Jazz Pharms., Inc. v. Avadel CNS Pharms.

Case Name: Jazz Pharms., Inc. v. Avadel CNS Pharms., No. 2023-1186, 2023 WL 2198640 (Fed. Cir. Feb. 24, 2023) (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); U.S. Patent No. 8,731,963 (“the ’963 patent”)

Nature of the Case and Issue(s) Presented: FDA approved Xyrem for the treatment of cataplexy and excessive daytime sleepiness. The active ingredient in Xyrem is sodium oxybate, a form of gamma-hydroxybutyrate, which is subject to abuse. For this reason, Xyrem is subject to a Risk Evaluation and Mitigation Strategies (“REMS”) protocol. Jazz’s ’963 patent, which was Orange-Book listed, claims a computer-implemented system to address certain FDA-required REMS conditions for using Xyrem. Jazz listed the ’963 patent on the basis that it claims a method of using Xyrem. In response to Jazz’s infringement allegations, Avadel counterclaimed, seeking an order requiring Jazz to delist the ’963 patent for failure to claim a drug or method of use. The district court found that, as a matter of claim construction, the ’963 patent claimed a system—not a method of use—and ordered Jazz to delist the ’963 patent from the Orange Book. The Jazz appealed that decision and the Federal Circuit affirmed.

Why Avadel Prevailed: The Federal Circuit first addressed whether the district court erred in its determination that the ’963 patent was not a method-of-use patent. Jazz argued that the ’963 patent recited elements of a REMS-based protocol that ensure that Xyrem can be safely prescribed by doctors and safely used by patients, meaning that although the patent claims a “system,” it is essentially a method claim. But the Federal Circuit found that each independent claim recited “an assemblage of components” defining a system and that Jazz cited nothing in the intrinsic record to support a conclusion that the ’963 patent claims a method of use.

Jazz next argued that 21 C.F.R. § 314.53—which describes Orange-Book listing patents that “claim conditions of use”—provides a broader definition of “method” than is permitted under patent law and that this broader definition encompasses the claims of the ’963 patent. The Federal Circuit disagreed with Jazz and concluded that § 314.53 did not broaden the term “method” in such a way that reciting a condition of use could turn a system patent into a listable method-of-use patent. In so concluding, the Federal Circuit rejected Jazz’s assertion that Chevron deference should apply, explaining that even if the regulation was ambiguous—it was not—FDA has not definitively answered the question of whether REMS patents should be listed in the Orange Book.

Jazz finally argued that 21 U.S.C. § 355(c)(3)(D)(ii)(I) did not provide Avadel a remedy to delist the ’963 patent. In particular, Jazz argued that in 2014, when it listed the ’963 patent, the relevant regulatory framework neither required nor forbid listing of the patent. The Federal Circuit disagreed with Jazz’s framing of the question and concluded that the delisting statute did not require the court to consider whether Jazz violated the law by listing the patent, but instead only needed to answer whether Avadel could request an order delisting the patent. The Federal Circuit concluded that such a remedy was available to Avadel.