Federal Circuit Limits Research Injunction in Patent Dispute

Pramod Chintalapoodi of the Chip Law Group reports that the Federal Circuit partially reversed and vacated a district court injunction in a patent dispute, which prevented Avadel CNS Pharmaceuticals from conducting clinical studies and seeking FDA approval for the expanded use of its narcolepsy drug, Lumryz.

The appellate court concluded that the injunction issued in Jazz Pharmaceuticals, Inc. v. Avadel Pharmaceuticals, LLC, improperly restricted activities protected under the Hatch-Waxman Act’s “safe harbor” provision, which shields certain pre-approval research and regulatory submissions from patent infringement liability.

The dispute arose after Avadel submitted a New Drug Application under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, seeking approval for Lumryz, a once-nightly formulation of sodium oxybate.

Jazz Pharmaceuticals, which markets Xyrem® and Xywav® for narcolepsy and idiopathic hypersomnia, obtained a US Patent covering a specific oxybate formulation shortly after Avadel’s NDA submission.

Jazz alleged that Avadel’s research and regulatory submission infringed the patent under 35 U.S.C. § 271(e)(2)(A) and obtained a permanent injunction barring Avadel from offering open-label extensions, applying for FDA approval for IH, and initiating new trials.

The injunction followed a jury verdict awarding Jazz a reasonable royalty for past infringement.

On appeal, the Federal Circuit determined that the district court had overstepped its authority by enjoining activities that fall within § 271(e)(1)’s statutory exemption.

The court explained that pre-approval research and regulatory submissions are inherently non-infringing when reasonably related to the development of information under the FDCA. Enjoining such activity would conflict with the statutory framework and objectives of the Hatch-Waxman Act.

For IP lawyers, the decision clarifies the scope of permissible pre-approval activity in the context of patent disputes. It ensures that courts are required to carefully consider statutory exemptions when crafting injunctions.

Companies engaged in drug development may continue pre-approval studies and regulatory submissions even when patent litigation is ongoing.