Procedural History

Jazz Pharms., Inc., v. Avadel CNS Pharms., LLC, Case No. 2023-1186 (Fed. Cir. February 24, 2023) is an appeal by Jazz Pharmaceuticals, Inc. (Jazz) from a District of Delaware order granting a motion for an injunction brought by Avadel CNS Pharmaceuticals, Inc. (Avadel). The injunction directed Jazz to ask the FDA to delist U.S. Patent No. 8,731,963 (the ’963 Patent) from the Orange Book. The Federal Circuit affirmed.

Facts

Jazz markets the narcolepsy drug XYREM® with the active ingredient sodium gamma-hydroxybutyrate (GHB), which is subject to Risk Evaluation and Mitigation Strategies (REMS) protocols due to misuse of the drug. XYREM® has heavily sedating effects and is dosed twice nightly. XYREM®’s REMS program originally restricted distribution of the drug to a single-pharmacy system. The ’963 Patent relates to Jazz’s single-pharmacy distribution system, which controls access to abuse-prone prescription drugs through a computer tracking system implemented by pharmacies. In 2014, Jazz listed the ’963 Patent in the Orange Book as covering a method of using XYREM® pursuant to 21 U.S.C. § 355(b)(1)(A)(viii).

In December 2020, Avadel submitted an NDA for GHB-based drug FT218 pursuant to 21 U.S.C. § 355(b)(2) with a proposed REMS. Avadel’s proposed product uses multiple pharmacies and databases to ensure proper drug handling and avoid misuse or diversion, and is dosed once nightly. The FDA required Avadel to submit a certification regarding the ’963 Patent as part of its 505(b)(2) application, and Jazz subsequently sued Avadel for infringement in response to Avadel’s Paragraph IV certification. Avadel then responded to Jazz’s infringement claim with a counterclaim seeking to delist the ’963 patent for failing to claim a drug or method of use. The district court ultimately found that, as a matter of claim construction, the ’963 patent claims a system and thus does not claim an approved method of use. Avadel sought an injunction, and in its decision, the district court ordered Jazz to ask the FDA to delist the ’963 Patent.

Holding

First, the Court addressed whether the district court erred in determining that the ’963 Patent claims recite systems and not methods, finding that the word “system” as it appeared in the patent was synonymous with “method.” The Court found that the terms were properly construed as they recite “an assemblage of components” rather than the performance of steps, and held “[t]hat the claimed systems can be used in the course of treating patients suffering from narcolepsy does not alter the fact that these are system claims.” (Slip Op. at 10-11.)

Next, the Court addressed whether the claimed system was “an approved method of using a drug” and is thus required to be listed in the Orange Book under 21 U.S.C. § 355(c)(2) and § 355(c)(3)(D)(ii)(I). The Court rejected Jazz’s argument that FDA regulations had broadened the definition of “method,” which Jazz argued should have allowed the system claims to ultimately be listed as method-of-use claims, and held that the company “misread the regulations describing method-of-use patents.” (Slip Op. at 11.) Thus, the Court found that the claimed system was not “an approved method of using a drug” under the statute.

Finally, the Court addressed Jazz’s argument that U.S.C. § 355(c)(3)(D)(ii)(I) is not available to provide Avadel with a delisting remedy for the ’963 patent. The Court found that “the delisting statute does not require us to consider whether the patent holder violated the law by listing the patent in the first instance. It simply provides that those accused of infringing a listed patent may request an order requiring the patent holder to correct or delete listings for patents that do not claim the drug or a method of using the drug.” (Slip Op. at 14.) As such, the Court upheld the district court’s judgment ordering Jazz to seek delisting of the ’963 patent from the Orange Book.

Key Takeaways

1. The Federal Circuit generally construes method claims as those that require the performance of steps, and system or apparatus claims as those that describe physical components of a whole.
2. Patentees whose products include computer assisted uses or means of distribution should consider seeking claims that cover both methods of use and systems, and continue to comply with the listing requirements for patents with method claims.
3. Patentees should assess whether patents encompassing REMS programs or systems are properly listed in the Orange Book under 21 U.S.C. § 355(b).