The American Lawyer named James Hurst of Winston & Strawn a Litigator of the Year finalist in January, thanks in part to a streak of wins for generic drug companies in their battles with brand-name rivals. Hurst struck again on Tuesday, winning a ruling for Caraco Pharmaceutical Laboratories at the U.S. Supreme Court that makes it easier for generics to bring successful counterclaims against brand-name drug companies in Hatch-Waxman Act litigation–and ultimately to get their own drugs on the market.
In a 9-0 decision by Justice Elena Kagan, the Supreme Court reversed a ruling by the U.S. Court of Appeals for the Federal Circuit, finding that a district court judge was right to conclude in 2009 that Danish pharma giant Novo Nordisk must correct information it provided to the Food and Drug Administration about its diabetes drug Prandin. The decision should allow Caraco, a subsidiary of Sun Pharmaceutical Industries, to market a generic version of Prandin. More significantly, the ruling expands the scope of the so-called “counterclaim provision” of the Hatch-Waxman Act, which lets generic companies challenge the accuracy of patent information that branded drug companies supply to the FDA.
The ruling sheds some light on a murky provision of Hatch-Waxman Act. Under the law, the FDA won’t approve generic drugs for uses covered by patents owned by branded drug makers. With that in mind, pharma companies have long had an incentive to overstate the patented uses of their drugs. The FDA has made that incentive even stronger by adopting a policy of never second-guessing the patent information that drug makers supply. To clamp down on the trend, Congress amended Hatch-Waxman in 2002 to allow generics to counterclaim that brand-name drug companies filed inaccurate patent information with the FDA. Jurists have been parsing the statute ever since, and coming to very different conclusions about when the counterclaims can be brought.
Some of that ambiguity has now been resolved by Tuesday’s unanimous opinion. Relying on legislative intent and policy considerations, the Court took a broad view of when generic drug companies can assert the counterclaim provision. (Click here for PatentlyO’s lengthier explanation of when the counterclaims provision will apply.) The Federal Circuit had taken a much narrower view in its 2-1 decision from 2010 siding with Novo Nordisk. That decision “looked at the counterclaim provision very literally and in isolation,” says Aaron Barkoff of McAndrews Held & Malloy, who wasn’t involved in the case.
The decision caps a roller-coaster of litigation over Prandin that pitted Winston & Strawn against Novo’s lawyers at Gibson, Dunn & Crutcher. While the FDA had approved three methods of prescribing the drug, Novo Nordisk’s patent covers only one method. Caraco sought FDA approval to market its generic version for the two other approved uses. Novo Nordisk tried to block the generic by amending its regulatory filings to claim that the patent actually covers all three FDA-approved uses. After a three-week trial in 2009, Caraco won an injunction forcing Novo to scale back its claims. Caraco moved forward with plans to market its generic, but then Novo’s counsel at Gibson Dunn convinced the Federal Circuit to set aside the injunction. The Supreme Court granted cert last summer, setting the stage for a December 2011 showdown between Winston’s Hurst and Gibson Dunn appellate powerhouse Mark Perry.
Both Hurst and Perry declined to comment, but other patent experts are all abuzz about the ruling. According to Barkoff, this is the first time the Supreme Court had ever weighed in on a Hatch-Waxman challenge to a brand-name drug.
“This decision is certainly beneficial to generic drug companies because it opens up a new avenue of litigation,” said Gerald Flattmann Jr. of Paul Hastings, who represents brand-name drug companies. “This will really motivate generic drug companies to consider potential new strategies concerning carve-outs of patented uses.”
Put Flattmann down as one early critic of the decision. “I was personally surprised that [Federal Circuit chief judge] Rader got unanimously reversed here,” he said. “The Supreme Court adopted a considerably more expansive reading [than the Federal Circuit], supposedly justified by the legislative context and policy considerations. . .There’s a segment of the court that has espoused strict constructionism throughout their careers. This opinion seems dissonant with some of those judgments.”
This article originally appeared in The Am Law Litigation Daily.
