This spring the Supreme Court seems to have made it easier for generic drug manufacturers to contest the reach of patent protection for brand name drugs. In Caraco Pharmaceutical Labs, Ltd. v. Novo Nordisk, the Supreme Court ruled that a congressionally-created counterclaim allows generic manufacturers to challenge the exact uses a drug patent covers. Generic manufacturers can use the counterclaim in cases where a patent holder asserts infringement in response to an application to manufacture a generic version of a brand-name drug (i.e., Abbreviated New Drug Application or ANDA).
The Supreme Court’s unanimous decision directly addresses what could be referred to as “use squatting,” whereby brand-name drug manufacturers submit inaccurate or overbroad patent information related to methods of using the brand-name drug to the Food and Drug Administration (FDA).
A 2002 Federal Trade Commission study found that brand-name drug manufacturers were submitting overbroad use code information to prevent or delay generic entry. In response, Congress created a statutory counterclaim for generic manufacturers to challenge the accuracy of use codes that inaccurately describe the brand’s patent(s) as covering a particular method of using the drug in question.
Caraco and the congressional counterclaim
The Supreme Court’s unanimous decision
Reversing the Federal Circuit, the Supreme Court held that a generic manufacturer “may employ the counterclaim provision to force correction of a use code that inaccurately describes the brand’s patent as covering a particular method of using a drug.”