Trade Commission (FTC) soon issued a study detailing these anticompetitive practices. See FTC, Generic Drug Entry Prior to Patent Expiration: An FTC Study, pp. iii–vi (July 2002) (hereinafter FTC Study). That report focused attention on brands’ submission of inaccurate patent information to the FDA. In one case cited by the FTC, Mylan Pharmaceuticals, Inc. v. Thompson, 268 F. 3d 1323 (CA Fed. 2001), a brand whose original patent on a drug was set to expire listed a new patent ostensibly extending its rights over the drug, but in fact covering neither the compound nor any method of using it. The FDA, as was (and is) its wont, accepted the listing at its word and accordingly declined to approve a generic product. The generic manufacturer sued to delete the improper listing from the Orange Book, but the Federal Circuit held that the Hatch-Waxman Amendments did not allow such a right of action. See id., at 1330–1333. As the FTC noted, that ruling meant that the only option for generic manufacturers in Mylan’s situation was to file a paragraph IV certification (triggering an infringement suit) and then wait out the usual 30-month period before the FDA could approve an ANDA. See FTC Study 40–45.
Congress responded to these abuses by creating a mechanism, in the form of a legal counterclaim, for generic manufacturers to challenge patent information a brand has submitted to the FDA. See Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 117Stat. 2452. The provision authorizes an ANDA applicant sued for patent infringement to
“assert a counterclaim seeking an order requiring the [brand] to correct or delete the patent information submitted by the [brand] under subsection (b) or (c) [of §355] on the ground that the patent does not claim either—
“(aa) the drug for which the [brand’s NDA] was approved; or
“(bb) an approved method of using the drug.” 21 U. S. C. §355(j)(5)(C)(ii)(I).
The counterclaim thus enables a generic competitor to obtain a judgment directing a brand to “correct or delete” certain patent information that is blocking the FDA’s approval of a generic product. This case raises the question whether the counterclaim is available to fix a brand’s use code.B
The parties to this case sell or seek to sell the diabetes drug repaglinide. Respondents (collectively Novo) manufacture Prandin, the brand-name version of the drug. The FDA has approved three uses of Prandin to treat diabetes: repaglinide by itself; repaglinide in combination with metformin; and repaglinide in combination with thiazolidinediones (TZDs). Petitioners (collectively Caraco) wish to market a generic version of the drug for two of those uses.
Novo originally owned a patent for the repaglinide compound, known as the ’035 patent, but it expired in 2009. In 2004, Novo also acquired a method-of-use patent for the drug, called the ’358 patent, which does not expire until 2018. That patent—the one at issue here—claims a “method for treating [diabetes by] administering . . . repaglinide in combination with metformin.” 601 F. 3d 1359, 1362 (CA Fed. 2010). Thus, Novo currently holds a patent for one of the three FDA-approved uses of repaglinide—its use with metformin. But Novo holds no patent for the use of repaglinide with TZDs or its use alone.
In 2005, Caraco filed an ANDA seeking to market a generic version of repaglinide. At that time, the Orange Book entry for Prandin listed both the ’035 patent (the drug compound) and the ’358 patent (the use of the drug with metformin). Caraco assured the FDA that it would not market its generic drug until the ’035 patent expired, thus making that patent irrelevant to the FDA’s review of the ANDA. Caraco filed a paragraph IV certification for the remaining, ’358 patent, stating that it was “invalid or [would] not be infringed.” §355(j)(2)(A)(vii)(IV); see supra, at 5. In accord with the patent statute, Novo treated this filing as an act of infringement and brought suit.
When Caraco filed its ANDA, Novo’s use code for the ’358 patent represented that the patent covered “ ‘[u]se of repaglinide in combination with metformin to lower blood glucose.’ ” 601 F. 3d, at 1362–1363. The FDA therefore advised Caraco that if it did not seek to market repaglinide for use with metformin, it could submit a section viii statement. That would allow Caraco, assuming its ANDA was otherwise in order, to market its generic drug for the other two uses. Caraco took the FDA’s cue and in 2008 submitted a section viii statement, with proposed labeling carving out Novo’s patented metformin therapy. See App. 166–176.
Before the FDA took further action, however, Novo changed its use code for the ’358 patent. The new use code describes “ ‘[a] method for improving glycemic control in adults with type 2 diabetes.’ ” 3 601 F. 3d, at 1363. Because that code indicates that the ’358 patent protects all three approved methods of using repaglinide to treat diabetes, Caraco’s proposed carve-out of metformin therapy was no longer sufficient; even with that exclusion, Caraco’s label now overlapped with Novo’s use code on the other two uses. And Caraco could not carve out those uses as well, because at that point nothing would be left for it to market. The FDA has approved repaglinide for only three uses, and Novo’s use code encompassed them all. The FDA accordingly informed Caraco that it could no longer employ section viii to bring its drug to market.
Caraco responded to Novo’s new, preclusive use code by filing a statutory counterclaim in the ongoing infringement suit. The counterclaim sought an order requiring Novo to “correct” its use code “on the ground that [the ’358] patent does not claim” two approved methods of using repaglinide—alone and in combination with TZDs. §355(j)(5)(C)(ii)(I); see supra, at 6–7. That order would permit the FDA to accept Caraco’s proposed carve-out label and approve the company’s ANDA. The District Court granted summary judgment to Caraco, enjoining Novo to “correct . . . its inaccurate description of the ’358 patent” by submitting a new Form 3542 to the FDA that would “reinstat[e] its former” use code. App. to Pet. for Cert. 65a–66a.
The Court of Appeals reversed, holding that Caraco lacked “a statutory basis to assert a counterclaim.” 601 F. 3d, at 1360. The court first read the statutory phrase “the patent does not claim . . . an approved method of using the drug” to require Caraco to demonstrate that the ’358 patent does not claim any approved method of use. See id., at 1365 (“ ‘[A]n approved method’ means ‘any approved method’ ”). Because the patent covers one approved method of use—repaglinide in combination with metformin—the counterclaim was unavailable. The court further ruled that the counterclaim provision does not reach use codes because they are not “patent information submitted by the [brand] under subsection (b) or (c).” On the Federal Circuit’s view, that information consists only of the patent number and expiration date. See id., at 1366–1367. Judge Dyk dissented. He would have read the phrase “the patent does not claim . . . an approved method of using the drug” to include situations where, as here, the use code wrongly indicates that the patent covers one or more particular approved methods of use. See id., at 1376–1378. And he would have construed “patent information submitted . . . under subsection (b) or (c)” to include use codes. See id., at 1370–1376. 4
We granted certiorari, 564 U. S. ___ (2011), and now reverse.II
We begin “where all such inquiries must begin: with the language of the statute itself.” United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 241 (1989) . This case requires us to construe two statutory phrases. First, we must decide when a “patent does not claim . . . an approved method of using” a drug. Second, we must determine the content of “patent information submitted . . . under subsection (b) or (c)” of §355. We consider both of those questions against the backdrop of yet a third statutory phrase, providing that the remedy for a prevailing counterclaimant is an order requiring the brand “to correct or delete” that patent information. And we consider each question in the context of the entire statute. See Robinson v. Shell Oil Co., 519 U. S. 337, 341 (1997) (Statutory interpretation focuses on “the language itself, the specific context in which that language is used, and the broader context of the statute as a whole”). We cannot say that the counterclaim clause is altogether free of ambiguity. But when we consider statutory text and context together, we conclude that a generic manufacturer in Caraco’s position can use the counterclaim. 5A
An ANDA applicant sued for patent infringement may bring a counterclaim “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 parties debate the meaning of this language. Novo (like the Federal Circuit) reads “not an” to mean “not any,” contending that “the counterclaim is available only if the listed patent does not claim any (or, equivalently, claims no) approved method of using the drug.” Brief for Respondents 29 (internal quotation marks omitted). By that measure, Caraco may not bring a counterclaim because Novo’s ’358 patent claims the use of repaglinide with metformin. In contrast, Caraco reads “not an” to mean “not a particular one,” so that the statute permits a counterclaim whenever the patent does not claim a method of use for which the ANDA applicant seeks to market the drug. On that view, the counterclaim is available here—indeed, is available twice over—because the ’358 patent does not claim the use of repaglinide with TZDs or its use alone.
Truth be told, the answer to the general question “What does ‘not an’ mean?” is “It depends”: The meaning of the phrase turns on its context. See Johnson v. United States, 559 U. S. ___, ___ (2010) (slip op., at 5) (“Ultimately, context determines meaning”). “Not an” sometimes means “not any,” in the way Novo claims. If your spouse tells you he is late because he “did not take a cab,” you will infer that he took no cab at all (but took the bus instead). If your child admits that she “did not read a book all summer,” you will surmise that she did not read any book (but went to the movies a lot). And if a sports-fan friend bemoans that “the New York Mets do not have a chance of winning the World Series,” you will gather that the team has no chance whatsoever (because they have no hitting). But now stop a moment. Suppose your spouse tells you that he got lost because he “did not make a turn.” You would understand that he failed to make a particular turn, not that he drove from the outset in a straight line. Suppose your child explains her mediocre grade on a college exam by saying that she “did not read an assigned text.” You would infer that she failed to read a specific book, not that she read nothing at all on the syllabus. And suppose a lawyer friend laments that in her last trial, she “did not prove an element of the offense.” You would grasp that she is speaking not of all the elements, but of a particular one. The examples could go on and on, but the point is simple enough: When it comes to the meaning of “not an,” context matters. 6
And the statutory context here supports Caraco’s position. As described earlier (and as Congress understood), a single drug may have multiple methods of use, only one or some of which a patent covers. See, e.g., 21 U. S. C. §355(b)(1) (requiring that an NDA applicant file information about “any patent which claims the drug . . . or which claims a method of using such drug” (emphasis added)). The Hatch-Waxman Amendments authorize the FDA to approve the marketing of a generic drug for particular unpatented uses; and section viii provides the mechanism for a generic company to identify those uses, so that a product with a label matching them can quickly come to market. The statutory scheme, in other words, contemplates that one patented use will not foreclose marketing a generic drug for other unpatented ones. Within that framework, the counterclaim naturally functions to challenge the brand’s assertion of rights over whichever discrete use (or uses) the generic company wishes to pursue. That assertion, after all, is the thing blocking the generic drug’s entry on the market. The availability of the counterclaim thus matches the availability of FDA approval under the statute: A company may bring a counterclaim to show that a method of use is unpatented because establishing that fact allows the FDA to authorize a generic drug via section viii.
Consider the point as applied to this case. Caraco wishes to market a generic version of repaglinide for two (and only two) uses. Under the statute, the FDA could approve Caraco’s application so long as no patent covers those uses, regardless whether a patent protects yet a third method of using the drug. Novo agrees that Caraco could bring a counterclaim if Novo’s assertion of patent protection for repaglinide lacked any basis—for example, if Novo held no patent, yet claimed rights to the pair of uses for which Caraco seeks to market its drug. But because Novo has a valid patent on a different use, Novo argues that Caraco’s counterclaim evaporates. And that is so even though, once again, Caraco has no wish to market its product for that patented use and the FDA stands ready, pursuant to the statute, to approve Caraco’s product for the other two. To put the matter simply, Novo thinks the counterclaim disappears because it has a patent for a method of use in which neither Caraco nor the FDA is interested at all. “It would take strong evidence to persuade us that this is what Congress wrought.” Eli Lilly, 496 U. S., at 673. That “not an” sometimes (but sometimes not) means “not any” is not enough.
