Federal Circuit Vacates Injunction against Narcolepsy Drug Research

The Federal Circuit has reversed in part and vacated in part a district court’s injunction that blocked Avadel CNS Pharmaceuticals from conducting clinical research and seeking regulatory approval for expanded uses of its once-nightly narcolepsy drug, Lumryz.

The court ruled that the injunction improperly covered conduct protected by the Hatch-Waxman Act’s “safe harbor” provision, 35 U.S.C. § 271(e)(1).

35 U.S.C. § 271(e)(1) states:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

i.e., certain pre-approval research and regulatory activities are exempt from patent infringement liability.

As the federal circuit explained,

Jazz Pharmaceuticals, Inc. and Jazz Pharmaceuticals Ireland Limited (collectively, “Jazz”) manufacture and sell two sodium oxybate products: Xyrem®, a sodium oxybate oral solution approved for the treatment of excessive daytime sleepiness (“EDS”) and cataplexy in adult and pediatric patients with narcolepsy, and Xywav®, a low-sodium oxybate product approved for the same indications as Xyrem, as well as for the treatment of idiopathic hypersomnia. Idiopathic hypersomnia, or “IH,” is a chronic neurological condition “on a spectrum with narcolepsy” that is similarly characterized by EDS.

In 2020, Avadel submitted a New Drug Application (NDA) to the FDA pursuant to section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 355(b)(2), seeking approval of its own product, Lumryz.

As the court explained,

An NDA filed under that section is commonly referred to as a “paper NDA,” which, unlike an Abbreviated New Drug Application (“ANDA”), requires the applicant to submit safety and efficacy data. See AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1045–46 (Fed. Cir. 2010). But such data need not have been developed by the applicant; rather, the applicant may rely on existing FDA findings of safety and efficacy for already-approved drugs, or on other studies not performed by the applicant.

Three months after Avadel submitted its NDA, Jazz filed a patent application entitled “GHB [(i.e., oxybate)] Formulation and Method for its Manufacture,” which issued on October 19, 2021, as U.S. Patent 11,147,782.

The relevant claim recites:

14. A unit dose comprising a formulation of gamma-hydroxybutyrate,

wherein the formulation comprises:

a plurality of immediate release particles comprising gamma-hydroxybutyrate;

a plurality of modified release particles comprising gamma-hydroxybutyrate;

a viscosity enhancing agent; and

an acid;

wherein the viscosity enhancing agent and the acid are separate from the immediate release particles and the modified release particles.

24. The unit dose of claim 14, wherein the unit dose is a sachet.

Avadel appealed from the decision permanently enjoining it from seeking approval from the U.S. Food and Drug Administration (FDA) for Lumryz.

The injunction prohibited Avadel from:

1. offering open-label extensions to clinical trial participants,
2. applying for FDA approval of Lumryz for idiopathic hypersomnia, and
3. initiating new clinical trials or studies after the Permanent Injunction Order’s effective date.

In 2021, about a month after the ’782 patent issued and eleven months after Avadel submitted its paper NDA, Jazz filed a complaint alleging that Avadel’s FDA submission “constitute[d] infringement [of the ’782 patent] under 35 U.S.C. § 271(e)(2)(A).”

That statute provides:

It shall be an act of infringement to submit an application . . . described in section 505(b)(2) of [the FDCA] for a drug claimed in a patent . . . if the purpose of such submission is to obtain approval under [the FDCA] to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent . . . before the expiration of such patent.

Jazz sought a permanent injunction under 35 U.S.C. § 271(e)(4)(B), and damages for Avadel’s alleged infringement, “other than those acts expressly exempted by 35 U.S.C. § 271(e)(1).”

The statute expressly excludes from infringement any infringing activities done “solely for uses reasonably related to the development and submission of information.”

The federal circuit noted that the ‘lawsuit appeared to fall within the bounds of the Hatch-Waxman Act insofar as the alleged infringement “ar[ose] from Avadel’s filing of a New Drug Application.”’

I.e., “Jazz’s claims were based on an artificial act of infringement under § 271(e)(2), and not on any actual acts of infringement under § 271(a)–(c).”

However, in May 2023, the FDA approved Avadel’s NDA, and in June of that year, the company launched Lumryz.

Before trial, the parties stipulated that Lumryz would infringe claim 24 of the ’782 patent if that claim was not found to be invalid. After a five-day trial, a jury found that Avadel had failed to prove the invalidity of that claim and awarded Jazz a reasonable royalty of $233,562.83 for Avadel’s past infringement.

On appeal, the federal circuit agreed with Avadel that the lower court’s injunction improperly blocked protected pre-approval activities:

The plain language and purposes of the Hatch-Waxman Act make it clear that enjoining Avadel from initiating new clinical trials for Lumryz (for IH or otherwise) until expiration of the ’782 patent is unlawful and, therefore, an abuse of discretion. That activity is statutorily non-infringing under § 271(e)(1) and statutorily precluded from being enjoined under § 271(e)(3). As the Supreme Court has explained, it is “apparent from the statutory text” that § 271(e)(1) “exempt[s] from infringement . . . all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA . . . necessarily includ[ing] preclinical studies of patented compounds that are appropriate for submission to the FDA.”

The court thus found the injunction overbroad as a matter of law.