(Sodium oxybate) and Xywav® (calcium, magnesium, potassium & sodium oxybates)
Case Name: Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, Nos. 2024-2274, 2024-2277, 2024-2278, 2025 WL 1298920 (Fed. Cir. May 6, 2025) (Circuit Judges Lourie, Reyna, and Taranto presiding; Opinion by Lourie, J.) (Appeal from D. Del., Williams, J.)
Drug Product and Patent(s)-in-Suit: Xyrem® (Sodium oxybate) and Xywav® (calcium, magnesium, potassium & sodium oxybates); U.S. Pat. No. 11,147,782 (“the ’782 patent”)
Nature of the Case and Issue(s) Presented: Xyrem® is indicated for treatment of excessive daytime sleepiness (“EDS”) and cataplexy in patients diagnosed with narcolepsy, while Xywav® is indicated for treatment of both EDS and cataplexy, as well as idiopathic hypersomnia (“IH”). Xywav® is the only FDA-approved treatment for IH.
On Dec. 15, 2020, Avadel filed a 505(b)(2) NDA for its product, Lumryz, which is indicated for treatment of EDS and cataplexy, but not IH. On Mar. 23, 2021, Jazz filed the ’782 patent application, which issued on Oct. 19, 2021. The ’782 patent was not Orange Book-listed, and Avadel did not file a paragraph IV certification with its NDA. On Nov. 10, 2021, Jazz filed suit against Avadel alleging patent infringement under 35 U.S.C. § 271(e)(2)(A). On May 1, 2023, FDA approved Avadel’s NDA for Lumryz, and Avadel commercially launched Lumryz on June 5, 2023. Jazz subsequently amended its complaint, dropping its § 271(e)(2)(A) claim and adding claims under each of § 271(a)-(c). Prior to trial, the parties stipulated that, if not found invalid, Lumryz infringed the asserted claim of the ’782 patent. At trial, a jury found in favor of Jazz.
Following trial, Jazz moved for a permanent injunction under 35 U.S.C. § 283. While Jazz’s motion was pending, Avadel launched a clinical trial for Lumryz which included an open-label extension (“OLE”) period allowing trial participants to continue to receive Lumryz following the conclusion of the trial. The district court subsequently granted Jazz’s motion for an injunction, prohibiting Avadel from “seeking approval from the [FDA] and marketing Lumryz for the treatment of IH” while allowing Avadel to continue making, using, and selling Lumryz for use only “in currently-ongoing clinical trials and studies.” Avadel filed an emergency motion to stay the injunction, arguing that barring Avadel from initiating new clinical trials or seeking approval to market Lumryz for treatment of IH ignored the safe-harbor provision of § 271(e)(1), which permits experimentation with a patented drug product where “the purpose is to prepare for commercial activity which will begin after a valid patent expires[.]” The district court denied Avadel’s motion, clarifying that Avadel could continue its clinical trial and enroll new patients, but could not: “(1) offer[] open-label extensions to . . . trial participants; (2) apply[] for FDA approval of Lumryz for IH; [or] (3) initiate[] new clinical trials or studies[.]” Avadel appealed the district court’s entry of the permanent injunction and denial of its request for a stay. On appeal, the Federal Circuit reversed-in-part, vacated-in-part, and remanded to the district court after finding that the district court’s decisions were based on “[l]egal error” that “constitute[d] an abuse of discretion.”
Why Avadel Prevailed: Starting with the prohibition of Avadel from “initiating new clinical trials for Lumryz,” the Federal Circuit held that the performance of clinical studies was protected by the safe harbor provision of § 271(e)(3). Because § 271(e)(3) provides that “no injunctive or other relief may be granted which would prohibit” activity protected by the safe harbor provision, the court reversed the district court and held that enjoining Avadel from “initiating new clinical trials for Lumryz . . . [wa]s unlawful and, therefore, an abuse of discretion.” The Federal Circuit also rejected Jazz’s argument that Avadel had waived the protection of the safe harbor provision. It explained, “Jazz ha[d] never alleged that any of Avadel’s activities with respect to its future clinical trials [we]re infringing” and Avadel had not invoked the safe harbor provision as a defense to infringement, but instead had only argued “that the district court’s forward-looking injunction [wa]s unlawful on its face insofar as it necessarily enjoins Avadel from making, using, and selling Lumryz ‘solely for uses reasonably related to the development and submission of information’ to the FDA, i.e., non-infringing activities, in violation of § 271(e)(3). That facial challenge . . . is a purely legal invocation of the safe harbor and does not require factual development.”
The Federal Circuit next addressed the prohibition on Avadel “offering open-label extensions in ongoing clinical trials.” Noting that OLEs exist, in part, to “‘better characterize the safety of a drug late in its development’” and that “whether Avadel’s use of an OLE period [wa]s a safe-harbor activity is a question of fact that has not yet been accused, let alone adjudicated[,]” the Federal Circuit reversed the district court on the grounds that “§ 271(e)(3) clearly requires that the § 271(e)(1) issue be decided prior to the grant of injunctive relief[.]” The decision left open the possibility that, if the district court determined that Avadel’s OLE fell outside the scope of the safe harbor, it could enjoin the OLE if it determined that the eBay factors favored issuance of an injunction.
Finally, the Federal Circuit addressed whether Avadel could be enjoined from “applying for FDA approval of Lumryz for IH.” Finding that such a submission could not constitute infringement under § 271(a)-(c), the analysis then turned on whether Avadel’s submission of its 505(b)(2) NDA for Lumryz constituted an act of infringement under § 271(e)(2). If Avadel’s submission constituted an act of infringement under § 271(e)(2), the district court’s injunction would be improper given that Jazz’s relief would be limited by § 271(e)(4), which only allows for “(1) an order setting the effective date of any FDA approval of Lumryz to be no sooner than . . .the expiration date of the ’782 patent; (2) an injunction preventing Avadel’s commercial activities relating to Lumryz; and (3) damages for any of Avadel’s past commercial activities relating to Lumryz.” But if Avadel’s submission was not an act of infringement under § 271(e)(2), Avadel could potentially be enjoined from filing a future application if the court found that an injunction was otherwise warranted under the eBay factors, i.e., if “the district court . . . concluded that the injunction was necessary to prevent infringement.” The Federal Circuit declined to settle this issue. While rejecting Avadel’s argument that the text of § 271(e)(2) itself provides that only a paragraph IV notice, and not the submission of an NDA or ANDA, constitutes an act of infringement, the court also acknowledged that “the placement of § 271(e)(2) within the context of the Hatch-Waxman Act suggests that the provision may only apply where the ANDA or 505(b)(2) application seeks approval of a drug claimed in an Orange Book patent.” Because of this ambiguity, and because the court found that the district court’s analysis was “simply too speculative and tenuous” to concluded that an injunction was warranted, the Federal Circuit vacated the injunction and remanded to the district court to determine: (1) whether Avadel’s submission of its NDA for Lumryz constituted an act of infringement under § 271(e)(2); and (2) if it did not, whether an injunction was warranted under the eBay factors.
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