Novo argues that our reading must be wrong because Congress could have expressly “impose[d] additional . . . qualifications” on the term “an approved method of us[e]”—and indeed did so in another place in the statute. Brief for Respondents 31; 21 U. S. C. §355(j)(5)(C)(ii)(I). Novo points here to section viii itself, which applies when the brand’s patent “does not claim a use for which the [ANDA] applicant is seeking approval.” §355(j)(2)(A)(viii) (emphasis added). But the mere possibility of clearer phrasing cannot defeat the most natural reading of a statute; if it could (with all due respect to Congress), we would interpret a great many statutes differently than we do. Nor does Congress’s use of more detailed language in another provision, enacted years earlier, persuade us to put the counterclaim clause at odds with its statutory context. That is especially so because we can turn this form of argument back around on Novo. Congress, after all, could have more clearly expressed Novo’s proposed meaning in the easiest of ways—by adding a single letter to make clear that “not an” really means “not any.” And indeed, Congress used a “not any” construction in the very next subclause, enacted at the very same time. See §355(j)(5)(C)(ii)(II) (“Subclause (I) does not authorize the assertion of a claim . . . in any [other] civil action”). So if we needed any proof that Congress knew how to say “not any” when it meant “not any,” here we find it. We think that sees, raises, and bests Novo’s argument.
Our more essential point, though, has less gamesmanship about it: We think that the “not any” construction does not appear in the relevant counterclaim provision because Congress did not mean what Novo wishes it had. And we think that is so because Congress meant (as it usually does) for the provision it enacted to fit within the statutory scheme—here, by facilitating the approval of non-infringing generic drugs under section viii.B
Novo contends that Caraco’s counterclaim must fail for another, independent reason: On its view (as on the Federal Circuit’s), the counterclaim does not provide a way to correct use codes because they are not “patent information submitted by the [brand] under subsection (b) or (c)” of §355. Once again, we disagree.
The statute does not define “patent information,” but a use code must qualify. It describes the method of use claimed in a patent. See 21 CFR §§314.53(c)(2)(ii)(P)(3), (e). That fits under any ordinary understanding of the language. 7
The more difficult question arises from the “submitted under” phrase. The subsections mentioned there—(b) and (c) of §355—require an NDA applicant to submit specified information: “the patent number and the expiration date of any patent” claiming the drug or a method of its use. 21 U. S. C. §§355(b)(1), (c)(2). According to Novo, only that information comes within the counterclaim provision. But subsections (b) and (c) as well govern the regulatory process by which brands provide additional patent information to the FDA, both before and after an NDA is approved. In particular, those subsections provide the basis for the regulation requiring brands to submit use codes, see 21 CFR §314.53; in issuing that regulation, the FDA noted that “[o]ur principal legal authority . . . is section 505 of the act [codified at §355], in conjunction with our general rulemaking authority.” 68 Fed. Reg. 36697–36698 (specifically referring to subsections (b) and (c)). And the form (Form 3542) on which brands submit their use codes states that the information appearing there is “provided in accordance with Section (b) and (c).” App. 97. So use codes fall within the counterclaim’s ambit if the phrase “submitted under” reaches filings that not only subsections (b) and (c) themselves, but also their implementing regulations require.
Several of our cases support giving “under” this broad meaning. For example, in Eli Lilly, 496 U. S., at 665–668, we examined a similar statutory reference to the “submission of information under a Federal law which regulates the manufacture, use, or sale of drugs,” 35 U. S. C. §271(e)(1). We noted there that submitting information “under a Federal law” suggests doing so “in furtherance of or compliance with a comprehensive scheme of regulation.” 496 U. S., at 667. Likewise, in Ardestani v. INS, 502 U. S. 129, 135 (1991) , we held that a regulatory proceeding “under section 554,” 5 U. S. C. §504(b)(1)(C)(i), meant any proceeding “subject to,” “governed by,” or conducted “by reason of the authority of” that statutory provision.
So too here. “Patent information submitted . . . under subsection (b) or (c)” most naturally refers to patent information provided as part of the “comprehensive scheme of regulation” premised on those subsections. Eli Lilly, 496 U. S., at 667. It includes everything (about patents) that the FDA requires brands to furnish in the proceedings “subject to,” “governed by,” or conducted “by reason of the authority of” §§355(b) and (c). Ardestani, 502 U. S., at 135. The breadth of the term “under” becomes particularly clear when compared with other phrases—“described in” and “prescribed by”—appearing in neighboring provisions. See, e.g., 21 U. S. C. §355(c)(2) (“patent information described in subsection (b)”); §355(d)(6) (“patent information prescribed by subsection (b)”). Those phrases denote a patent number and expiration date and nothing more. In contrast, the word “under” naturally reaches beyond that most barebones information to other patent materials the FDA demands in the regulatory process.
Once again, that congressional choice fits the broader statutory context. Use codes are pivotal to the FDA’s implementation of the Hatch-Waxman Amendments—and no less so because a regulation, rather than the statute itself, requires their submission. Recall that those Amendments instruct the FDA (assuming other requirements are met) to approve an ANDA filed with a section viii statement when it proposes to market a drug for only unpatented methods of use. To fulfill that charge, the FDA must determine whether any patent covers a particular method of use; and to do that, the agency (which views itself as lacking expertise in patent matters, see supra, at 4–5, and n. 2) relies on the use codes submitted in the regulatory process. See 68 Fed. Reg. 36682–36683. An overbroad use code therefore throws a wrench into the FDA’s ability to approve generic drugs as the statute contemplates. So it is not surprising that the language Congress used in the counterclaim provision sweeps widely enough to embrace that filing.C
Another aspect of the counterclaim provision—its description of available remedies—dispatches whatever remains of Novo’s arguments. According to the statute, a successful claimant may obtain an order requiring the brand to “correct or delete” its patent information. §355(j)(5)(C)(ii)(I). Our interpretation of the statute gives content to both those remedies: It deletes a listing from the Orange Book when the brand holds no relevant patent and corrects the listing when the brand has misdescribed the patent’s scope. By contrast, Novo’s two arguments would all but read the term “correct” out of the statute.
Consider first how Novo’s an-means-any contention would accomplish that result. Recall that on Novo’s view, a counterclaim can succeed only if the patent challenged does not claim either the drug or any approved method of using it. See supra, at 11. But when a generic manufacturer makes that showing, the remedy must be to “delete” the listing; no correction would be enough. Novo agrees with that proposition; “[a]t bottom,” Novo avers, “the counterclaim is a delisting provision.” Brief for Respondents 20. But that raises the obvious question: Why did Congress also include the term “correct” in the statute?
Novo can come up with just one answer: The counterclaim, it proposes, can correct erroneous patent numbers. Imagine, for example, that Novo mistakenly entered the number ’359, instead of ’358, when submitting information about its repaglinide patent for publication in the Orange Book. Then, Novo suggests, Caraco could bring a counterclaim to challenge the inaccurate listing (on the ground that ’359 does not claim any method of use), and the remedy would be “correct[ion]” (substituting an 8 for a 9). But we think Novo’s admission that this scenario would be “unusual,” Tr. of Oral Arg. 41, considerably understates the matter. As Novo concedes, brands have every incentive to provide the right patent number in the first place, and to immediately rectify any error brought to their attention. See id., at 40–41. By doing so, they place both generic companies and the FDA on notice of their patents and thereby prevent infringement. And conversely, generics have little or no incentive to bring a counterclaim that will merely replace one digit in the Orange Book with another. So we doubt Congress created a legal action to “correct” patent information just to fix such scrivener’s errors. See, e.g., TRW Inc. v. Andrews, 534 U. S. 19, 31 (2001) (refusing to adopt an interpretation of a statute that would render a piece of it “insignificant, if not wholly superfluous” (internal quotation marks omitted)). That would have been, in the most literal sense, to make a federal case out of nothing.
The same problem afflicts Novo’s alternative contention—that “patent information submitted . . . under subsection (b) or (c)” includes only numbers and expiration dates (and not use codes). Once again, we cannot think Congress included the remedy of “correct[ion]” so that courts could expunge typos in patent numbers. And not even Novo has proffered a way for the counterclaim to “correct” an erroneous expiration date. Suppose, for example, that a brand incorrectly lists the expiration date of a valid patent as 2018 rather than 2015. The counterclaim would be useless: It authorizes a remedy only “on the ground that” the listed patent does not claim the drug or an approved method of using it—and notwithstanding the wrong expiration date, this patent does so. Alternatively, suppose the brand lists a patent as having a 2018 expiration date when in fact the patent has already lapsed. Then, a generic manufacturer could bring a counterclaim alleging that the patent no longer claims the drug or a method of using it—but the appropriate remedy would be deletion, not correction, of the brand’s listing. Novo’s reading of “patent information,” like its reading of “not an,” effectively deletes the term “correct” from the statute.III
Novo finally advances two arguments relating to the counterclaim’s drafting history. Neither contention, however, overcomes the statutory text and context. Indeed, consideration of the provision’s background only strengthens our view of its meaning.A
Novo first contends that our interpretation of the statute “effectively resurrect[s] the scheme rejected by Congress.” Brief for Respondents 44 (quoting Smith v. United States, 507 U. S. 197 , n. 4 (1993)). In 2002, Novo notes, Congress failed to pass a bill that would have required brands to file specified “patent information,” including, for method-of-use patents, a description of “the approved use covered by the [patent] claim.” S. 812, 107th Cong., 2d Sess., §103(a)(1), p. 7 (engrossed bill). That bill would have allowed a generic company to bring its own civil action—not merely a counterclaim in ongoing litigation—to “delete” or “correct” the information filed. Id., at 8. The Senate approved the bill, but the House of Representatives took no action on it. Novo argues that because this failed legislation would have allowed a generic company to challenge overbroad descriptions of a patent, we cannot read the statute Congress eventually enacted as doing so.
We disagree. We see no reason to assume, as Novo does, that Congress rejected S. 812 because it required brands to submit patent information beyond a number and expiration date. Indeed, Novo’s argument highlights the perils of relying on the fate of prior bills to divine the meaning of enacted legislation. “A bill can be proposed for any number of reasons, and it can be rejected for just as many others.” Solid Waste Agency of Northern Cook Cty. v. Army Corps of Engineers, 531 U. S. 159, 170 (2001) ). S. 812 contained numerous items, including a title on importing prescription drugs (no controversy there!), that may have caused its failure. See S. 812, Tit. II. Moreover, what criticism there was of the bill’s mechanism for challenging brands’ patent claims focused not on the specification of “patent information,” but instead on the creation of an independent cause of action—stronger medicine than the counterclaim Congress ultimately adopted. 8 And finally, Novo ignores a likely cause for the redrafting of the provision on submitting information. Between S. 812’s demise and the counterclaim’s enactment, the FDA issued a rule requiring brands to supply material concerning method-of-use patents, including use codes. The drafters of the counterclaim provision knew about that rule, 9 and had no need to duplicate its list of mandated filings. So the drafting history does not support Novo’s conclusion. If anything, the statute’s evolution indicates that Congress determined to enforce the FDA’s new listing provisions, including its use-code requirement, through the new counterclaim.B
Novo next argues that Congress established the counterclaim only to solve the problem raised by the Federal Circuit’s decision in Mylan, 268 F. 3d 1323—the impossibility of deleting an improperly listed patent from the Orange Book. In Mylan, as earlier described, a generic company alleged that a brand had listed a patent that covered neither the approved drug nor any method of using it, and brought an action seeking delisting. See supra, at 6. The Federal Circuit held that no such action was available, even assuming the allegation was true. Because several legislators saw Mylan as “exemplif[ying]” brands’ “perceived abuse” of the FDA’s patent listing practices, Brief for Respondents 35, Novo contends that we should construe the counterclaim provision to aid only a generic company that “finds itself in the same position as Mylan was in Mylan,” Supp. Brief in Opposition 5–6.
Once again, we think not. Maybe Mylan triggered the legislative effort to enact a counterclaim, or maybe it didn’t: By the time Congress acted, it also had at hand an FTC study broadly criticizing brands’ patent listings and an FDA rule designed to address the very same issue. See supra, at 6, 21. But even assuming Mylan “prompted the proposal” of the counterclaim, “whether that alone accounted for its enactment is quite a different question.” Eli Lilly, 496 U. S., at 670, n. 3 (emphasis deleted). Here, we think Mylan alerted Congress to a broader problem—that generic companies generally had no avenue to challenge the accuracy of brands’ patent listings, and that the FDA therefore could not approve proper applications to bring inexpensive drugs to market. The proof of that lies in the statute itself (where the best proof of what Congress means to address almost always resides). As we have described, the statute’s text and context demonstrate that the counterclaim is available not only (as in Mylan) when the patent listing is baseless, but also (as here) when it is overbroad. See supra, at 10–20. In particular, Congress’s decision to allow a counterclaimant to seek “correct[ion]” of patent information explodes Novo’s theory, because the remedy for a Mylan-type impropriety is complete delisting.
