Opinion analysis: Court’s purposive reading hands Federal Circuit second patent reversal of the Term
on Apr 18, 2012 at 11:16 am
Coming on the heels of the Court’s stern rebuke last month in Mayo v. Prometheus Laboratories, yesterday’s decision in Caraco Pharmaceutical Laboratories v. Novo Nordisk is the start of a bad year on First Street for the Federal Circuit. This case involved a branded pharmaceutical manufacturer’s procedural maneuverings to delay a generic manufacturer’s effort to sell a drug for a particular use that is approved by the FDA but not covered by the branded manufacturer’s patent.
Specifically, the case involves a drug (repaglinide) approved by the FDA for three separate uses related to diabetes. Novo has a patent that covers one of the three uses but not the other two uses. Still, Novo submitted to the FDA a summary of the scope of its patent that covers all three uses. Because the FDA abjures any power to revise the description, however patently erroneous it might be, no generics can be sold for the non-infringing uses.
The generic manufacturer (Caraco) filed suit under 21 U.S.C. § 355, seeking to “correct” Novo’s description of its patent. The Federal Circuit ruled that this power is not available, which meant that Novo’s overbroad description would allow it to unilaterally extend the scope of its patents, with no possibility of administrative or judicial correction. The Supreme Court unanimously reversed, in an opinion by Justice Kagan.
The central textual question turns on an almost farcical triviality: the distinction between the words “an” and “any.” Under Section 355, the generic can prevail only if it can prove that the branded manufacturer’s patent does not extend to “an” approved method of use. In the Federal Circuit’s view, this requires proof that there is no approved method to which the patent extends. By contrast, Caraco argued that it need prove only that there is a single (“an”) approved method of use to which the patent does not extend.
It was clear from the oral argument that Novo (the branded manufacturer) would have a rough go of it. For one thing, the Justices clearly understood the practical implications of Novo’s position: that the branded manufacturer could gain an effective monopoly even over non-patentable uses simply by filing a document with the FDA falsely claiming that its patents extend to those uses. The best thing Novo had to say for this result was that Congress has moved slowly in authorizing new avenues for litigation in the complex statutory framework.
Justice Kagan’s opinion is peremptory in tone and dismissive in style. Responding to the parties’ detailed arguments about the best way to read “an,” she took the view that “an” can draw its meaning only from context and that in this context the implications of reading it to bar this suit were too bizarre to accept: “It would take strong evidence to persuade us that this is what Congress wrought. That ‘not an’ sometimes (but sometimes not) means ‘not any’ is not enough.” In her view, Congress easily could have revised the statute to clearly support Novo’s reading, or to clearly support Caraco’s reading. Given the flexibility of the language, she adopted the reading that made the most sense in context.
In the end, the Court seemed most persuaded to support Caraco by its take on the legislative history that was the centerpiece of Novo’s argument. Novo pointed out that the statute in question was adopted to overrule an earlier Federal Circuit decision (Mylan Pharmaceuticals, Inc. v. Thompson) that had permitted a similarly obfuscatory brand tactic to forestall a generic from marketing a pharmaceutical. Novo argued that the statutory fix should be read to fix the problem at issue in Mylan, and only that problem.
But the Court clearly read the terrain, and its role, differently. What the Court saw was a recalcitrant Federal Circuit, repeatedly buying into the tortured strategies of branded manufacturers and permitting them to delay the marketing of cheaper generic pharmaceuticals. Congress responded immediately and vigorously after Mylan. It seems simply too much for the Court to tell Congress, yet again, that Congress has still failed to authorize the sale of generic pharmaceuticals when the patents of the branded manufacturers expire. It is perhaps no coincidence that the Court’s patience for this is lessened by the national focus on health-care reform.
In the end, perhaps little will come of this case. It is a relatively minor statutory interpretation case, which rests on commonplace generalities about the importance of reading statutes in context. If it suggests any general lesson to the Federal Circuit, it is that it should take a little more seriously its task of constructing a sensible boundary between the rights of generics and pharmaceutical manufacturers and a little less seriously its interest in blindly following what might seem the most literalistic imaginable reading of a complex statute.