And to make matters still easier, Congress’s equation of the two situations—the one in Mylan and the one here—makes perfect sense. Whether a brand lists a patent that covers no use or describes a patent on one use as extending to others, the brand submits misleading patent information to the FDA. In doing so, the brand equally exploits the FDA’s determination that it cannot police patent claims. And the brand’s action may in either case delay or block approval of a generic drug that infringes no patent—and that under the statute should go to market. See supra, at 4. That is the danger Caraco faces here, as much as it was the threat in Mylan: Novo seeks to preclude Caraco from selling repaglinide for unpatented uses until 2018, when Novo’s patent on a different use expires.
Indeed, the need for the counterclaim is greater here than in Mylan. When a brand lists a patent that covers no use, a generic company has a pathway aside from the counterclaim to challenge the listing. As described earlier, the company may make a paragraph IV certification stating that the listed patent “is invalid or will not be infringed” by the generic drug. 21 U. S. C. §355(j)(2)(A)(vii)(IV); see supra, at 5. If the brand sues, the generic company can argue that its product would not infringe the patent. Using the counterclaim may enable a generic manufacturer to obtain delisting more quickly, see Tr. of Oral Arg. 54; but even without it, the company can eventually get a judgment of non-infringement enabling the FDA to approve its ANDA. In contrast, where (as here) a brand files an overbroad use code, a generic company cannot use paragraph IV litigation to that end. A paragraph IV certification (unlike a section viii statement) requires the generic company to propose labeling identical to the brand’s; it cannot carve out any uses. See supra, at 4. And that proposed label will necessarily infringe because it will include the use(s) on which the brand does have a patent. So here, a paragraph IV suit cannot lead to a judgment enabling FDA approval; the counterclaim offers the only route to bring the generic drug to market for non-infringing uses. Novo’s view eliminates the counterclaim where it has the greatest value.IV
The statutory counterclaim we have considered enables courts to resolve patent disputes so that the FDA can fulfill its statutory duty to approve generic drugs that do not infringe patent rights. The text and context of the provision demonstrate that a generic company can employ the counterclaim to challenge a brand’s overbroad use code. We accordingly hold that 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.
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
1 Under the FDA’s regulations, any person may dispute the accuracy of patent information listed in the Orange Book by notifying the agency in writing. See 21 CFR §314.53(f). The FDA will then request that the brand verify the information, but will make no changes “[u]nless the [brand] withdraws or amends” the listing. Ibid.
2 Several courts have affirmed the FDA’s view of its ministerial role. See, e.g., Apotex, Inc. v. Thompson, 347 F. 3d 1335, 1349 (CA Fed. 2003); aaaiPharma v. Thompson, 296 F. 3d 227, 242–243 (CA4 2002). That question is not before us, and we express no view on it.
3 Novo asserts that it made the change so that its use code would mirror its label, which the FDA had just asked it to alter. See Brief for Respondents 14. But the FDA, in calling for new labeling, neither requested nor required Novo to amend its use code. And indeed, Novo’s counsel conceded before the Federal Circuit that Novo modified its use code in part as “ ‘a response to the [FDA’s] section viii’ ” suggestion. 601 F. 3d, at 1380–1381.
4 On remand from the Federal Circuit’s decision, the District Court determined that the ’358 patent was invalid and unenforceable. See 775 F. Supp. 2d 985 (ED Mich. 2011). The Federal Circuit stayed Novo’s appeal from that judgment pending the decision here.
5 Before proceeding to the merits, we dispose of a recently raised jurisdictional argument. Novo now contends that the federal courts lost subject-matter jurisdiction over this infringement action (including the counterclaim) at the moment Caraco filed its section viii statement. On Novo’s theory, such a statement (unlike a paragraph IV certification) does not count as an act of infringement under the patent statute, see 35 U. S. C. §271(e)(2)(A), and so cannot provide a jurisdictional basisfor the suit. But that argument is wrong even assuming (as Novo con-tends) that Caraco’s section viii filing terminated its paragraph IV certification and that a section viii filing is not an act of infringement. The want of an infringing act is a merits problem, not a jurisdictional one. Nothing in the section of the statute defining certain filings as acts of infringement suggests anything to the contrary. And “we are not inclined to interpret statutes as creating a jurisdictional bar when they are not framed as such.” Stern v. Marshall, 564 U. S. ___, ___ (2011) (slip op., at 13). In the absence of such a bar, the federal courts have jurisdiction over this suit for a single, simple reason: It “ar[ose] under a[n] Act of Congress relating to patents.” 28 U. S. C. §1338(a).
6 For this reason, we find Novo’s reliance on the occasional dictionary definition of “a[n]” unconvincing. Although “an” sometimes means “any” when used in negative structures, see, e.g., Microsoft Encarta College Dictionary 1 (2001) (fifth definition), it sometimes does not. Cf. FCC v. AT&T Inc., 562 U. S. ___, ___ (2011) (slip. op., at 3–5) (rejecting a proposed definition of “personal” because it did not always hold in ordinary usage and the statutory context suggested it did not apply).
7 Novo’s only counter is to redefine a use code. Novo argues that a use code need not be tied to the patent at all—that “[t]he relevant regulation requires [NDA] applicants to provide [only] ‘a description of each approved method of use or indication.’ ” Brief for Respondents 48 (quoting 21 CFR §314.53(c)(2)(ii)(P)(1)). Because an “indication” refers generally to what a drug does (here, treat diabetes), see §201.57(c)(2), Novo claims that a use code may sweep more broadly than the patent. But that is incorrect. First, Novo does not cite the regulations that specify the information required for publication—i.e., use codes. See §314.53(c)(2)(ii)(P)(3) (requiring a “description of the patented method of use as required for publication”); §314.53(e) (“[F]or each use patent,” FDA will publish “the approved indications or other conditions of use covered by a patent”). Those provisions (whether referring to methods of use, conditions of use, or indications) all demand a description of the patent. And second, even the provision Novo cites—which mandates the submission of additional material, not listed in the Orange Book—ties information about indications to patent coverage; that regulation requires (when quoted in full) that the brand provide “a description of each approved method of use or indication and related patent claim of the patent being submitted.” §314.53(c)(2)(ii)(P)(1).
8 See, e.g., 148 Cong. Rec. 15424 (2002) (remarks of Sen. Gregg) (“Probably the most significant issue is the fact that it creates a new cause of action”); id., at 15431–15432 (remarks of Sen. Grassley) (similar); id., at 14434 (remarks of Sen. Hatch) (similar).
9 See, e.g., Hearings on Barriers to Entry in the Pharmaceutical Marketplace before the Senate Committee on the Judiciary, 108th Cong., 1st Sess., 5–8 (2003) (statement of Daniel Troy, Chief Counsel to the FDA); id., at 19 (statement of Sen. Schumer) (“The bill provides a critical complement to the work FDA has done in clarifying its regulations on patent listing, but it goes much further”).
SUPREME COURT OF THE UNITED STATES
CARACO PHARMACEUTICAL LABORATORIES, LTD., et al., PETITIONERS v. NOVO NORDISK A/S et al.
on writ of certiorari to the united states court of appeals for the federal circuit
[April 17, 2012]
Justice Sotomayor, concurring.
The Court today interprets the counterclaim set forth in 21 U. S. C. §355(j)(5)(C)(ii)(I) to permit generic manufacturers to force brand manufacturers to “correct” inaccurate use codes. While I too find the counterclaim not “free of ambiguity,” ante, at 10, I join the Court’s opinion because I agree this is the most sensible reading in light of the existing regulatory scheme. I write separately to add the following observations.I
I first underscore that the counterclaim can only lessen the difficulties created by an overly broad use code; it cannot fix them. The statutory scheme is designed to speed the introduction of low-cost generic drugs to market. See ante, at 2 (citing Eli Lilly & Co. v. Medtronic, Inc., 496 U. S. 661, 676 (1990) ). To that end, the statute provides for the rapid approval of a drug that a generic manufacturer seeks to market for unpatented methods of use. The manufacturer need only submit an abbreviated new drug application (ANDA) with a section viii statement and a proposed label that “carves out” from the brand manufacturer’s label any patented methods of use. See ante, at 4. So long as the use code is not overly broad (and all else is in order), FDA may approve the application without requiring any further steps relating to the patent, and the generic drug may reach the public without undue delay. See ibid.
An overly broad use code “throws a wrench” into that scheme. Ante, at 18. The reason why is simple: FDA relies on use codes in determining whether to approve an ANDA, but it refuses to evaluate the accuracy of those use codes. See ante, at 4–5. Thus, if the use code overlaps with the generic manufacturer’s proposed carve-out label (i.e., if the use code is overly broad), FDA will not approve an ANDA with a section viii statement. See ibid.
After today’s opinion, the generic manufacturer can re-spond to this situation by taking the following steps: sub-mit an ANDA with a paragraph IV certification (which requires a proposed label materially identical to the brand manufacturer’s label, see ante, at 24), wait for the brand manufacturer to institute suit, file a counterclaim, litigate the counterclaim, and, if successful in securing the correction of the use code, return to the start of the process and do what it always wanted to do—file an ANDA with a section viii statement and a carve-out label.
The problem with this process is twofold. First, it results in delay and expense the statutory scheme does not envision. Second, there is no guarantee the process will work. It depends on the brand manufacturer initiating paragraph IV litigation, but it is not obvious the brand will have any incentive to do so. In light of today’s holding, the upshot of such litigation will be the correction of the use code through the assertion of a counterclaim—an outcome that is desirable, to be sure, for the generic manufacturer, but perhaps less so for the brand manufacturer.
Meanwhile, it is not clear what happens if the brand manufacturer does not file suit. FDA may approve the generic manufacturer’s application, see 21 U. S. C. §355(j)(5)(B)(iii), “without prejudice to infringement claims the patent owner might assert when the ANDA applicant produces or markets the generic drug.” Brief for United States as Amicus Curiae 6 (hereinafter United States Brief). But the generic manufacturer, having been forced to proceed with a paragraph IV certification, will have se-cured approval to market a drug with a label materially identical to the brand manufacturer’s. That is not a position I imagine a generic manufacturer wants to be in: As the Solicitor General’s Office informed us at argument, “[i]t would be inducement of infringement to sell a product with labeling that suggests that the product be used for a patented method of use.” Tr. of Oral Arg. 24; see also United States Brief 32 (noting that in this situation, if a generic manufacturer proceeded with a paragraph IV certification, “[s]o long as the [new drug application (NDA)] holder’s patent covers some approved method of using the approved drug, the proposed labeling will be infringing”).
In short, the counterclaim cannot restore the smooth working of a statutory scheme thrown off kilter by an overly broad use code. At best, it permits the generic manufacturer to do what the scheme contemplates it should do—file an ANDA with a section viii statement—but only after expensive and time-consuming litigation. A fix is in order, but it must come from Congress or FDA.II
Precisely because the regulatory scheme depends on the accuracy and precision of use codes, I find FDA’s guidance as to what is required of brand manufacturers in use codes remarkably opaque. The relevant regulation states simply that a brand manufacturer must provide “[t]he description of the patented method of use as required for publication.” 21 CFR §314.53(c)(2)(ii)(P)(3). The form on which brand manufacturers submit that information provides some additional detail, explaining that “[e]ach approved use claimed by the patent should be separately identified . . . and contain adequate information to assist . . . applicants in determining whether a listed method of use patent claims a use for which the . . . applicant is not seeking approval.” App. to Pet. for Cert. 214a. But it also provides that brand manufacturers may “us[e] no more than 240 total characters including spaces,” id., at 213a, and elsewhere FDA acknowledges “that in some cases 240 characters may not fully describe the use as claimed in the patent.” 68 Fed. Reg. 36683 (2003); see also ibid. (indicating for this reason that use codes “are not meant to substitute for the applicant’s review of the patent”).
Indeed, in some respects we are here today because of FDA’s opacity in describing what is required of brand manufacturers. In its initial NDA filing, Novo submitted a use code for the ’358 patent that was not “overly broad”: It described narrowly the single patented method of use. App. 54–55, 99. Some years later FDA required that Novo amend its label to “[r]eplace all the separate indications” “with the following sentence: ‘Prandin is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus.’ ” Id., at 163–164, 215. Novo then amended its use code to track the new label, id., at 482–486, explaining that the amendment “correspond[ed] with the change in labeling required by FDA,” id., at 483. Novo understood its amended use code to comply with FDA regulations, likely on the ground it pressed before us: that the regulations permit a brand manufacturer to submit for publication in the Orange Book a description of either the patented method of use or the indication (which refers to “what a drug does,” ante, at 15, n. 7). Brief for Respondents 10, 22, 48–50.
For the reasons explained by the Court, see ante, at 15, n. 7, Novo is mistaken. But the company can hardly be faulted for so thinking. The regulations also require submission of “a description of each approved method of use or indication,” 21 CFR §314.53(c)(2)(ii)(P)(1), and the form on which brand manufacturers submit use codes requires “information on the indication or method of use for the Orange Book ‘Use Code’ description.” App. to Pet. for Cert. 213; see also ibid. (explaining brand manufacturers should “[s]ubmit the description of the approved indication or method of use that you propose FDA include as the ‘Use Code’ in the Orange Book”). Those sources at the least suggest (as Novo thought) that a method of use here is distinct from an indication and that either suffices as a use code.
Prior to enactment of the counterclaim provision, Congress considered a bill that required brand manufacturers to submit a “description of the approved use covered by the [patent] claim,” and that allowed a generic manufacturer to bring a civil action to correct that information. See ante, at 20. Congress rejected the bill, in part over criticism that it would encourage excess litigation. 1 Absent greater clarity from FDA concerning what is required of brand manufacturers in use codes, Congress’ fears of un-due litigation may be realized.
1 See, e.g., 148 Cong. Rec. 13481 (2002) (remarks of Sen. Hatch);id., at 15433 (remarks of Sen. McCain); Office of Management and Budget, S. 812—Greater Access to Affordable Pharmaceuticals Act (July 18, 2002) (statement of administration policy), online at http://www.whitehouse.gov/omb/legislative_sap_107-2_S812-S (as visited Apr. 13, 2012, and available in Clerk of Court’s case file).
ORAL ARGUMENT OF JAMES F. HURST ON BEHALF OF THE PETITIONERS
Chief Justice John G. Roberts: We'll hear argument first this morning in Case 10-844, Caraco Pharmaceutical Laboratories v. Novo Nordisk.
James F. Hurst: Mr. Chief Justice, and may it please the Court:
Since 1984, whenever an -- a drug has multiple FDA-approved uses, there has been a statutory path for generic drugs to reach the market if there are specific uses not covered by a patent.
Here, there is no dispute that Novo's patent does not claim the use of repaglinide when used alone, and that is "an approved method" of using the drug.
Even though that matches the statutory language exactly, Novo is arguing that in this case, our counterclaim to correct their blocking use code is thwarted by the fact that their patent does claim a different approved use--
Justice Ruth Bader Ginsburg: Is it first -- is it first approved, the drug itself -- they're not claiming that, because that -- that patent has expired, hasn't it?
James F. Hurst: --That patent has long expired, and they also had a patent using -- for the use of the drug to treat diabetes through any method, and that patent has long expired.
The only patent that's left that Novo has is specifically limited to the use of repaglinide in combination with metformin to treat diabetes.
My client, Caraco, is attempting to get on the market for admittedly non-infringing uses, which occupy about 70 percent of the marketplace out there.
Justice Samuel Alito: Suppose I said your brief does not cite a Supreme Court decision.
Would that be a correct statement?
James F. Hurst: I believe that -- that -- if -- it depends on the context of the sentence, but I think that would be a correct statement if I understand the way you are asking the question.
You are asking the question in a way that suggests to me by context, you're asking whether I cite any Supreme Court precedent.
But the context here is a little bit different, because the context here in the counterclaim is a situation where drugs routinely have multiple and different distinct uses.
And in that context--
Justice Samuel Alito: Well, we have hundreds and hundreds, probably thousands of opinions, and you didn't cite -- there were many of them that you didn't cite.
You cited quite a few, but you didn't cite all of them.
James F. Hurst: --That's true, that's true.
But when a judge -- when a judge says to me that, you know, you are going to lose this case because you didn't cite an applicable precedent, I am going to hear that to mean I didn't cite a specific particular case.
There are many ways to use the word "an" after the word "not" where it clearly does not mean "any".
"The prosecutor failed to get a conviction because she did not prove an element of the offense. "
"I got lost on my way to the party because I failed to make a turn. "
"My cake fell because I did not include an ingredient. "
So the context speaks volumes in terms of whether or not "an" means "any" in any particular context.
Justice Antonin Scalia: But -- but the context here, one would expect it to say, if it meant what you say it meant, a -- did not claim a use asserted by the generic.
James F. Hurst: Justice Scalia -- you're--
Justice Antonin Scalia: But not just "did not claim a use" and we have to fill in, that is
"the use asserted by the generic. "
That's a strange thing to fill in.
James F. Hurst: --Justice Scalia, I am not quibbling with the fact that this could -- the statute could have been written more elegantly.
My guess is that almost every statute this Court is asked to construe, there are different ways that it could have been written to resolve the issue in question.
Justice Antonin Scalia: It's not a matter of elegance.
It's a matter of how I would have expected it to be -- to be framed if it meant what you -- what you say it means.
It's -- so easy to say that, does not -- claim the use asserted by the generic.
My goodness, and that's what you say it means.
James F. Hurst: If -- and look at the context.
The statute does not ask the brand company to identify an approved use that the patent does claim.
It puts the burden on the ANDA applicant to come into court, file a counterclaim, and identify an approved use that the patent does not claim.
We've carried that burden twice over, There are two approved uses that the patent does not claim.
Justice Samuel Alito: As I understand your argument, you satisfy the -- the ground for seeking deletion or correction was satisfied even before Novo wrote the new use code that you claim is overly broad.
When the use code said simply the use of repaglinide with metformin, the -- the ground for seeking deletion or correction was satisfied, wasn't it?
James F. Hurst: --Well, I mean -- the truth is the patent -- yes -- the answer to that question is yes.
But I would have no reason to go into court to fix a use code that is not blocking me.
Justice Samuel Alito: No, but that's another -- so there are two oddities in the way you read the statute.
Now, maybe Congress just did a bad job of drafting.
But the first is the one we were discussing before, and that's the second one, that -- your -- your beef really is not that the patent does not include every use.
Your beef is that the source -- the use code is too broad, and yet that is not the ground that the statute sets out for seeking deletion or correction.
James F. Hurst: I believe it does, because it the deletion talks about -- there's two remedies: remedy and the correction remedy.
As we read the statute, we preserve distinct roles for the correction remedy and the deletion remedy.
As Novo reads this statute, they all but acknowledge that they are writing the word "correct" out of the statute, because there is no meaningful role for the correction remedy as Novo is reading this statute.
They call the correction remedy a -- a relic of a failed bill.
And in fact, they haven't identified any meaningful role for the word "correct" in the statute as they read this statute.
Remember, what they say is there is two pieces of information that qualify as patent information: expiration dates and patent numbers.
The correction remedy can never reach an expiration date under any circumstances.
I haven't heard Novo to argue otherwise.
What they're saying is if a patent is correctly listed in the Orange Book, this counterclaim is unavailable.
So what does that mean?
If the brand company incorrectly lists the expiration date for a properly listed patent as 2150, this counterclaim is not available to correct the expiration date.
So that leaves only one single piece of information that could possibly be addressed by the correction remedy.
And what does Novo say?
Patent numbers: They say well, the correction remedy could be available for fixing typos in a patent.
Justice Antonin Scalia: Well, it's not much, but it's something.
And -- and the way you are talking, you seem to assume that all the problems in the world have to be addressed by this statute.
Would you have no remedy by -- by suing the FCC for accepting uses that -- that it should not have accepted?
James F. Hurst: I -- whether I do have alternative remedies doesn't answer the question about whether I have a remedy in -- for this particular counterclaim.
Justice Antonin Scalia: That's true, but if -- but if you have alternative remedies, I am not terribly shocked by the fact that you don't have a remedy under this statute.
James F. Hurst: I don't have any good remedies under this statute.
I could not, Justice Scalia, sue the FDA for accepting the use code, at least based on existing law, because the FDA's position is that their role with respect to patents is purely ministerial.
That has been upheld for about a decade now, including multiple courts of appeals, the Federal Circuit and the D.C. Circuit.
So my ability to sue the FDA for accepting Novo's incorrect use code is not really a true alternative remedy.
The remedy that Congress gave me, that I -- that we think Congress gave us, is an enormously efficient remedy.
We filed our counterclaim and within 3-1/2 months we got an injunction asking Novo to correct its use code.
Justice Samuel Alito: Suppose you didn't file the -- suppose the counterclaim provision wasn't available, and Novo -- you filed a paragraph IV certification and Novo sues you for infringement.
Could you not defend the infringement action on the ground that your use of the -- of the drug was not in -- did not infringe their patent?
James F. Hurst: I could not.
Justice Samuel Alito: Why -- why is that?
James F. Hurst: Because there's two paths that are available under the FDA to get -- for a generic to get approval.
One is section (viii), and if I proceed under section (viii) I can carve out the patented use from my label.
If -- and Your Honor's question assumed I am I went through the other route, paragraph IV.
I am not -- FDA does not allow you to carve out any portion of your label if you are proceeding under paragraph IV.
So in the circumstance that you just described, I would -- I would be infringing under paragraph IV and the only way for me to get on the market is to invalidate the patent.
Now, think about what that means.
Novo is forcing us, essentially, to infringe.
We don't want to infringe.
We are trying to carve out our label so that we can proceed under section (viii).
They have blocked our ability to use section (viii), so they've forced us into paragraph IV, forced us to infringe.
And what happens if we fail to invalidate the patent?
We are kept off the market until 2018 for admittedly noninfringing uses of the drug.
There are two admittedly noninfringing uses of the drug.
That's where we want -- that's what we want to use to get to the market.
Justice Elena Kagan: Mr. Hurst, would -- would you agree that Congress did not contemplate this situation?
As I understand it, it wasn't until 2003 that the FDA allowed companies to write their own use codes, and that's what creates this problem.
So would you agree that the Congress that passed this act really couldn't have had this situation in mind?
James F. Hurst: I wouldn't agree, because look at the timing.
The FDA issued the regulation entitled 2003.
Congress enacted this counterclaim using the same language in December of 2003.
The submission of patent information regulation by the FDA with respect to method-of-use patents, and that's what we are talking about here, is all about ensuring that the use code itself is accurate and correct and matches up with the patent.
So I think this is something that Congress clearly had in mind, because you have to assume that they knew about the regulation enacted by the agency that was administering this statute, issued just months before they enacted the counterclaim using the same -- the same--
Justice Ruth Bader Ginsburg: But what about the fact that the FDA and not the patent holders were drafting the use code at the time this legislation passed?
James F. Hurst: --Justice Ginsburg, that is incorrect; your timing is incorrect.
Prior to June of 2003 the FDA was authoring the use codes based on information from the brand companies, but after June 2003 the brand companies were authoring the use codes and the statute was enacted after June of 2003.
Justice Elena Kagan: So you are suggesting that--
Justice Anthony Kennedy: When the FDA was writing the codes, was it writing about the scope of the patent?
Or was it writing about labeling?
James F. Hurst: It was writing about the scope of the patent.
The use codes have always been about the scope of the method-of-use patent; it has never been about anything other than the scope of the method-of-use patents.
Justice Anthony Kennedy: We can ask the government, but why did it think that it lacked the expertise, because it didn't want to opine under the patent laws?
James F. Hurst: --I think the short answer is yes; the FDA has always done their very best to not get anywhere near the patents.
They don't do patents, essentially, and so they decided -- and there was a -- there was a notice and rule -- I'm sorry, notice and comment rulemaking about this, and eventually they decided to make -- to have the brands submit the use code.
Justice Anthony Kennedy: Would it suffice in the description just to give a cross-reference to the patent, to say the use of this drug as described in patent claim number 43?
James F. Hurst: It -- it would not be sufficient, because the way -- the whole purpose of the use code is to administer section (viii).
So what the FDA does is they take the use code, and they match it up with the label, and then the generic gets to carve out whatever the brand company says is patented via the use code.
Justice Sonia Sotomayor: Counsel--
James F. Hurst: But if I could get back to a question, Justice Scalia, that you asked about the -- whether correcting typos in patent numbers is a real role for the correction remedy.
I would submit it is not.
And for all practical purposes, Novo is asking you to eliminate the correction remedy from this statute, and here's why.
Think about what they are saying.
Novo is saying that the brand company decides to put the patent in the Orange Book, but somebody transposes two numbers.
There is a -- there is a mistake that's made.
What does that mean in concrete terms?
Well, if you transpose the two numbers, the odds are astronomically high that the brand company is citing a patent that they don't own and that certainly doesn't relate to the drug in question.
It might relate to tire treads; who knows?
But you do not -- Congress did not enact a Federal cause of action to address typos in patents.
The brand company has every incentive in the world -- and the generic company has no incentive to file a lawsuit to fix that.
But the brand company has every incentive in the world to ensure that they don't make such mistakes, because there is a statutory benefit to properly listing patents.
Justice Sonia Sotomayor: --Counsel--
Justice Antonin Scalia: So it -- it's -- it's -- the issue is not whether Congress enacted it only for that.
The issue is whether Congress enacted it for that in addition to a lot of other stuff.
James F. Hurst: But--
Justice Antonin Scalia: I mean, it's a very small detail, you know -- "correct".
You are saying this one word, "correct", in this immense bill with all sorts of cause of actions and other provisions here and there; that one word has this, this minimal meaning.
James F. Hurst: --You have--
Justice Antonin Scalia: It's conceivable.
James F. Hurst: --You have to give it some meaning.
You have to give it some practical meaning.
And right now -- and it's only -- the counterclaim has only two remedies, so Novo is arguing that the first of the two remedies is practically nonexistent.
Justice Sonia Sotomayor: --Counsel--
James F. Hurst: There is no role -- I'm sorry.
Justice Sonia Sotomayor: --I'm sorry.
James F. Hurst: There is no role whatsoever.
It is surplusage by any definition to -- to say that -- "correct" is surplusage by any meaningful definition.
If you even put a dose of realism to this, "correct" has no role under Novo's reading, while we preserve a distinct role for both the correction and the deletion remedy.
Justice Sonia Sotomayor: I will wait for your rebuttal.
James F. Hurst: Thank you.
I'm sorry, Justice.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF BENJAMIN J. HORWICH ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE PETITIONERS
Benjamin J. Horwich: Mr. Chief Justice, and may it please the Court:
I would like to pick up with Justice Kennedy's question about FDA and writing use codes.
The first thing I'd point out is that before 2003, although FDA wrote the actual text that went in the Orange Book, it was relying on information submitted on a sort of free-form declaration by the -- by the brand.
So the brand was still kind of -- excuse me -- calling the shots in that -- in that respect.
But the -- but the more important point is that the FDA doesn't have the resources or expertise or -- to engage in the substantive patent evaluations that, that would be required under a theory where you would go sue the FDA if you had a problem with this.
But more to the point--
Justice Ruth Bader Ginsburg: Mr. Horwich, do we -- do we know what FDA's position is in this case?
Is the position you are presenting the position of the FDA?
Benjamin J. Horwich: --We -- yes.
We represent the United States here, and so we -- we speak -- we speak for FDA and the other agencies of the government who are very concerned here about the competition law effects of this.
I mean, that's -- that's in some ways the bigger story here.
Justice Elena Kagan: Well, Mr. Horwich, what does that mean exactly, that you represent?
I mean, this might be a case where we would give the agency deference, except the agency's name doesn't appear on the brief.
So should we give you any deference?
Benjamin J. Horwich: Well, the names on the brief I think should not be a guide to the deference question.
But we are not really claiming deference in the sense -- because what we are construing here, what the Court is construing here, is the counterclaim provision, which is a Federal cause of action.
So the Adams Fruit decision of this Court would say that agencies don't get deference in defining the terms of a Federal cause of action.
We do think that -- we do think that it's important to recognize that Congress and the agency were engaged in a dialogue in 2003.
And although I wouldn't label that deference, I would -- I would probably characterize it more accurately as Congress building upon what FDA had done in constructing its patent information regulation and Congress saying, we need a means to -- to protect the integrity of the system FDA has set up.
Justice Anthony Kennedy: Just one more question on how this works.
Why does the FDA rely on use codes in the Orange Book to make the carve-outs if it doesn't do anything to ensure the accuracy of the code?
Benjamin J. Horwich: Well, the statute -- well, let me start with the basic that the statute envisions that there will be carve-outs.
That's the whole principle behind section 8.
And so FDA says, well, we need to know when a generic has made a valid carve-out.
And FDA says, and FDA goes through this in the 2003 rulemaking -- if you read through the preamble there is more detail.
But the short of it is FDA has three choices.
It could rely on the generics to say that they've carved out, but that doesn't really work because the generics could say something and then get on the market when they hadn't proper carved out and that kind of defeats the whole point of Hatch-Waxman's principle of getting patent issues resolved before regulatory approval.
FDA could, as a second alternative, try to evaluate patents itself.
But nowhere else in the statute is FDA given any role in the substantive evaluation of patents, and with good reasons.
This Court has said in its Markman decision that claim construction of patents is a question of law.
The actors in our system that decide what patents mean are courts and ultimately this Court; it's not FDA.
So the third choice--
Justice Samuel Alito: If the patent holder -- if the patent holder writes a use code that is ridiculously, totally, unreasonably broad, is there anything that FDA can do about that?
Benjamin J. Horwich: --Well, I think the problem, Justice Alito, is that from FDA's point of view it's a very slippery slope, because as soon as FDA starts undertaking criticism of a use code its effective -- the only basis for criticizing it is looking at the patent.
Now, this may be a very easy case, but the Court shouldn't be fooled that all cases are going to be easy.
And if FDA here were to go in and said, well, this doesn't look like it's the same as the claim of the patents, in the next case, where it's a more difficult question, where there may be some very good faith dispute between the parties about the very meaning of the patent, FDA is going to have to make a decision one way or the other, and it's going to get sued.
Justice Samuel Alito: Well, what about after -- what about after there has been litigation and a court has decided that a use code that was written in a particular case was totally unreasonable?
Does that mean that the writing of that was in violation of some provision of the Food and Drug Act or FDA regulations and that there would be some sanction against the company that did that?
Benjamin J. Horwich: Well, I think the -- I think the only posture in which a court would actually look at a use code and evaluate it is under the counterclaim.
The court would not be looking at a use code under traditional paragraph IV litigation, and so the author of the majority opinion below was kind of mistaken in that regard.
Chief Justice John G. Roberts: What about an APA action against the FDA for relying on the use code?
Couldn't that be challenged as arbitrary and capricious?
Benjamin J. Horwich: Well, it seems to me that that challenge would fail because [= FDA] has made a reasonable construction of the statute, that its role its role is ministerial, it does not engage in substantive evaluation of patents because the statute doesn't envision that.
So FDA would win that suit.
On the other hand, if -- going back to my answer to Justice Kennedy, if we are talking about kind of a second scenario where FDA does engage in substantive patent review, yes, FDA could get sued.
But the problem with that is that FDA is going to get sued in an APA suit, the real parties in interest are going to be the generic and the brand, FDA is not going to be owed any deference because it's going to turn on a matter of claim construction, which is a question of law.
Justice Anthony Kennedy: So how do you describe what the FDA does?
What's your third?
Benjamin J. Horwich: So what FDA does do is it accepts the submission from the brand describing its -- describing its use code.
And FDA says in its 2003 rulemaking: We are trying to do the best we can through the administrative process to get good information in the first instance.
Justice Elena Kagan: And it's your understanding that you require companies to state the scope of the patent in the use code, or might you think it's perfectly permissible for a company to write its use code in terms of indications?
Benjamin J. Horwich: It's certainly possible in a particular case that the indications would be appropriate.
This is -- what we are asking for in the use code is something that's good enough to do the job that the use code is intended for, which is to inform FDA--
Justice Sonia Sotomayor: But you said that--
Benjamin J. Horwich: --what needs to be carved out.
Justice Sonia Sotomayor: --Except, counsel--
Justice Elena Kagan: So that -- I'm sorry, go ahead.
Chief Justice John G. Roberts: Justice Sotomayor.
Justice Sonia Sotomayor: --Except the FDA tells parties not to rely on the orange code.
Benjamin J. Horwich: It--
Justice Sonia Sotomayor: It tells them what controls is the patent.
Benjamin J. Horwich: --Well, that is true that FDA said that the parties should look at the patent.
But what FDA said in its 2003 rulemaking is that it would rely on the use code.
Let me also point--
Justice Sonia Sotomayor: Could I ask you--
Benjamin J. Horwich: --I'm sorry.
Justice Sonia Sotomayor: --just on a practical basis.
I understand that the Petitioner has filed an amended label in 2010.
I presume that that amended label copies the current label with the exception of substituting the manufacturer.
Benjamin J. Horwich: The label -- I can't speak to what the labeling in the application is right now, because it's confidential.
Justice Sonia Sotomayor: But let's assume that's--
Benjamin J. Horwich: But if we assume for the sake of argument that it's the same, yes.
Justice Sonia Sotomayor: --Now, it claims that when the paragraph IV -- the paragraph IV action is started and it's sued for infringement, that it's automatically going to lose--
Benjamin J. Horwich: Well, that's right, and in fact--
Justice Sonia Sotomayor: --because--
Benjamin J. Horwich: --In fact, Caraco has stipulated to that.
That's at joint appendix 177, because it includes the--
Justice Sonia Sotomayor: --Could you explain to me -- could you explain to me why?
Is merely the use of a label that's identical infringement or is it an infringement of the underlying patent?
Benjamin J. Horwich: --It would be inducement of infringement to sell a product with labeling that suggests that the product be used for a patented method of use.
Justice Sonia Sotomayor: Okay.
So tell us how a court gets out of the quandary of there being a claim that is stipulated to -- I've infringed -- and then how does it deal with the counterclaim?
Now, the district court just ignored the act of infringement below and went straight to the counterclaim.
But I'm not quite sure how you get out of the quandary that this creates for the courts and the parties.
Benjamin J. Horwich: The counterclaim is designed precisely to get out of the quandary, because what it says is the paragraph IV litigation here, the choice between infringement and noninfringement, is a false choice, because if the counterclaim prevails and the use code changes the paragraph IV litigation is going to go away because Caraco is going to want to go proceed through section (viii).
It's going to be able to carve out and get approval that way without a judgment in the paragraph IV litigation.
Justice Sonia Sotomayor: Let's assume that Caraco puts in a label like the one it wants to use under claim 4.
Will the FDA just kick it out?
Benjamin J. Horwich: Yes.
It's not -- it's not permissible.
Justice Sonia Sotomayor: It will not even ask for a response from Novo?
Benjamin J. Horwich: FDA will not permit -- does not permit -- will not approve the application where theirs is carve-out combined with section -- with paragraph IV.
Justice Sonia Sotomayor: But is that before -- without an infringement action by Novo?
Benjamin J. Horwich: I'm not sure of the timing.
Of course, it's possible.
The paragraph IV litigation is somewhat in the control of the parties, so it's not as if FDA sends out the notices that could trigger the litigation.
But there might not be -- there might not be--
Justice Sonia Sotomayor: If you tell me the FDA doesn't want to get involved in construing the patent, why is it kicking out the claim for, claim for, claim until Novo does a suit on whether or not the generic is infringing or not--
Benjamin J. Horwich: --I--
Justice Sonia Sotomayor: --and let that issue be decided below?
Benjamin J. Horwich: --From FDA's point of view, it's not a sufficient application if there's carveout labeling presented with a paragraph IV certification.
And I'd also say this.
To take a step back, the fact that there might be conceivably alternative remedies under some other construction of the operation of the statute shouldn't make you think the counterclaim isn't available here.
After all, the situation that Novo agrees--
Chief Justice John G. Roberts: Finish your statement.
Benjamin J. Horwich: --Thank you.
--the situation Novo agrees is covered by the counterclaim, where the patent doesn't belong in the Orange Book at all, is one that can be remedied at some expense and delay through paragraph IV litigation by proving noninfringement if the patent's irrelevant.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF MARK A. PERRY ON BEHALF OF THE RESPONDENTS
Mark A. Perry: Mr. Chief Justice and may it please the Court:
I think the last half-hour has made clear that what really is at issue here is a challenge to FDA's administration of the Orange Book.
That is an APA challenge, not this counterclaim.
Justice Kennedy, you asked if when FDA was writing the use codes did it describe the scope of the patent, and Mr. Hurst said yes.
The answer is no.
For example, if I could point to the joint appendix at page 522, these are some FDA-authored use codes.
Everything before U530 is an FDA-authored use code.
Chief Justice John G. Roberts: I'm sorry.
What page have you got?
Mark A. Perry: Page 522, Your Honor.
Chief Justice John G. Roberts: Thanks.
Mark A. Perry: U275,
"Method of use of the drug substance. "
"Method of use of the indication of the drug product. "
"Method of use of the approved product. "
These were the ones that the FDA wrote when it was responsible for writing use codes to put the world on notice.
So U-278, method of use of the indication of the product, the patent relates to secondary hyperparathyroidism, but you will never know that from the use codes, and that's when the FDA was writing it.
In 2003, FDA decided to turn it over to the industry.
And it said in this rule making, and you've heard about the rule making but not what FDA actually said.
It said to this: 19 A of the reply brief.
This is 68 Federal register page 36,682.
"We believe an approach that requires the NDA applicant or holder or patent owner to identify the approved methods of use protected by the patent is most consistent with the general balance adopted in the Hatch-Waxman Act. "
"And then the generic industry during this very rule making made all of the arguments that Mr. Hurst has made today, said we should have more of a challenge, we should have litigation and so forth, and the FDA said no, that's not right, because that would let the generics pick it. "
And we said -- they said, we shouldn't do that.
And this is important.
This is on page 24(a) of the reply brief.
The FDA said very clearly,
"There would be repeated litigation over individual patent lifting decisions. "
That's a bad idea, the FDA said, because there is no assurance that NDAs would be approved sooner or generic drugs would enter the market any more rapidly.
Chief Justice John G. Roberts: But the alternative is that the FDA is going to have to hire an awful lot of patent lawyers to review the use codes and their correspondence to the actual patents.
Mark A. Perry: There are several alternatives, Your Honor.
First, the FDA could de-link the indications from use codes.
Right now the regulations say that you can base your use code on the indication or use code as identical or indication applies with every regulation.
You didn't hear Mr. Horwich say that FDA thinks our use code is wrong.
FDA has accepted our use code.
Caraco filed an administrative challenge to the use code arguing that it was arbitrary and capricious under the APA.
And that's the way agency actually gets challenged in the ordinary course as this Court has seen it many times.
Chief Justice John G. Roberts: Well, that's the way agency action gets challenged when it's substantive action.
The FDA's position, the United States position is that this is purely ministerial act.
Mark A. Perry: Your Honor, they have chosen to make it a ministerial act, which is not a negative, by the way.
It is the Federal Drug -- Federal Food and Drug Administration.
What they do is administer this program.
And they have in other areas, such a patent term extensions, entered into memorandums of understanding with PTO where there are patent issues so that there is interagency cooperation to deal with patent issues.
They could do that here but they have chosen not to, and in the exercise of their enforcement discretion said: We are going to accept the ANDA applicant's submission.
And, more importantly, FDA has made the policy decision to tie the section viii determination to the use code.
They don't have to do that.
That's not in the statute.
They could change that by rule making.
And third, on the indication, for example, Novo's use code always follows the indication.
The change in this case is because FDA changed the indication.
Justice Sonia Sotomayor: What odds would you put--
Mark A. Perry: I'm sorry?
Justice Sonia Sotomayor: --What odds would you put as a betting lawyer on them winning a challenge to the FDA policy decisions of what its capable of doing and not doing?
Mark A. Perry: Your Honor, there have been about a dozen APA challenges to various aspects of this administration in the DC Circuit over the past ten years.
The generics have won several of them including most importantly the Purepac case that we cite in our brief which is direct challenge to FDA's refusal of a section viii carveout because of the use code, and the generic won that argument.
It said it was arbitrary and capricious for the agency to do what it did.
So -- look, every APA battle is an uphill battle.
They're the plaintiff.
They burden -- the burden of proof.
It is an available remedy.
You couple that, Your Honors, with the--
Justice Ruth Bader Ginsburg: What you described sounded very much like this case.
So if the -- what was the D.C. Circuit case?
If -- if the DC Circuit said its arbitrary and capricious not to -- to just accept the brand's use code--
Mark A. Perry: --In Purepac, Your Honor, the brand changed its position but the FDA did not change its position accordingly.
And that was the arbitrariness there.
Here of the brand changed its position and the FDA went along.
So I don't think they would win that case, to be clear, in our particular facts.
That's because Novo has done nothing wrong.
I mean, you've heard about, a lot about over breadth, misleading, blah, blah, blah.
There is nothing wrong with Novo's use code if the agency agrees with that.
Justice Stephen G. Breyer: Can I bring you back for a minute, please, to the statute, and if you -- it's in page 3 of the blue brief.
And in just reading it, I might be missing something which you will point out to me, I'm sure.
But if you get the statute at the bottom of the page, it says, as I -- if you've got it there, right?
Mark A. Perry: Yes, Your Honor.
Justice Stephen G. Breyer: It says, ANDA Holder> ["], now that's -- that's Novo,
"holder of the approval -- the approval Holder for the drug, a. "
--I'm skipping words --
"a use of which is claimed by the patent. "
and that's what you are doing -- what's that use was, and I look at page 12 and the use is
"a method for improving glycemic in adults with type 2 diabetes mellites. "
So that's the use that you're -- that's the use that's claimed by the patent.
"If you bring a patent infringement action against the ANDA applicant. "
"the ANDA applicant may assert a counterclaim, which they want to do, seeking an order requiring the holder to correct the patent information on the ground that the patent does not claim an approved method of using the drug. "
So I look at that with those words -- I've skipped words.
I look at those words and I say that's what they are saying.
They are saying the use that -- that it -- that your patent does not cover a portion of the set of things described by your use.
And therefore they would like to correct the description so that the description no longer covers something that you do not have -- a use that you do not have a patent on.
Now that would seem to me to fit within those literal words.
And of course the purpose is what we have been arguing about.
But just looking at the literal words, why doesn't it fit?
Mark A. Perry: Justice Breyer, your question conflated as Caraco often does, the use and the indication.
You quoted the indication, that is, a method of improving hypoglycemic control.
The use is repaglinide combined with metformin.
They are disclosed in different parts of the label.
The indication is under indications, and the use is under dosage and administration.
That is the way FDA has always administered this, and that's the distinction between indication and method of use, which why the regulations and the form are written in the alternative.
Justice Stephen G. Breyer: In other words, you are saying that the -- this -- a method for improving glycemic control in adults with type II diabetes mellites is not the patent information.
Mark A. Perry: Your Honor, that is the indication that--
Justice Stephen G. Breyer: I know, but are saying it is patent information?
Mark A. Perry: --It is not patent information submitted under (b) or (c) of section 505 which is the statutory language.
It is information submitted under 314.53(p) and (e) of the regulation, which is a different question.
Justice Elena Kagan: Was not the regulation issued under this statutory section?
Mark A. Perry: No, Your Honor.
The regulation was issued under section 701, the general rulemaking authority.
They cite section 505, but there was a subsequent rulemaking when Pharma, the trade association for the branded industry, challenged FDA's authority to require all this information.
And then in 2007 rulemaking that my friends on this side never cite, FDA came back and explained that our -- that the patent submission reg is based on section 701 to facilitate the section viii and ANDA process, not an interpretation of section 505.
And there are lots and lots of interpretations of the statute.
Justice Antonin Scalia: Can you give us of a cite of that, please?
Mark A. Perry: --I'm sorry, the 2007 rulemaking is--
Justice Antonin Scalia: You don't have to do it now.
Just file it with the Court.
I don't want to eat your time up.
Mark A. Perry: --You Honor, it is cited in our brief and my colleague will hand up to you momentarily.
Justice Antonin Scalia: Oh, it's cited in principal brief?
Mark A. Perry: In the red brief, Your Honor.
Justice Antonin Scalia: Yeah.
Don't waste your time.
Mark A. Perry: Justice Breyer--
Justice Antonin Scalia: I don't really care.
Mark A. Perry: --To further answer your question--
Justice Stephen G. Breyer: I do.
Maybe your colleague can find it for you.
Mark A. Perry: --Justice Breyer, there is another point on the structure of the statute.
If you look at the chart in the back of our red brief where we tried to lay out the various provisions of the actual statute, the counterclaim that the Court read and that we are focused on talks about "a" use.
And in the preamble it says,
"If the patentholder claims a use-- "
Justice Stephen G. Breyer: You know, I know that argument, right?
Mark A. Perry: --So--
Justice Stephen G. Breyer: You don't need that argument.
If you're right that the patent information in this particular provision does not have anything to do with or at least does not cover the words about diabetes I just read, well, then I guess this section would have nothing to do with it because those are the words they want corrected, aren't they?
Mark A. Perry: --That's correct, Your Honor.
There's a section--
Justice Elena Kagan: Mr. Perry, in your view, patent information is just the patent number and the expiration date, and that's all?
Mark A. Perry: --The patent information submitted under (b) and (c) of section 505, correct, Your Honor.
Justice Elena Kagan: Is that just the patent number and the expiration date?
Mark A. Perry: That's right.
And we know that because the Congress at the same time debated it, an alternative bill that was sponsored by the Democrats that had lots and lots of additional patent information.
Justice Elena Kagan: Well, why would anybody have created this counterclaim to fix the patent number and the expiration date when that can be done by way of the defense to a patent claim?
Mark A. Perry: Your Honor, it's important to remember the counterclaim is only a delisting provision.
It is a very narrow provision.
The FTC report that's cited in the briefs identified eight cases in the first 18 years of Hatch-Waxman that raised this problem of improper listing, mostly due to successive 30-month stays.
That was fixed in the counterclaim, and the 30-month stays were fixed and there has never been a case since -- since 2003 there has never been--
Justice Ruth Bader Ginsburg: --What was fixed?
I missed what you said.
What was fixed in the counterclaim?
Mark A. Perry: --The counterclaim addressed the problem of improper listing that was addressed in the FTC report.
The purpose of the counterclaim, according to its sponsors, and according to the conference report, the listing of improper patents, that problem has gone away.
There is no such problem any more.
It has never come up again.
The counterclaim was entirely successful in solving the problem that Congress set out to address.
It had nothing to do with use codes.
Justice Antonin Scalia: What do you mean by the problem of improper listing?
Mark A. Perry: Your Honor, what the FTC report explained was that certain branded companies near the expiration of the listed patent would come in and file a second patent in the Orange Book, even though it was not properly listed, it didn't fit within section 505(b) in the listing requirements, solely for the purpose of getting a second 30-month stay, essentially to box out the generic companies; And that that was an anticompetitive action.
They recommended the counterclaim to fix that, and at the same time the FTC said if Congress were to enact such a counterclaim it is unclear how frequently it ever would be used.
So this was always intended to be a very narrow -- it's not a fix-all remedy.
Justice Elena Kagan: So your argument, Mr. Perry, is not just that the word "correct" does no work.
Your argument is that the entire provision no long does any work?
Mark A. Perry: No, Your Honor.
My argument is very simple.
A delisting question, it's an on/off switch.
Either the patent is properly listed in the Orange Book or it's not.
The counterclaim gives the generic a one-shot knock-out remedy.
If it's not properly delisted it goes away, and a bunch of things follow from that.
There is no 30-month stay, there is no paragraph IV litigation, there is no impediment to FDA approving the ANDA, because if the patent isn't listed in the Orange Book then a whole separate set of ANDA approval requirements kick in.
A use code is nothing like that.
Chief Justice John G. Roberts: I'm still not following it.
It's not listed simply because the number is wrong?
Mark A. Perry: Your Honor, the usual case is it's not listed because it doesn't fit.
The most famous example, the Buspar case that claimed a metabolite rather than the drug substance and that wasn't the proper listing for that reason.
The correction language which does come out of the other bill, the alternative bill, and we do think is an artifact as the language is used, is there to give flexibility to courts.
If you have a situation of an improperly listed patent, then the court has more flexibility than simply delisting.
Chief Justice John G. Roberts: The brand manufacturer has an overwhelming incentive to list the correct patent, doesn't it?
Mark A. Perry: Yes, Your Honor.
Chief Justice John G. Roberts: So why would we give a procedure to an adversary to fix the number when the brand manufacturer is going to fix it as soon as its alerted to the problem?
Mark A. Perry: Because, Your Honor, if the generic raises a counterclaim and if it's delisted, the generic gets no more 180-day marketing exclusivity stay at the end of the ANDA process.
If it's corrected through a different patent number, the generic would still have its 180-day exclusivity.
So there is every incentive for the generic to bring a counterclaim for a correction if that's the appropriate remedy.
And again, it just gives more flexibility to the courts.
That is something that very much would benefit the generic and it would be available use of the word "correct".
It may be an unusual one, but it's certainly available.
Justice Ruth Bader Ginsburg: I can't imagine that that would really come to -- I mean, if it's a transposition of numbers, that there would have to be a proceeding to get it changed.
I mean, the minute that was noticed, I assume that the brand manufacturer would change it.
Mark A. Perry: Your Honor, the transposition is not the problem.
The more frequent -- the way we think it would come up is these branded companies have large portfolios of patents, they list many patents in the Orange Book.
You know, Novo has five or six right now.
Other companies have many more, dozens and dozens.
They write these use codes and they associate them with the patents.
And in the Orange Book -- by the way, it is called "the Orange Book" because it's orange.
And it's thick.
It's got a lot of information in it.
It has to list every single approved drug with the use code.
I mean, it's just pages and pages of numbers is what's in here.
It's not a transposition of numbers, but rather the listing of one patent and improperly associating it with a drug.
That could be corrected through this counterclaim.
But again, that's worlds away from this use code challenge, which is really what Caraco wants to bring, something that wasn't on Congress's radar screen because FDA wrote the use codes at that point.
Justice Sonia Sotomayor: Counsel, let's assume, because I now take from your earlier conversation with Justice Breyer that you're saying the use code here is absolutely right, because the only use that we claimed was the combination use of the drug, your drug with the metformin.
But the only thing that is wrong here is the indication that the FDA has required.
So that's not even wrong because you have no choice about that; is that correct.
Mark A. Perry: That -- the indication is correct.
Justice Sonia Sotomayor: What this means practically I believe is that when your patent expires no generic can come in with a use that's different than yours because they're going to be boxed out by this indication, this overbroad indication.
Do you actually I thought think that that's what Congress intended?
I thought with claim 4 and section viii that what Congress intended was to ensure that drugs got onto the market as quickly as possible.
Mark A. Perry: Your Honor, that argument was made to the FDA by the generic industry in the 1994 rulemaking, the first time this issue came up, and they said: You should not allow use codes to be based on indications; you should instead require a description of the patented method-of-use.
You heard Mr. Hurst say that again this morning.
Here's what FDA said in response.
quote: It's page 59, Federal Register page 50,346,
"For a use patent, FDA includes in the Orange Book a code identifying the indication covered by the patent. "
"We decline to expand the Orange Book to include patent descriptions. "
Then it went on to explain that persons interested in patent descriptions should consult the official gazette--
Justice Stephen G. Breyer: Yeah, but what it also says is this, and that's what I want to go back to this literal statutory argument.
We took the words, because this is what you can correct.
What you can correct, the statute says, is you can correct
"patent information submitted by the Holder under subsection (B) or (C). "
So we look at (B), and what (B) says is (B) tells us that you are supposed to submit in respect to where you claim the use of a drug the patent number and the expiration date.
So, so far that seems to support you.
But then we look at the regulations which the FDA promulgated, I take it promulgated in respect to (B) and (C), particularly the sentence I read, or maybe some similar sentence, and it tells you that you have to provide the description of the patented method of use as required for publication.
So now I go back and look at what you did provide.
And what you did provide was you provided -- you said that what we do, we have a method for improving glycemic control in adults with type II diabetes mellitus.
That seems to fit directly under (iii) of the FDA's requirement and that FDA requirement was an expansion of (B) and therefore it sounds to me as if when they say "correct", "correct the patent information", it includes the sentence that you put there that they would like to see corrected.
Now, what's wrong with that?
Mark A. Perry: --First, the regulation is not an interpretation of 505(b).
It's an implementation of 701.
Second and more substantively, however, the form -- you quoted accurately from Box 4.2(b) of the form.
There is also Box 4.2(a) of the form, which includes the description of the method of use tied to the label, which is required by subsection (P) of the regulation that you were just quoting to me.
In that part of the form, Novo very carefully describes claim 4 of the patent and ties it to the dosage and administration and clinical pharmacology sections of the patent and calls out by reference combination trials.
The only combination trial in the label is the metforminrepaglinide combination.
And in FDA -- that that is a sufficiently -- because these forms, by the way, you have got them in here, are these little tiny boxes, you can't put very much information in there.
That is described in there.
It is not that every piece of information required by the regulation -- the regulation has 19 lettered questions, of which several have subparts, so it's 26 separate pieces of information.
They're not provided in one box, Box 4.2(b).
There is actually a whole form.
It's four pages long.
We filled it all out.
And there is an important point, Justice Breyer.
This is a summary judgment case.
We put in a declaration from an FDA expert -- it's in the record before the Court -- explaining how every single box ties to every single thing in the regulation.
That's absolutely undisputed on this record.
There is no contrary evidence as to Novo doing anything wrong.
So whether Congress -- to go back to this counterclaim, we know Congress didn't intend it to reach this form, because this form didn't exist when Congress was debating the counterclaim.
Justice Stephen G. Breyer: Now, the government -- now, the government, which is representing all the government agencies, whether the FDA signs it or not, tells us that that language, that (b) and (c) language about patent information as interpreted by the regs does cover this stuff.
This is about the most technical statute I ever read--
Mark A. Perry: Your Honor--
Justice Stephen G. Breyer: --and -- when I'm talking about patent information among (b) and (c), we have the government telling us that that covers this, and why don't I just stop right there and say thank goodness I am out of this case -- and I'm not out of it--
Mark A. Perry: --I think -- I think I can do no better than refer the Court again to the 2007 rulemaking -- Justice Scalia, 72 Federal Register page 21268 -- which the United States does not address and which Caraco does not address, in which FDA addressed your point, Justice Breyer, and explained that this information -- while useful, and we have never challenged FDA's authority to require the information, but it is not an interpretation of that language patent information -- this quote (c) is--
Justice Antonin Scalia: And even if it were, as I believe the government acknowledged, this is not a situation in which we owe deference to the FDA.
The issue is whether a lawsuit can be brought or not.
Mark A. Perry: --Correct.
Justice Antonin Scalia: And we -- we don't decide whether we have authority to decide cases on the basis of what the agency thinks.
Mark A. Perry: It is certainly--
Justice Sonia Sotomayor: What is the parade of horribles that you imagine if we were to read the counterclaim provision in the way your adversary is promoting and the government is promoting?
What -- what, presumably in the normal case and the one that the regulations appear to expect is that the use code, the indication code, everything is going to match the patent.
So in that situation, the counterclaim would have no work to do.
So what is the parade of horribles?
Mark A. Perry: --Your Honor, first, the counterclaim has no work to do for use codes.
There is a complete disconnect there, so--
Justice Sonia Sotomayor: I -- I'm asking you to accept that we are to -- as an assumption only, don't -- it's not intended to be a -- a ruling -- to assume that we read the counterclaim in the way your adversaries want us to.
What's the parade of horribles?
Mark A. Perry: --Your Honor, it is going to add complexity, expense and so forth.
The reason -- the problems with all civil litigation, all new causes of action -- and this was raised during the congressional debates, when they proposed a freestanding cause of action for generics to sue over a whole bunch of things, Congress was up in arms, and said no, we are not going to do that because we don't want to let private parties into the FDA process.
This Court is familiar with that and the parade of horribles from the Buckman case.
Justice Elena Kagan: But, Mr. Perry, there are also horribles on the other side, of course.
I mean, here's -- there's -- there's the statute, and it has three provisions, and two of them are vague and one of them works against you.
One is an approved method.
I think, you know, you both go back and forth about it; it depends on context.
One is patent information, which, you know, maybe you are right, and maybe Mr. Hurst is right.
It's not really quite clear what it means to be under subsection (b) or (c).
The third is correct.
You basically read "correct" out of the statute.
So at best, this is an unclear statute from your point of view.
And then there is the question of what it allows you to do.
The statute read your way essentially allows you to unilaterally expand your patent in areas in which it's quite clear that your patent ought not to go -- does not go -- but allows you to do that.
So why should we read the statute so that it effects a purpose that is entirely antagonistic to the purpose that Congress had in passing this statute, given that the statute is at best from your perspective ambiguous?
Mark A. Perry: Justice Kagan, this statute was a political compromise.
There is no debate on the historical record about that.
And the compromise that Mr. Hurst indicated earlier was that the statute would deal with some things -- the counterclaim would deal with some things, delisting -- and almost everything else would be turned over to the FDA.
And FDA had this extensive rulemaking, that as [= Mr.] Hurst said, Congress was aware of.
And during that rulemaking, Congress did several things.
First, it confirmed that the industry would write use the use code.
Second, that use codes could be based on indication.
So there is no extension of the patent monopoly.
It is simply following FDA's instructions as to indication of use code--
Justice Ruth Bader Ginsburg: Mr. Perry, can I ask you, on that core question: we have a patent on a drug alone.
It expires, and then the patent holder gets a label patent that's on a method of use, and we have a generic that wants to sell the drug alone which is no longer patented.
Doesn't want to sell it in combination with anything else, wants to sell the drug alone.
Can it do so without infringing the method of use patent?
Mark A. Perry: --No.
Your Honor, we will -- they will be sued for infringement if they ever go to market, because the generic substitution laws present in 49 state require or allow pharmacists to substitute the products whether or not the combination is on the label.
So there will always be an infringement suit, which gets back to Justice Kagan's question: why would Congress have contemplated?
They didn't contemplate this.
They contemplated delisting, where you take it out of the infringement suit altogether.
This issue, indications use code, section viii, that is all within the agency, but there is a litigation problem with it or challenge to it, that is what the APA is for.
And again, there have been dozens of APA cases where the generics largely have challenged FDA's determinations in that respect.
It is not what the counterclaim is for.
This is a very narrow provision.
What we're -- we're parsing, by the way, two clauses in one sentence of a statute -- the 2003 amendments were 415 pages long.
The Hatch-Waxman Act is thousands of provisions long.
Very delicate balance between lots of competing interests, billions of dollars at stake.
And we have to be careful.
When Congress creates a new course of action, the law of unintended consequences kicks in here.
We know this is not -- this case is not what Congress intended.
The counterclaim we don't believe can be read it all to it.
Even if it's ambiguous.
Putting it in context and looking at what FDA has actually said about these matters in its rulemaking, when it's faced with the same challenges that a generic industry that Mr. Hurst presented here -- it has rejected them over and over again--
Justice Samuel Alito: Come back to Justice Kagan's question.
Your position is really nothing can be done by a generic that is blocked from marketing a drug for a nonpatented use by a use code that -- that is -- that seems to cover that use--
Mark A. Perry: --In this case, Justice Alito, there were two points: first, FDA rejected Caraco's administrative challenge to the use code.
They could have taken that to the D.C. Circuit under the APA.
Second, they have indicated a rejection of their section viii carve-out because of the use code.
They could take that to the D.C. Circuit under the [= APA].
That is the usual course for challenging agency action.
If there are any problems here -- our position is, we have complied in every respect at every moment with every bit of FDA's regulations.
And again, that -- that's what the evidence in this record shows.
So again, I need to push back a little on extensions and monopolies and so forth, because that's not what this case is about.
This case is about a properly working administrative process, and should in private litigation between two parties in which the FDA will not be a party, should that regulatory regime be dismantled.
You know -- and we actually asked to bring the FDA in, in this case.
And Caraco resisted that.
You know, we think that if you're going to debate the administration of the Orange Book, it should be under the APA--
Justice Elena Kagan: But -- but here's what we know about Congress's intent.
And it goes back to the Mylan suit.
What we know about Congress's intent is that Congress wanted to give a generic manufacturer in this situation a remedy when there was a completely irrelevant patent.
And the question is why we should consider this to be any different.
In some respects, this makes -- this is worse from the generic manufacturer's point of view because the generic manufacturer doesn't even have a defense in an infringement suit--
Mark A. Perry: --Your Honor--
Justice Elena Kagan: --so why should we think that the Congress that really cared about the result in Mylan does not care about this?
Mark A. Perry: --Mylan, in the response gives the generic a one-shot remedy, and you are out of it altogether.
And it's a black-and-white decision.
It's an on-off switch.
Either the patent is properly listed or not.
In a use code of the Orange Book, there are over 1000 of them.
They are shades of gray.
There are -- there are very specific ones, very general ones.
I read to the Court some of the ones that the FDA itself wrote.
You would get into these long involved questions about compliance and so forth -- to the effect, Congress wanted to make generic approvals quicker in the Mylan situation.
FDA itself, and I started out my argument reading from that page, page 24A of the reply brief, where the FDA said increased litigation over use codes -- patent listings -- would not assure faster generic entry because you would spend years and years, as we all have, litigating these very issues.
So the Congress had it focused on this, which it never did.
There is not one word in the thousands and thousands of legislation -- pages of legislative history about use codes.
Had it focused on this, it would never have gone this way because it didn't need to.
And when it did have the broader bill, SA12, it failed.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Hurst, you have four minutes.
REBUTTAL ARGUMENT BY JAMES F. HURST ON BEHALF OF THE PETITIONERS
James F. Hurst: Thank you.
I would like to start by -- by asking the Court if I can to turn to the Joint Appendix, second volume, 484.
And I want to address two issues: the argument that the use code is disconnected from the patent itself, and it -- it may relate to the indication regardless of what the patent says; and whether or not the information is being submitted under subsection (b) and (c).
If you are at 484, this form went through notice and comment rulemaking before the enactment of the counterclaim.
The title, 314.53, entitled "submission of patent information".
Now look at right below those two boxes.
What does it say -- how does it say the information is being submitted?
This is a form Novo signed.
"The following is provided in accordance with section 505(b). "
"That's 355(b) and (c) of the Federal Food and Drug and Cosmetic Act. "
Moreover, when the FDA issued this patent submission regulation in its final rule, it cited 505 as its legal authority.
That's at 28J of the Blue Book.
It cited -- and it specifically called out subsections (b) and (c).
So this is a regulation that was enacted prior to the enactment of the counterclaim.
Justice Antonin Scalia: And what do you say about the -- the section cited by -- by your colleague?
James F. Hurst: --We address -- he's citing something the FDA said in 2007.
And if you actually read it, we cited it -- we addressed this in our brief.
It actually says our -- our legal authority for doing this was explained fully in 2003.
And in 2003, the FDA cites 505.
Can I turn you quickly to 487 now.
This addresses quite specifically this notion that the indication can be used even if it's disconnected from the patent.
Remember what the regulation says, and Justice Breyer read this before.
It's at 127A of the appendix.
But the regulation says that the brand is required to
"the description of the patented method of use as required for publication. "
They are supposed to provide that information.
And look what the actual instruction says.
It could not be more clear 4.2(b), bottom right side.
"The answer to this question" -- this is where the brand supplies the use code --
"the answer to this question will be what FDA uses to create a use code for Orange Book publication. "
"The use code designates a method of use patent that claims the approved indication for use. "
It depends on what the patent claims "of a drug product".
Then it goes on to explain why you need to do that.
Each approved use claimed by the patent should be separately identified in this section and contain "adequate information" -- this refers to section viii --
"adequate information to assist 505(b)(2) and ANDA applicants. "
--that's us --
"in determining whether a listed method of use patent claims a use for which the ANDA applicant is not seeking. "
--that is precisely the situation we were facing.
We have offered a construction of this statute that is fully consistent with its text, its structure and its purpose.
And it really is the only reading of the statute that carries out congressional intent in terms of trying to prevent situations where incorrect patent information is unfairly delaying generic competition.
Up to this point right now, Novo has still failed to identify any reason why anybody in Congress would want the system to work as Novo posits, where the brand company gets to supply an overbroad use code?
Without judicial review, without agency review?
That blocks admittedly noninfringing products from the marketplace.
And I -- and I submit that given the addition of the correction remedy that would not be in there if this was not designed to address use codes, because that's the only thing that can be corrected without remedy.
Justice Sonia Sotomayor: Going back to the question that I had.
And a more practical question--
James F. Hurst: Sure.
Justice Sonia Sotomayor: --As I read the record, in April of '08, the [= FDA] rejected your section viii application.
James F. Hurst: Yes.
Justice Sonia Sotomayor: All right?
And it asked you to submit an amended code.
Your brief says we did it in September, Is it anywhere in the record?
James F. Hurst: The question is did we--
Justice Sonia Sotomayor: Did you -- you submitted what the FDA requested for your claim 4, the amended label?
James F. Hurst: --Yes, we did.
And it's in JA777, paragraph 20.
It's a stipulated--
Chief Justice John G. Roberts: Thank you, counsel.
James F. Hurst: --Thank you, Your Honor.
Chief Justice John G. Roberts: The case is submitted.
Chief Justice John G. Roberts: Justice Kagan has our opinion this morning in case 10-844, Caraco Pharmaceutical Laboratories versus Novo Nordisk.
Justice Elena Kagan: In this case, we consider the scope of a statute authorizing a generic drug manufacturer to bring a counterclaim against a branch named manufacturer in patent litigation.
Now, to understand anything about the statute, you need to know a little bit about how the Food and Drug Administration, the FDA, approves the marketing of prescription drugs, both brand name and generic.
When the manufacturer seeks to market a new drug, it must submit an application to the FDA, showing that the drug is safe and effective.
In this case, a company called Novo submitted an application for a diabetes drug called Prandin, which is the brand name for a drug compound called Repaglinide and the FDA approved that application for three distinct methods of using the drug.
Once a new drug is approved in this way, other companies may seek approval from the FDA to market a generic version which will be cheaper for consumers, but the FDA cannot approve a generic drug if it would infringe the brand manufacturer's patents.
So, the FDA requires the brand manufacturer to provide it with information about what patents it holds and in particular, when a brand manufacturer holds a patent on a particular method of using a drug, it has to submit a description of that patent, which is known and this is important to determine this opinion as a use code.
Now, for better or worse, the FDA doesn't actually check whether the use code is accurate.
The agency simply assumes that it is and makes decisions about whether to approve generic drugs on that basis.
Okay now, when a generic manufacturer applies to the FDA, it checks the brand manufacturer's use codes, which are published in something called the Orange Book and then it tries to assure the FDA that its drug will not infringe the brand's patents.
You can do this in a few ways, one of which is by what's called a Section 8 statement which certifies that the generic drug will be marketed only from methods of use that are not covered by the brand manufacturer's patents.
Here, the generic manufacturer is a company called Caraco, which wants to market a generic version of Repaglinide.
Caraco thought that it could file a Section 8 statement because the FDA had approved Repaglinide for three methods of use, but Novo, the brand manufacturer holds a patent on only one of them and Caraco wanted to sell its drug, its generic version, only for the other two.
So, Caraco filed a Section 8 statement in the hopes of getting FDA approval, but here's the problem.
Novo's use code, its description of its own patent was overbroad.
It inaccurately claimed that the company held a patent on all three approved uses of Repaglinide and because that's what the use code said, and as I told you before, the FDA doesn't check its accuracy, because that's what the use code said, the FDA could not approve Caraco's application based on a Section 8 statement.
The only thing left for Caraco to do under the statute was to file a different kind of statement which the law -- which the law treats as itself an act of patent infringement entitling the brand manufacturer to sue the generic company and that's what Novo did and now finally, we get to the question in this case.
Once having been sued by Novo, could Caraco bring a counterclaim to force Novo to correct its use code?
That's important because if the use code is corrected, Caraco could re-file its Section 8 statement.
The FDA would approve it and then Caraco could market its generic drug.
Now, there's a statute that specifies when a generic manufacturer can bring a counterclaim against a brand manufacturer in patent litigation.
The statute allows a counterclaim and I'm going to quote now, it's kind of a mouthful, “When the generic company seeks an order, requiring the brand manufacturer to correct or delete the patent information submitted by the brand manufacturer under two particular statutory provisions on the ground that the patents does not claim an approved method of using the drug.”
So, what we had to do in this case was to decide whether this statutory language entitles a generic manufacturer like Caraco to use the counterclaim method to seek correction of a brand manufacturer's use code.
We hold today that the statutory language does allow such a counterclaim.
Caraco can bring a claim against Novo to force Novo to narrow its use code so that the FDA can approve Caraco's generic product.
Our opinion focuses on two phrases in the statute.
First, the statute says that a generic may bring a counterclaim when the patent does not claim an approved method of using the drug.
Now, Novo would have us read that provision to require the generic company to show that the patent does not claim any approved method of using the drug and if that's -- if that's right, then Novo was in the clear because its patent does claim one approved method of use.
By contrast, Caraco says, “All it has to prove is that the patent does not claim a particular method of use, the one for which it seeks to market its product,” and if that's so, Caraco wins, because Novo's patent does not in fact claim two other approved methods of use, the methods of use that Caraco seeks to market its product for.
We think this is a pretty interesting question as a grammatical matter and the opinion has a bit of fun with it, but in the end, we say that the context of this statute shows that Caraco is right.
The statute is concerned not with whether the brand's patent claims any method of use, but with whether it claims the method for which the generic seeks to market its drug.
So here, we think the phrase, “not an,” means not a particular one, rather than “not any.”
Second, the counterclaim applies only to patent information submitted under subsections 355 (b) and (c) of Title 21.
Novo contends that use codes are not submitted under these subsections, but instead, under FDA regulations.
But we reject that arguments too because the regulations requiring the submission of use codes are themselves based on subsections 355 (b) and (c) and that's it.
We hold that Caraco may use the counterclaim to challenge Novo's use code and we reverse the Federal Circuit's contrary judgment.
Our decision is unanimous.
Justice Sotomayor has filed a concurring opinion.